:Chattanooga; :Jan 28, 2009; :Front Page; :1

Lawsuit aims to block EPB cable expansion

By Monica Mercer mmercer@timesfreepress.com SEE CORRECTION BELOW

Online: Hear John Cavett talk about the lawsuit. Read the complaint against the city of Chattanooga, EPB and EPB Telecom. Comment.

    A class-action lawsuit filed Tuesday against the city of Chattanooga, EPB and EPB Telecom says the power company has been installing infrastructure for its new cable business without acquiring proper permission from Hamilton County residents.

    The civil action by residents is the first from EPB electric ratepayers to challenge how the city-owned utility is assessing most of the costs of the $219 million fiber-to-home initiative.

    All EPB customers are potentially affected by the lawsuit, attorney John Cavett said, and possibly could be entitled to compensation from EPB for improper use of their land.

    Chattanooga and EPB already own easements — essentially rights of way to use other people’s property for a specific purpose — throughout the county and surrounding areas in order to transmit electricity to their customers.

    The lawsuit claims, however, that the city, EPB and its offshoot cable company, EPB Telecom, have begun using those easements to install cable. Such actions are illegal, Mr. Cavett asserted, citing case law from other jurisdictions.

    A 2005 Tennessee Court of Appeals decision, for example, noted that “an easement’s use may change over time to accommodate technological
development, but such changes must fall within the purposes for which the easement was created.”

    In a statement e-mailed to the Times Free Press, EPB Senior Vice President of Finance Greg Eaves defended EPB’s actions and said that the placement of “a fiber-optic Smart Grid” is meant only to “modernize” the company’s electric system.

    “By adding some additional electronics, we can provide superior high speed Internet, video and phone to customers who choose to purchase them,” Mr. Eaves said.

    The lawsuit, filed in Hamilton County Circuit Court, points to a 10-mile strip of land along Browntown Road in Soddy-Daisy, where EPB’s cables already run through the property of at least 75 owners who’ve agreed only to electricity easements.

    Lead plaintiff David Mathews, of 6044 Browntown Road, lives along “one of many cable lines in Hamilton and adjacent counties,” the lawsuit states.

    The issue of whether electric ratepayers are illegally paying for EPB’s cable venture has been argued for two years in courts in Chattanooga and Nashville.

    The Tennessee Cable TV Association sued EPB in Davidson County Chancery Court in 2007, claiming EPB was illegally developing its EPB Telecom plan using electricity revenues. The lawsuit was judged to have been filed in the wrong jurisdiction, but the cable industry has appealed to the Tennessee Court of Appeals.

    Last year, Comcast Corp., which operates the primary cable TV service in Chattanooga, filed a lawsuit in Hamilton County, claiming that EPB’s capital expenses from launching the telecommunications venture should not be funded by electric revenues.

    A Hamilton County judge threw out the lawsuit last July. CORRECTION: The headline in this story about EPB inaccurately stated the purpose of a class-action lawsuit against the city of Chattanooga, EPB and EPB Telecom. The lawsuit does not seek to block EPB cable expansion. It seeks compensation for property owners who claim the utility improperly used their land without permission to lay cable infrastructure.

John Cavett