Frequently Asked Questions

1. Why did Glasgow elect to construct a municipally-owned broadband network?

2. Please describe the principal activities of your project.

3. How is Glasgow's project different from "load management systems" implemented by other electric utilities?

4. What are the most important goals or objectives of Glasgow's project?

5. What did it cost?

6. When and how was the project originally conceived?

7. What were the key project milestones - how has the project evolved over time?

8. What have been and/or continue to be the most significant obstacles the project has encountered?

9. Does the Cable Act of 1992 protect other cities who might want to do a similar project?

10. What other individuals, organizations or businesses have been most significant in a) project development and b) on-going implementation and operation?

11. Who are the strongest supporters of the project?

12. Who are the strongest critics of the project? What is the nature of their criticism?

13. Should government operate a service like this? Is this not an example of government interfering with the "free enterprise system"?

14. What have the financial results of the project been like?

15. What would you describe as the project's most important achievements to date?

16. What would you characterize as the project's most significant remaining shortcoming?

17. Aren't you afraid the phone companies will come in and compete with you?

18. Aren't you afraid wireless technology will render your system obsolete?

19. Has the project received any awards or other honors?

20. How do you believe the principal problems addressed by the project will evolve over the next five years and how are you going to respond?

21. Can we do this in my city?

22. How can I learn more about this project?

1. Why did Glasgow elect to construct a municipally-owned broadband network?

In a word the answer to that question is "competition". The people of Glasgow feared competition in the coming unregulated environment for their municipally-owned electric utility and they desired competition in the cable television marketplace and the telephone marketplace. They also wished to establish a city-wide, high speed computer network which was not available from either the telephone company or the cable television company.

By creating a constant flow of information among the utilities, businesses, schools and homes within the City of Glasgow, the Glasgow Electric Plant Board will be able to completely change the way they will be able to provide energy to the people of Glasgow and offer abundant choices to consumers in the way they purchase that electric power. That same flow of information has created competition in the cable television marketplace and telephone marketplace. It has also allowed the creation of many new ways for the citizens of Glasgow to communicate with each other, with their customers, and with their government, which will ultimately improve their way of life.

The reasons for a community such as Glasgow to consider a municipally-owned "information superhighway" or broadband network are not born of new technology. Instead, they are based in a continuum which stretches back to the earliest days of colonizing and developing this country. The same reasons that have driven municipalities to operate water purification and distribution systems, sewerage systems, police and fire departments, electric power systems, natural gas systems, and other services, will hold true for the coming communications systems. Glasgow's broadband network is expected to be the economic engine that will power Glasgow and thousands of other communities into economic prosperity during the coming information age.

2. Please describe the principal activities of your project.

The two elements that provided the economic justification for the project were electric energy management and competitive cable television. Today the project allows energy management through this city of 14,000 people in the same fashion that energy management activities are carried out in an individual office complex or industrial facility. The other core activity is the provision of a competitive cable television service. Through the same wire that our load management signals flow, everyone in Glasgow can elect to receive an alternative cable television service to that which is provided from a private cable operator. The cable television service also enhances the effectiveness of the energy management function, since commercial availability times on major networks can be utilized to pass load management information to consumers. In an emergency, the programming can be interrupted to appeal for power usage reductions in order for the entire community to save money on its power bill.

Since the early provision of those two functions, many other capabilities of our broadband network have been discovered. For instance, we now use the same system to offer other functions such as traffic signal synchronization, high speed fiber connectivity and VPN's for local businesses, and soon, municipally operated telephone service in direct competition with Verizon.

Possibly most significantly, we offer a 4-megabit per second city-wide computer network which ties together all homes, schools, businesses and government agencies. The network is a city-wide Internet Protocol (IP) network which connects stand-alone PC's and file servers with their associated workstations in any home or business throughout the city. The network is also connected to T-1 circuits, provided by AT&T, which allow anyone on our Glasgow network to have T-1 speed access to the Internet simply by clicking on the browser icon to establish the connection, without any connection to a telephone or a telephone modem. We even utilize the system to synchronize all the traffic signals in town so our existing streets can carry the optimum amount of traffic thus achieving much higher efficiency in the investments the city has made in streets, roads and highways.

3. How is Glasgow's project different from "load management systems" implemented by other electric utilities?

To answer the question, I will concentrate solely on the "anchor tenants" of our "communications shopping mall." Municipally owned electric utilities across the country have struggled to implement effective load management programs. Generally, the programs in place reward consumers for allowing the municipal utility to control loads such as electric water heaters, air conditioners, heat pumps, swimming pool pumps, etc., with a $3-$5 per month credit on the customer's electric bill. A lack of consumer understanding of the need for the program and the lack of interest in a $3 or $5 per month savings have rendered these programs less than overwhelmingly successful. This program's initiative provides the foundation for a realtime exchange of data between municipal utility and electric consumer that will facilitate real changes in power consumption. The mediums of cable television and IP networking will allow continuous information to flow to the consumers explaining how this program can help them lower their energy bills. It also gives the utility new incentive tools. Instead of offering that $3-$5 per month credit on the electric bill, our project allows us to offer a premium cable television service such as HBO, Showtime, etc., which has a similar cost to the utility, but a much higher perceived value to the consumer. In short, a consumer may not be interested in allowing his hot water heater to be controlled for $3-$5 a month, but he may very well be interested in allowing the same control in return for the reception of HBO.

