EPB vs Comcast

It was in the news last week that there is a court suit being filed in Chattanooga, Tennessee by the Comcast Cable Corporation that claims an unfair advantage is being exploited by a local power company, Electric Power Board or EPB, as it is transitioning to the communications sector. EPB plans to lay fiber-optic cable lines making access to the high speed internet easier for everyone in the area in addition to the electric utility services they already provide. They plan to use a loan from their utility division to promote the communications division. Comcast feels that this low-cost loan will provide an unfair commercial advantage which will violate Tennessee state law.

Local concerns focus on the possibility that a failed project on the part of EPB could cause rates to rise in the future to cover possible losses. Comcast is already well established and provides decent service to its customers, but many feel that arbitrary rate hikes make a new provider with faster service desirable.

Does Comcast have a legitimate case or is this using the law, rather than the spirit of the law, to serve its own financial advantage? Certainly there are legitimate concerns about the welfare of the community if the EPB communications division does not have a realistic picture of the kind of investment and operating expenses necessary to run a large scale operation. If Comcast is acting benevolently to protect the fledgling company from overextending itself, than perhaps the act can be considered moral in its kind intention. But if this is an attempt to use the law to choke out a competitor for strictly financial gain, then the issue must be reexamined with a different lens. Out-competing is a fine way to do business, but if your services are not sufficient and new services are requested, it seems immoral to look for legal roadblocks to do the dirty work of stopping a new competitor from entering the market.

Is it right for EPB to exploit the opportunity for a low-rate loan within a public utility company if it is in apparent violation of the Tennessee Cable Act? The goal is to provide the citizens of Chattanooga with better opportunities and lower service rates, but if the program fails there could be more damage done than good. The utilitarian ideal of desiring the greatest good seems moral, but what if EPB is only concerned with its own profit margin and not with the potential pitfalls of a failed project. If the communications wing flounders, they can still make their revenue by increasing electricity rates. Without more details it is hard to see who has the moral high ground, but we can see that once again, the media and communications industries are very difficult to control with the letter of the law.