Broadband

Phoenix Center Skewers Chattanooga Mayor's Claims for Muni Broadband

Chief economist George Ford calls unemployment drop citation 'bogus' 8/18/2016 11:40 AM Eastern
Chattanooga, Tenn.

Phoenix Center chief economist George Ford has taken issue with a story in The Tennessean newspaper in which Chattanooga, Tenn., Mayor Andy Berke touted the economic benefits of its municipal fiber network.

 

A federal appeals court recently rejected the FCC's preemption of a Tennessee state law limiting the expansion of that city network, but the story preceded that decision and made no mention of it.

 

Related: FCC Releases Muni Pre-emption Order

 

The story noted that, over the past three years, "the city’s unemployment rate has dropped to 4.1% from 7.8%, and the wage rate has also been climbing," citing a speech by Berke to the Fiber to the Home Council Americas conference in June.

 

Berke is quoted in the story as saying the wage rate in Chattanooga is definitely linked to Internet-related jobs and the tech sector.

 

“Our fiber goes to each and every home,” the story quoted Berke as saying. “We can’t have digital gated communities. If we do that, and only allow fiber to go to some parts of the city, some parts of the state, we will see technology widen the gulf between people as opposed to bridging it."

 

But Ford, responding to the story via an op ed in The Tennessean, took issue with what he said was Berke's lead claim that "the city’s unemployment rate has dropped to 4.1% from 7.8%."

 

Ford pointed out that over the same period the nationwide unemployment rate had fallen from 7.5% to 4.7%, saying, "In terms of unemployment, Chattanooga isn’t much different than the nation as a whole.

 

"Unless the Chattanooga system is having nationwide economic impacts, it’s pretty clear that attributing the unemployment decline to a city broadband network is bogus," Ford said.

 

He said that looking at statewide unemployment rates, tying the rate drop to the muni broadband net is even more problematic.

 

"For those cities operating broadband networks, unemployment has fallen by an average of 4.0 points," he said, while "in cities without municipal systems, unemployment has fallen by 4.7 points."

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