4. What are the most important goals or objectives of Glasgow's project?

• Enable the citizens of Glasgow to go on an "energy diet" and thus keep money in local circulation to drive the retail economy, instead of removing money from the local economy to pay electric power costs;
• Provide the citizens of Glasgow with modern, sophisticated cable television service which is controlled locally and operated on a not-for-profit basis;
• Provide the people of Glasgow with high speed Internet access and businesses with high speed LAN/WAN/VPN connections via the latest broadband and fiber optic networking technology at cost based rates;
• Provide an alternate telephone service with low cost access to long distance lines for business and industry in Glasgow;
• Facilitate new economic growth by enabling commerce to take place through the movement of information instead of the movement of automobiles;
• Reinvent our municipal electric utility in the form of a "technology utility."

5. What did it cost?

The initial construction of the broadband network cost approximately $2.4 million. We constructed 120 miles of broadband plant of a cost of approximately $20,000 per mile.

Adding a cable television service to the project required an additional expenditure of approximately $1.3 million. This expenditure was used to build a cable TV headend, the antenna towers and earth stations and to purchase cable television computers, converters and other hardware and software related solely to the provision of cable television.

Our community-wide computer network required the purchase T-1 circuits, file servers, switches and routers at a total cost of about $400,000. To receive the service, customers must purchase a card (Ethernet adapter card) to go in an expansion slot on either a home PC or a file server which is to be interfaced with the network. In turn, this card connects to a "cable modem," which we rent to the customer for $9.95 per month.

6. When and how was the project originally conceived?

The City of Glasgow purchases all of its electricity from the Tennessee Valley Authority. Since the early 1980's, TVA rates have been sending an increasingly strong signal through increases in wholesale electric power costs that cities should devise a system to shift the use of electricity off certain peak times of the month. Such a system would allow cities to save 10's or possibly 100's of thousands of dollars per month in their wholesale power cost. Our project is founded in this electric rate environment. By mid-1985, staff at the Glasgow Electric Plant Board were involved in detailed study of different methods that could be employed to accomplish this desired load management objective.

In the midst of the study of different communications and load management possibilities, a significant event occurred. One day in early 1986, the City Attorney, Jeff Herbert, called Electric Plant Board Superintendent, William J. Ray. The City Attorney, while studying his most recent cable television bill, asked Superintendent Ray how much the average residential electric bill was in the City of Glasgow. Ray responded that it was approximately $40 per month. Mr. Herbert went on to testify that "my most recent cable television bill is $38!" That conversation turned out to be a pivotal event.

From that conversation, Electric Plant Board staff decided to compare the complexity and the cost of an electric distribution system to produce an average bill of $40 to the complexity in cost of a video distribution system that accomplished a similar monthly bill. The two just did not add up. From that point, the Electric Plant Board staff and Superintendent Ray began to develop plans for a project that would integrate the need for communications to improve the way electric power was distributed and consumed in the City of Glasgow, and to provide competition in the cable television marketplace which obviously was sorely needed.

Studies were done by outside consultants all with the same conclusion. A system could be constructed with off-the-shelf technology that could not only provide load management and remote meter reading capabilities combined with cable television entertainment signals on the same wire, but also could provide capacity for many new services that could be based on community-wide data communications.

Although William Ray and his 34 member staff at the Glasgow Electric Plant Board were certainly important in the development of the project, the list of primary initiators would have to include William H. Bryant, Chairman, Robert A. Lessenberry, Don R. Doty, Norma B. Redford and Jack T. Goodman (Members of the Glasgow Electric Plant Board), who were willing to shed the normal prerequisite conservatism that is by far and away the norm for municipal electric utility Boards, and approve a project that involves considerable risk. The same statement applies for the 12 members of the Glasgow Common Council in 1988, and the Mayor, Charles B. Honeycutt.

7. What were the key project milestones - how has the project evolved over time?

• Southern Electric International hired to do a study of municipally-owned cable television, October 1986;
• Electrotek Concepts hired to study how cable television and the electric system distribution automation signals would coexist on same wire, May 1987;
• EPB resolves to go forward with Broadband Information Highway Project, EPB also asks City Council to accept bids on a second cable television franchise in order to incorporate cable television into Broadband Information Highway Project, December 1987;
• EPB establishes Programming Committee after award of cable franchise to EPB by the City of Glasgow, March 1988;
• Construction of Broadband Information Highway Project begins and first lawsuit filed by TeleScripps attempting to stop construction, November 1988;
• First cable television customer receives programming through Broadband Information Highway Project, May 1989;
• Second lawsuit filed by TeleScripps in State Court questioning Broadband Information Highway Project use of en situ wiring, August 1989;
• Construction of Broadband Information Highway Project substantially complete, June 1990;
• Telephony trial begins on Broadband Information Highway Project, October 1990;
• Barren Circuit Court trial held on second TeleScripps lawsuit - jury ruled that cable wiring inside a home is property of homeowner, August 1991;
• GIS Consortium formed uniting local governments and utilities to implement GIS (Geographic Information System) system through Broadband Information Highway Project, January 1992;
• Settlement agreement reached between TeleScripps and EPB ending all litigation, March 1992;
• Community-wide data communications project initiated on Broadband Information Highway Project and partnership formed between EPB and Glasgow Independent Schools to utilize Broadband Information Highway Project in "distance learning" applications, August 1992;
• Schools began authorizing home users to tie into school computer network, October 1993;
• State approves trial of traffic signal synchronization through Glasgow's Broadband Information Highway Project, November 1993;
• Partnership with InternetMCI providing high speed access to the Internet, April, 1995.

