Investment in Hamilton County / Chattanooga Internet Infrastructure Brings Benefits Of Over $2 Billion

Published January 25, 2021 

Chattanooga, TN – Independent research finds that during the first ten years since EPB built America’s first Gig-speed network, the Chattanooga community has benefited to the tune of 2.69 Billion Dollars. 

The new study was conducted by Bento Lobo, Ph.D., head of the Department of Finance and Economics at the Rollins College of Business at the University of Tennessee at Chattanooga. 

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The study computed the economic value of the fiber optic infrastructure in Hamilton County and the city of Chattanooga over a roughly ten-year period from 2011 to March 2020.   

Lobo stated that, “The true economic value of the fiber optic infrastructure for EPB’s customers is much greater than the cost of installing and maintaining the infrastructure.” 

The installation of the fiber optic network cost $396.1 Million but the value now is estimated to be at a minimum $2.69 Billion.  The estimated value exceeds the costs of the project by over $2.20 Billion.   

Each county resident is estimated to have benefited by about $646 per year due to the incremental value generated by the fiber optic infrastructure.  

According to EPB, the network was used to establish the nation’s most advanced smart grid power distribution system. 

Related to the smart grid’s ability to quickly re-route power around storm damage and other problems, the study documents a 40-55% annual decrease in outage minutes providing EPB customers with an average of $26.6 million in savings each year by helping them avoid spoilage, lost productivity, and other negative impacts. 

David Wade, EPB President and Ceo stated, “Chattanooga’s smart city infrastructure was designed as a platform to give our customers the power to do more.  From education and innovation to job creation, it’s amazing to see how our customers are realizing possibilities we could only imagine ten years ago.” 

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Lobo said,“Our latest research findings show that Chattanooga’s fiber optic network provides additional value because it provides high speeds, with symmetrical uploads and downloads, and a high degree of network responsiveness which are necessary for the smart grid and other cutting-edge business, educational and research applications.”  

During the era of COVID shutdowns, the fast internet speeds have become especially important with an increased spike in the number of Hamilton County residents working from home. 

In 2018, a relatively high percentage of Hamilton County residents worked from home at 7.14% but with Stay-at-Home Orders, Hamilton County number of remote workers has jumped exponentially.   

Nationwide, due to the restructuring required to stay afloat during the Pandemic, many businesses have found they can keep their operating costs down by keeping as many workers at home as possible, so the trend toward more remote work will likely only increase as time goes on, even after the virus has been mitigated.   

According to the study, the fiber optic infrastructure directly supported the creation and retention of 9,516 jobs which is about 40% of all jobs created in Hamilton County during the study period. 

The fiber optic network has also helped keep the local unemployment rate from rising even higher than it is due to the fiber optics helping many businesses transition their employees to remote work very quickly.  

According to the latest available numbers from the U.S. Bureau of Labor Statistics, Hamilton County’s unemployment rate was 4.7% in November which is significantly lower than Tennessee’s rate (5.3%) and two percentage points lower than the U.S. unemployment rate (6.7%) for the same period. 

With HCS EdConnect, a fiber optic broadband internet service provided free of charge to economically challenged families with K-12 students, more than 12,000 students currently have internet access to continue their studies from home. 

It is assumed that without the high-speed network, these 12,000 students would have been without the capability of accessing remote-learning during school shutdowns. 

The program aims to offer the service to 28,500 students in Hamilton County out of the roughly 45,000 in the district. 

With increased internet usage brought about by the pandemic, many estimated that networks would be overwhelmed.  As a result, YouTube and other video providers reduced the resolution of their contents in some markets. 

However, in Hamilton County the fiber optic network’s speeds reportedly has not slowed due to the increased remote work, online education and telehealth. 

Many companies and schools have outsourced traffic that once flowed across their internal networks to Chattanooga’s community-wide internet. 

In comparing a typical pre-COVID day (March 4, 2020) to a typical COVID day (December 14, 2020), EPB has seen a 75% increase in the total volume of Internet Bandwidth Usage over the course of the day.  

As a result of Hamilton Counties investment in internet infrastructure, Chattanooga gained Zillow’s recent designation as the Number One Metro for Remote Work. 

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