The city of Acworth, Ga.-a community of 11,000 residents 20 miles north of Atlanta-is putting the final touches on a $10 million overbuild of AT & T Broadband's local system.
The city expects to offer cable and high-speed Internet access to AT & T Broadband customers later this fall, and could compete with BellSouth Corp. in the local-exchange market in the future.
The actual cost of the Acworth network, however, remains in doubt. The city places it at $10 million, but cable-industry executives insist that the price tag is closer to $12 million.
The City Council began looking at the project three years ago as a means of introducing high-speed Internet access to the community-a service that still hasn't been launched in Acworth despite an ongoing AT & T Broadband upgrade.
"That's what got us looking at this technology," city manager Brian Bulthuis said. "As we looked at the issue, we decided that it would be beneficial to also offer cable service, as well."
Bulthuis said most of the plant has been built, and the first customer should come online within weeks.
"You always have some negative thinkers, but overall, we've got a lot of people here who are anxious for us to start offering this service," he added.
Meanwhile, cable-industry officials called Acworth "a prime example of why cities should not compete with private companies."
Nancy Horne, head of the Cable Television Association of Georgia, said city officials originally sold the project to residents based on a price tag of $6.7 million, only to come back later and announce that an additional $5.4 million was needed.
If the venture fails, municipal electric ratepayers would be paying for the network for the next 30 years, she added.
"It's a clear signal of how some of these cities don't have the expertise to get involved in speculative ventures, of which cable is only one of many," Horne said.
The city's chances of success were dealt another setback when the network manager resigned to accept another position, she added.
"What you're looking at is a $12 million boondoggle, with no one with the expertise needed to run it for them," Horne said.
Bulthuis, though, speculated that the city's move into telecommunications has spurred AT & T Broadband to speed up its upgrade of its Acworth network. Not surprisingly, he also dismissed the industry's argument that no municipal overbuild has ever paid for itself.
"I assume they are making money," he said, referring to AT & T Broadband. "And remember, communities originally got into the power business because it was a service that at the time was not being provided."