8. What have been and/or continue to be the most significant obstacles the project has encountered?

There have been, and continue to be, several small problems with the project, including the cross-training required for EPB staff in implementing new services after a 30 year history of providing only one service, inventing our own ways to do data communications across the cable since most data communication manufacturer representatives prove to be little or no help in our quest to combine cable television and data communication on one medium. But the largest obstacle by far we have faced has been the greed of the cable television operators. Our local incumbent cable operator, in concert with other cable operators nationwide, declared war on this project from the first time it was mentioned in 1987. The weapons they brought to bear included litigation and a willingness to spend any amount of money necessary to make Glasgow's project unsuccessful so they could use it as an example for the many other communities that might be interested in replicating the project. When nationwide cable rates for basic service averaged around $20, they lowered their rates in Glasgow to $5.95 in order to thwart the new competition from our project. Previously our competitor offered 21 channels of basic service, but then rebuilt their system and now offer 48 channels of basic service. Wherever possible, they entered into exclusive contracts with programmers such as TNT and ESPN in an attempt to make this programming unavailable to the EPB project.

How have we dealt with these obstacles? Well, luck or divine providence has certainly played a part. We have countered their unrealistically low pricing by positioning our cable television product as the Cadillac of cable television versus their Yugo. We priced our product at $13.50 for basic service initially and now, eleven years later charge only $16.95 for expanded basic cable.

The greatest obstacle still facing our project is the same obstacle that has stood in the way of every innovation proposed for the last several centuries, the "illusion of knowledge." Our project offers teachers new ways to teach, businesses new ways to conduct business, governments new ways to govern, and peoples new ways to live. But in each case, they are hampered by what they think they know. Our project has not reached anything like its full potential because the citizens, businesses, and others in Glasgow are still largely unable to visualize the benefits of "moving the message" instead of the person. We are certain that the path of our discoveries will eventually lead the people of Glasgow and many other cities to the knowledge that their certainties about how to teach, govern, do business and live have been false. Progress toward this goal is evident, but much slower than we would like.

9. Does the Cable Act of 1992 protect other cities who might want to do a similar project?

The Cable Television Consumer Protection and Competition Act of 1992 provides near-perfect protection for other cities from the private cable tactics which have been used to prevent competition in the past. Glasgow, Kentucky, Paragould, Arkansas, and other communities' efforts at establishing municipally-owned cable systems have been disrupted by the private cable operators claim to own all of the cable wiring in the buildings in the community. This claim is rendered moot by the 1992 Cable Act. This law directed the Federal Communications Commission to promulgate regulations governing the disposition of cable wiring within the home. Cable home wiring is defined, in the rules recently issued by the FCC, as that wiring located within the premises or dwelling unit of the subscriber that has been installed by the cable operator or its contractor.

This ruling prescribes that cable operators may not remove cable home wiring upon termination of service without giving the subscriber the opportunity to acquire the wiring. When a cable subscriber terminating service (as in transferring to another cable operator) elects to acquire the wiring, the cable operator will be permitted to charge the subscriber for the per foot replacement cost of the wiring. The replacement cost may be based on a reasonable approximation of the length of cabling in the subscriber's premises. If a subscriber refuses an offer to acquire the wiring, the cable operator must remove the wiring within thirty days or make no subsequent attempt to remove it or restrict its use. The cable operator must remove the wiring at no cost to the subscriber and must pay for any damage caused by the removal of the wiring. This law and its required rule-making by the FCC renders an existing cable operator powerless in its attempt to control the inside wiring in an attempt to hinder competition.

At an operational level, the Cable Act of 1992 also eliminates another tactic which has been employed by private cable operators in response to competition. In almost all overbuild situations (either by a municipality or another private operator) the incumbent operator has resorted to "special" rates in areas where the competitor begins construction of the new system. "Special" rates as low as five dollars per month for a forty channel basic programming package are not uncommon. Classically, this "special" rate would not be offered throughout the community but, rather, it would be available only on the streets where the competitive systems construction was complete. This practice obviously has had seriously detrimental effects on the new competitor's chances for success. The new law and the FCC rules resulting from it mandate that a cable operator have a uniform rate structure throughout its franchised service area. This means that the practice mentioned above will now be illegal! The Cable Act of 1992 is designed to encourage cities to build municipal systems like the one contemplated by this study.

