Some Facts about Jackson Energy Authority’s New Telecommunications Project

An Exciting New Opportunity to Better Serve Our Customers
Jackson Energy Authority customers have repeatedly told us through the years that they would like JEA to get into new telecommunications ventures, like cable television, because they have come to know, trust and depend on JEA for superior customer service and reasonable prices on a variety of utilities.

JEA is preparing to build a new fiber optic telecommunications network to provide every home and every business in Jackson with end-to-end fiber connectivity. That will mean greater competition and better service on cable television, Internet access, and local and long distance telephone services for JEA customers. And since Jackson will be one of the first cities in the country with this technology, it gives us an advantage in our efforts to recruit new businesses and better-paying jobs to our community.

Building a New Telecommunications Infrastructure
Over the next ten years, JEA plans to spend approximately $60 million to construct and complete this new, cutting-edge telecommunications network for Jackson. This investment will be funded by JEA revenue bonds and repaid only by its new telecommunications customers, not the general taxpayers. JEA will build and operate the network and directly provide cable television service. JEA will contract with local groups to provide telephone and Internet service, as well as involve local groups to provide community programming.

JEA plans to spend about $36 million for its cable signal processing facility and the network to deliver the cable signals to the community. The cable signal processing facility where the satellite dishes and signal processing equipment will be located will be approximately $4.5 million. The balance of the $60 million, about $19.5 million, will be used to connect customers to the network. Any private users of the network will pay for their own equipment needs.

Demonstrating Community Support
In order for JEA to obtain its own revenue bond financing for this project, the bond underwriters required JEA to demonstrate some tangible form of community support for this project. This was accomplished by the City Council’s recent vote to back JEA revenue bonds with its own taxing authority.

By its 8 to 1 vote, the City Council recognized the significant opportunity for economic development this network offers our community, and acknowledged the community’s widespread desire for competition. In truth, JEA does not need the city’s financial backing, but it does need the tangible show of community support.

An Open and Deliberate Decision
For more than 10 years, JEA has openly expressed its plans to respond to customer desires for local cable competition. The City of Jackson has also asked JEA to look at entry into cable television on several occasions. This opportunity has been the subject of much public discussion and several media reports in the past. In its recent drive to build support for a new telecommunications network, JEA held open regular public board meetings to discuss this venture and conducted a publicized public hearing on February 12, 2002, to present its plan. City Council members have responded to the wishes of their constituents and their own good judgment in confirming the need for this project.

JEA’s telecommunications business plan was carefully developed by staff and consultants with extensive experience in utilities, cable television, data, and telephone operations. Customer growth projections are based on valid, independent research, analysis of the experiences of similar projects in other communities, and the understanding of our customers’ desires over many years. JEA’s business plan was also reviewed and deemed sound by the Comptroller for the State of Tennessee.

Cutting-Edge, But Dependable Technology
JEA very carefully selected a network design that will be “future proof” to technology changes. Our fiber network is simply a signal pathway that has unlimited capacity to handle any future bandwidth demands. It does not contain electronic components that can become obsolete, unlike other local systems that were built with limited bandwidth capability and will require additional capital investment to meet future needs.

The nation’s vast communications infrastructure is clearly being built with fiber optic cable. This is important to businesses and telecommuters who need to transmit heavy data volume to and from their workplace. While alternative wireless technologies are being explored around the nation, that technology is limited in its ability to transmit data at high speeds in both directions. Additionally, wireless technology is not as secure as dedicated fiber connectivity. Businesses will not want to transmit sensitive information over the air and risk competitive interception.

Proven Success in Other Markets
Nearly 450 public power systems like JEA are successfully providing some form of broadband services to their communities. Those offering cable television enjoy average market penetration in excess of 50%. The public has enthusiastically embraced local power systems providing competitive services.