Lastly, the Cable Act of 1992 strikes down another tactic used against competitors by private cable operators. Exclusive contracts between cable operators and the providers of cable programming have long been used as a means of protecting an incumbent from a potential competitor. A new cable company (especially a municipally-owned one) often finds that vendors like Turner Networks (purveyors of CNN, TNT, etc.) will not sell their programming to them because the existing operator has executed an "exclusive" contract for distribution of that vendors' programming in a given geographic area. Again, the way for competition has been cleared by the new law. Section 628 of the law represents Congress' response to anti-competitive practices in the video programming marketplace. It is designed to provide a level playing field for all multichannel video programming distributors, to expand the availability to consumers of satellite-delivered cable and broadcast programming, and to boost the development of new video distribution technologies. Such a system will benefit from the law's prohibition against "unfair methods of competition or unfair or deceptive acts or practices, the purpose of which is to hinder significantly or to prevent any multichannel video programming distributor from providing satellite cable programming or satellite broadcast programming to subscribers or consumers."

The Telecommunications Act of 1996 is more problematic. In the last few years the main tactic of the cable and telephone monopolies has been to attack projects like ours by convincing state legislatures to pass laws which remove the rights of local governments to establish projects like ours. This practice was addressed by the 1996 Act, but the FCC has been glacially slow to do their job. The Act directs the FCC to strike down any state or local law which prohibits, or has the effect of prohibiting, the full and open competition for telecommunications services by "any entity." However, in practice they have failed to do so. At this time, the influence of the telephone and cable lobbyists on state legislatures is perhaps the biggest threat to the democratization of broadband networks by local governments.

10. What other individuals, organizations or businesses have been most significant in a) project development and b) on-going implementation and operation?

The American Public Power Association - APPA has proven invaluable in helping our legislators understand the nationwide implications of this project. APPA guided us through testimony to both the FCC and the House Subcommittee on Telecommunications and Finance and still play an active role in lobbying the FCC required by the final rule making phases during the implementation of the Cable Television Consumer Protection and Competition Act of 1992 and litigation relative to the FCC's role in defending local governments rights as prescribed in the Telecommunications Act of 1996. Contact Person - Ron Lunt, Telephone - (202) 467-2990; email: rlunt@appanet.org

The Baller Law Group - Has furnished additional legal counsel in dealing with FCC and NII issues. Contact Person - Jim Baller, Telephone - (202) 833-5300; email: jimb@baller.com

3Com Corporation - Has aided the project through furnishing a DOCCIS standard CMTS (Cable Modem Termination System) which helped us convert from earlier cable modem technologies to the very latest technology.

Philips Broadband - Helped our project in the beginning by seeing the value in Glasgow's project and making the broadband active and passive electronics available to us at a very attractive price. Contact Person - Carl Buesking, Telephone - 1-800-448-5171

Vinton Cerf - Opened our eyes to the possibility of offering high speed Internet service on our broadband network and made sure that MCI supported our early efforts.

11. Who are the strongest supporters of the project?

By far the largest group of supporters of this project are the 14,000 people who live in Glasgow. Even those who have not taken advantage of any of the services offered by the project are strong supporters, since it has brought competitive cable television service at lower rates to the community.

The second strongest group of supporters is the business and industrial community. This project makes Glasgow an even more fertile field for business to grow in. We already have low cost electricity. Now we have the second most important commodity which business now need in order to flourish, low cost bandwidth.

The next strongest group of supporters would be the education community, chiefly those in the Glasgow Independent School System. This project has given them access to a completely new set of tools to be used in educating not only the children in the K-12 program, but actually the whole community. The project is used to launch video from any classroom to every other television in the city. The data communications capabilities of the project allow students to utilize the educational software that could previously be used only during the time that the student had available in the laboratory in school at computers in their home, in public libraries, or any other location that has a personal computer and interface to this project . This capability has made Glasgow a working model of how the Kentucky Department of Education could implement a statewide system utilizing technology in K-12 education.

12. Who are the strongest critics of the project? What is the nature of their criticism?

Obviously the strongest critics are the private cable television operators and the telephone companies. The nature of their criticism is just as obvious. They wish to preserve the status quo which allows them to establish monopolies and reap monopoly profits at the expense of all cities and all citizens of those cities. Local governments across the country have been frustrated for nearly a decade with their inability to force their franchised cable operators to play fair. They have been just as frustrated in their attempts to extract the sort of service and rates they desire from their local telephone companies. The rigid framework of regulation of telephone companies between state and local service commissions and the utilities they regulate leaves citie and citizens to watch the regulatory game from the sidelines, way back in the cheap seats. Further, the game uses rules and plays that are completely foreign to the average spectator. Our project seeks to provide the services people want through the magic of effective competition. The same market forces that work on nearly all other goods and services in our economy have brought, quite possibly, the finest cable television, high speed Internet access, and telephone services available in the United States to the small community of Glasgow, Kentucky. Through our project's ability to enable competition, rates have fallen and services improved drastically. In the cable and phone companies' attempts to desperately hang on to the monopoly profits to which they have become accustomed, they will call projects like this "creeping socialism and bolshevism." They will label it an attempt of government to interfere in private enterprise.

13. Should government operate a service like this? Is this not an example of government interfering with the "free enterprise system"?

What activities are the proper domain of government and which are best left for the private sector? Over one hundred years ago, Abraham Lincoln answered that question like this:

"The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all in their separate and individual capacities."

Answering that question today might be a little more difficult. Although it is hard to imagine a service that could not be provided by the private sector, we must apply tests on whether it would be desirable to allow them to do so.

These tests have been applied in thousands of cities in the past. Services such as police protection, fire protection, water and sewer service, and electricity have been determined to be so important to the prosperity of all citizens that none other than the municipal government have been deemed appropriate to operate these services. The "information superhighway" presently being considered will likely fall into the same category.

The nearest parallel to the decision cities face with respect to the "information superhighway" and the potential value it may carry to a community lies in the decisions it and hundreds of other communities made many years ago with electric power (the new technology at that time). Just before the turn of the century, word spread across the country about the mystical properties of electric lights and electricity in general. Excitement abounded throughout the young nation comparable to that which exists today when visionaries discuss the changes coming toward our communities with the dawning of the "information age."

As communities across the country began to urge the new electric companies to bring the "magic" to their towns, they began to be disappointed. Often, they found the companies unwilling to risk building electric facilities in small towns. Sometimes when they did build the facilities, most were unable to afford the exorbitant rates charged by companies for bringing electricity to their homes. The new electric companies found it much too easy to make tremendous profits in the larger cities, catering to the wealthiest consumers, to risk constructing expensive plant in small towns. As a result, civic minded leaders across the land became a new generation of pioneers by electing to "do it themselves" by creating their own electric systems. This scenario was repeated scores of times and by the turn of the century, hundreds of American towns had their own electric systems which came to be known as "public power" systems.

Through this century, the competition between those "public power" systems and the much larger and wealthier private power systems has produced tremendous benefits for all of us. Public power systems operated on a not-for-profit basis have established a benchmark rate that is used by many statewide public service commissions to regulate the rates of private power systems. The public spirit and determination of public power systems manifested itself in public education efforts that weaved electric power into the fabric of our daily lives. That same spirit and determination will be necessary to accomplish the same mission for the information age.

There can be little doubt that "information superhighways" will be constructed in this country without the existence of municipally owned systems. But, how quickly will they evolve? Will they be built in even the smallest towns? Will they be operated to the greatest benefit of the people in the communities they serve or would the needs of their stockholders come before the needs of the citizens? In this report, the position is taken that the answers to these questions lie in the history of the development of electric power in this country. President Franklin Roosevelt pushed for the development of electric power through competition from municipally owned systems which he said would create "forever a national yardstick to prevent extortion against the public and encourage the wider use of the servant of the people...electric power."

The same solutions that worked well in the "democratizing" of electric power will serve cities equally well in the democratization of information age technology. A municipally-owned "information superhighway" will enable competition in services such as cable television, telephony and computer networking which will spur the development of all of these commodities. These services will then take their place alongside electricity in becoming an economic engine to drive the economies of many cities into new prosperity for the coming "information age."

14. What have the financial results of the project been like?

1) Electric Division Net Income:

Fiscal Year ending June 30, 2001 - $466,686
Fiscal Year ending June 30, 2000 - $736,605
Fiscal Year ending June 30, 1999 - $575,894
Fiscal Year ending June 30, 1998 - $467,328
Fiscal Year ending June 30, 1997 - $148,252
Fiscal Year ending June 30, 1996 - $85,564
Fiscal Year ending June 30, 1995 - $225,860
Fiscal Year ending June 30, 1994 - $144,280
Fiscal Year ending June 30, 1993 - $55,097
Fiscal Year ending June 30, 1992 - ($184,149)
Fiscal Year ending June 30, 1991 - ($382,984)
Fiscal Year ending June 30, 1990 - $37,098
Fiscal Year ending June 30, 1989 - ($181,268)

2) Cable Television Division Net Income:

Fiscal Year ending June 30, 2001 - $41,652
Fiscal Year ending June 30, 2000 - $7,801
Fiscal Year ending June 30, 1999 - $7,303
Fiscal Year ending June 30, 1998 - $8,652
Fiscal Year ending June 30, 1997 - ($69,053)
Fiscal Year ending June 30, 1996 - ($42,767)
Fiscal Year ending June 30, 1995 - ($50,842)
Fiscal Year ending June 30, 1994 - ($68,596)
Fiscal Year ending June 30, 1993 - ($121,568)
Fiscal Year ending June 30, 1992 - ($139,863)
Fiscal Year ending June 30, 1991 - ($219,065)
Fiscal Year ending June 30, 1990 - ($244,195)
Fiscal Year ending June 30, 1989 - ($73,223)

3) LAN Division Net Income:

Fiscal Year ending June 30, 2001 - $40,322
Fiscal Year ending June 30, 2000 - $2,141
Fiscal Year ending June 30, 1999 - $4,382
Fiscal Year ending June 30, 1998 - $97
Fiscal Year ending June 30, 1997 - ($53,378)

4) Number of Cable Television Subscribers:

Fiscal Year ending June 30, 2004 - 7,786
Fiscal Year ending June 30, 2003 - 7,775
Fiscal Year ending June 30, 2002 - 7,602
Fiscal Year ending June 30, 2001 - 7,431
Fiscal Year ending June 30, 2000 - 3,939
Fiscal Year ending June 30, 1999 - 3,401
Fiscal Year ending June 30, 1998 - 3,036
Fiscal Year ending June 30, 1997 - 2,815
Fiscal Year ending June 30, 1996 - 2,512
Fiscal Year ending June 30, 1995 - 2,272
Fiscal Year ending June 30, 1994 - 2,060
Fiscal Year ending June 30, 1993 - 1,745
Fiscal Year ending June 30, 1992 - 1,333
Fiscal Year ending June 30, 1991 - 1,082
Fiscal Year ending June 30, 1990 - 875
Fiscal Year ending June 30, 1989 - 60

5) Number of Workstations Connected to HomeLAN:

Fiscal Year ending June 30, 2001 - 2,003
Fiscal Year ending June 30, 2000 - 1,660
Fiscal Year ending June 30, 1999 - 1,238
Fiscal Year ending June 30, 1998 - 567
Fiscal Year ending June 30, 1997 - 357
Fiscal Year ending June 30, 1996 - 177
Fiscal Year ending June 30, 1995 - 72
Fiscal Year ending June 30, 1994 - 40

15. What would you describe as the project's most important achievements to date?

Since many of the program's components are in varying stages of completion, it is difficult to know what the single most important achievement of the project will ultimately be. However, since the question is asked today, the single most important achievement today would have to be the additional money remaining in Glasgow's retail economy as a result of the sharply lower rates charged for cable television and high speed LAN/WAN services in Glasgow.

Since the project's inception, the immediate competitive environment in cable television has saved, by conservative estimates, nearly $14 million for the people of Glasgow. Since the inception of our high speed Internet access products in 1995, our citizens have saved over $2 million compared to what others pay for this service (in those rare places where it is actually available). In other cities without the benefits of competition, this money would go to the stockholders of the private cable operator. In Glasgow, this money has remained in the local retail economy and has turned over many times before leaving the community. This amount of money injected into the retail economy of a community of 14,000 people has had a significant impact. Retail development has taken place in Glasgow at a rapid pace, even at a time when the balance of the country, in similar rural areas, has been in economic doldrums.

Major industries such as R. R. Donnelley & Sons, Johnson Controls, Akebono Brake, International Paper, SKF Tapered Bearings, J.L. French, and others have made recent decisions to expand their operations or construct new facilities in Glasgow, even though Glasgow is lacking in many of the classic infrastructure features that tend to attract industrial development. For example, a manufacturer of stainless steel piping announced plans to relocate to Glasgow because, as an electric energy intensive operation, they were convinced the electric rates in Glasgow should be more competitive over a long term than anywhere else they could relocate to, as a result of the Broadband Highway Project.

16. What would you characterize as the project's most significant remaining shortcoming?

The project began life as a tool to give electric customers more choices in the way they purchase their electric energy. To date, we have actually made little progress in that area. That failure is a result of two main problems. First, there is a need for a more cost effective solution to allow an electric meter to report its readings back via the broadband interface to construct a database that the customer can query and make decisions on future purchases based upon that information. The second problem exists because the electric industry is still not open and deregulated. Glasgow still has an all-requirements contract with the Tennessee Valley Authority. In other words, we are not yet allowed to purchase our electric energy from whomever we please. The Tennessee Valley Authority is a very large federally owned and operated electric utility. As a result, adapting and implementing innovative ideas like ours is difficult and slow to say the least. We are only now beginning to interest TVA in the possibilities of utilizing communications technology to operate existing electric systems more efficiently and mitigate the need for construction of new generating plants.

The solution to the electric meter interface problem is not complicated. It is much more a matter of economics than technology. The City of Glasgow, on its own, does not have the resources to pay for such an interface to be custom built. However, with enough attention drawn to this project, other cities should begin demanding the same hardware and eventually the economics will be in place for hardware and software vendors to develop a product to suit the growing market demand. In fact, elsewhere in this booklet you will find copies of press releases from vendors announcing that they are doing just that.

The problem with TVA is more difficult. Even if the meter product mentioned above were cheap and widely available, the remaining necessary component would be a time differentiated wholesale rate structure that we could then pass along to electric consumers in Glasgow. TVA's insistence on doing business "the way they have always done it" is a problem that will require Congressional input to remedy. Hopefully, the coming philosophy of open access to electric power and required wholesale and retail wheeling will help open TVA's eyes to the need to embrace this technology in order to survive. Even if TVA does not realize this, our project will put us in perfect position to exploit the coming open access to electric power generated by other sources.

17. Aren't you afraid the phone companies will come in and compete with you?

The answer is, not in Glasgow. Since the cable TV market is already divided between two well-entrenched competitors who are charging some of the lowest rates in the nation, the potential for a third provider to come in and capture a significant portion of the market seems extremely remote. My real fear, were I in a city that had not constructed a municipally-owned network, would be that the phone company and cable company would begin to compete with each other and stratify the market, or even worse, form some unholy alliance that would dominate the voice, cable TV, and data communications market freezing the city out of ever creating the sort of competition that the citizens really desire. It really appears to us that the secret to how all of this plays out is in timing. Whoever builds a ubiquitous broadband network capable of carrying the assortment of services which Glasgow offers, will be the most likely to be successful in the information superhighway business. In other words, "the early bird will get the worm".

18. Aren't you afraid wireless technology will render your system obsolete?

No. While many advances are occurring in the field of wireless broadband connections, there is still no chance that wireless will ever be able to fully compete with a fiber based broadband network. Every fiber optic thread, the width of a human hair, can carry a thousand times more information on one path than all current wireless technologies put together. That view is also shared by the world's largest management consulting firm, Andersen Consulting. In a recent study released by Andersen Consulting entitled "The Role of Broadband Communications and the Utility of the Future," they state,

"customer focused services are likely to be the primary method of differentiating energy providers in the future...although radio and telephone technologies can handle some of the proposed services, broadband communications methods - typically fiber optic or coaxial cable - offer the highest flexibility to meet the current and future needs of the utilities."

19. Has the project received any awards or other honors?

The Energy Innovator Award - 1991 - Sponsored by the American Public Power Association. This award was created in 1981 and is presented annually. It honors local publicly-owned electric utilities that have made outstanding advances in the development or applications of highly creative, energy-efficient techniques or technologies.

The Ernie Award - 1992 and 1993 - Sponsored by the Glasgow/Barren County Chamber of Commerce. This award is also presented annually in recognition of individuals and organizations within Barren County, Kentucky, for outstanding leadership achievements on state and national levels and symbolizes excellence demonstrated in their professional endeavors.

Finalist for the Innovations in State and Local Government Award - 1993 - This award program was established in 1985 by the Ford Foundation and is administered by the John F. Kennedy School of Government at Harvard University. It recognizes exemplary new programs and policies that address important social and economic issues.

President's Award of Excellence for Effective Government - 1994 - This Award is presented annually by the Kentucky League of Cities.

James H. McGraw Award - 1995 - This annual award, presented by Electrical World magazine, honors corporations and project owners/operators that have made a significant contribution to the advancement of the electric power industry through innovative and constructive business practices.

20. How do you believe the principal problems addressed by the project will evolve over the next five years, and how are you going to respond?

I believe that the proliferation of broadband networks and the corresponding high bandwidth pipes to the Internet will speed the development of electric meter interfaces. The availability of this hardware will allow the realtime electricity pricing initiatives of our project to come to fruition. That means that within the next five years electric customers in Glasgow will be able to use their PC to monitor their electric power, water and natural gas consumption. Daily feedback on the consumption levels, coupled with a new time differentiated rate structure, will allow everyone to alter his lifestyle and lower his monthly cost of energy.

A continual flow of new cable television programming choices will become available to consumers in Glasgow and nationwide. Evolving technology, coupled with the continued competitive cable television environment in Glasgow, will cause our cable television customers to become among the first in the nation to receive all their cable television service on an a la carte basis. Customers will decide service by service what programming they would like to receive in their home, and thus the "basic programming package" of the past will disappear in favor of a customized package of services for each home. The PC will be used to order programming, delivered digitally, so that anyone can customize their entertainment package according to their own tastes.

As more entrepreneurs recognize the viability of doing business, underpinned with the movement of information as opposed to making provisions for the actual presence of consumers, automobiles, etc., the project's emphasis will shift from an entertainment medium to its highest use, that of a data communications highway. The City of Glasgow will begin to realize real savings through a decreasing need for new streets, highways, and other automobile related infrastructure, as more and more businesses cater to an aging population by offering their services through the broadband highway. Indeed, this transition is already occurring. Since we are now beginning to deliver Internet access to our consumers using our HomeLAN product, our connections to computers is beginning to outstrip our connections to TV's. Since children in our schools begin using E-mail in elementary school, Glasgow is likely to become one of the first cities in the country to fully realize the increases in productivity in communications that a fully connected general public and business community can accomplish.

21. Can we do this in my city?

The answer is absolutely. Confusion reigns within the ranks of five of the world's largest industries: entertainment, publishing, consumer electronics, computing and communications. With dizzying speed, the capability to cheaply convey huge chunks of video, sound, graphics, and text in digital form is outdistancing everyone's ability to predict the resultant. Many within these businesses are busy trying to form alliances with each other - joining hands in a sort of a grown-up's version of "red rover" in hope of preventing this irresistible force from breaking their ranks. In order to assure that these alliances do not form to mold this technology into that which serves the greed of some stockholders instead of the needs of all people, projects like this one are necessary. The competition from municipally owned "information superhighways" will weaken the hand-holds between those who would harness information age power for their own purposes.

While much attention is focused on interactive TV, movies on demand and multimedia machines such as CD-ROM players and other sophisticated "games", it is widely hoped that the digital world of the next phase of the information age will be much more vast. The ultimate effect of the construction of "information superhighways" will be that anyone will be able to obtain anything electronic, at any time, in the office, at home or on the road, through an abundance of devices and networks. Every single activity of our lives will be segmented into that which can be accomplished through the movement of information and, ever more rarely, that which cannot.

22. How can I learn more about this project?

Our address, telephone number, fax number and email address are listed below. Please let us hear your questions and comments.

Glasgow Electric Plant Board
P.O. Box 1809
Glasgow, KY 42142-1809
(270) 651-8341 (voice)
(270) 651-7572 (fax)

Email: epb@glasgow-ky.com

Glasgow's Official Website: www.glasgow-ky.com

The EPB Website: www.glasgowepb.net

• Public Power Weekly - 5/9/88 - "Glasgow, Ky., to Install Cable to Automate Utility Distributor"
  
• Lexington Herald-Leader (Lexington, Kentucky) - 11/21/88 - "2 Cities Take Over TV Cable After Viewers Signal Discontent" - Michelle Berman
  
• The Jonesboro Sun (Jonesboro, Arkansas) - 12/7/88 - "Data Control System Eyed" - Stan Gray
  
• Public Power Weekly - 3/5/90 - "APPA Asks FCC to Prohibit Exclusive Cable Program Pacts"
  
• Public Power Weekly - 4/23/90 - "APPA Calls for Legislation to Rein in Cable TV Industry"
  
• TVPPA News - September-October 1991 - "Tune In Tomorrow" - Julie Johnson
  
• Daily News (Bowling Green, Kentucky) - 10/2/91 - "A Look at Cable: Glasgow Sees Benefits From Having Two Systems" - Angela Garrett
  
• Communications News - November 1991 - "It's Finally Happened: Cable TV Company Provides Phone Service" - Paul Kirvan
  
• The Times & Democrat (Orangeburg, South Carolina) - 1/23/92 - "Kentucky City Offers Insight on a City Cable TV System" - Danno Farrington
  
• Wall Street Journal - 2/18/92 - "Blurred Borders - Industries Find Growth of Digital Electronics Brings In Competitors" - G. Pascal Zachary
  
• The Courier Journal (Louisville, Kentucky) - 3/16/92 - "Cable City" - Bob Dietel
  
• Wall Street Journal - 4/6/92 - "Power Play" - G. Pascal Zachary
  
• Kansas City Kansan (Kansas City, Kansas) - 4/7/92 - "BPU Studying Communication-Cable System - Kentucky electrical power official touts what is called 'broadband highway system'" - Bob Frisked
  
• GTE South Area Telephone Operations Newsletter - 4/8/92 - "Kentucky Electric Company Also Providing Cable, Telephone Service" - Ann Chervil
  
• Electric Light and Power - September 1992 - "Super Communication Highways Offer Multiple Services" - Wayne Beady
  
• "The Common Ground of Local Communications" - reprint of remarks by John L. Clendenin, Chairman and CEO of BellSouth Corporation as delivered to United States Telephone Association Annual Convention, New Orleans Louisiana, 10/6/92
  
• MultiChannel News - 12/14/92 - "Are Utilities Discovering They Can Use Fiber for Cable?" - Gary Kim
  
• Journal Communications - Glasgow/Barren County Chamber of Commerce Annual Magazine - 1993 - "Teaching + Technology = Terrific!" - Kay West
  
• Public Power - January-February 1993 - "Taming the Cable Industry" - Ted Coombes
  
• MultiChannel News - 1/25/93 - "In Glasgow (Ky.), the Accent's on Competition" - Rod Granger
  
• Chamber Business - Glasgow/Barren County Chamber of Commerce Newsletter - February 1993 - "EPB and Glasgow Independent Schools Form Technology Partnership"
  
• Public Power - July-August 1993 - "Don't Miss the Fiber Optic Opportunities" - Larry Hobart
  
• MultiChannel News - 5/10/93 - "Longer Ranges Propel Voice-Over-Cable" - Fred Dawson
  
• Public Power - September-October 1993 - "The Lure of Fiber Optics" - Bob Bruce
  
• PC Week - 9/27/93 - "Information Highway: Powering Up - Power Companies Join NII Surge" - Kimberly Patch
  
• Communications Daily - 10/5/93 - "Telephony"
  
• Communications Industries Report - November 1993 - "Utilities Turned On by Communications' Future" - Dick Larsen
  
• Communications Industries Report - November 1993 - "Future Old Hat for Small Kentucky Town"
  
• Communications Daily - 1/10/94 - "Kentucky Town Ready for Cable Telephony Test"
  
• New Technology Week - 1/24/94 - "Utilities May Bolster Field as Upstarts in NII Race" - Ken Jacobson
  
• Network World - 1/31/94 - "Electric Utility Wants to Ride Info Highway" - David Rohde
  
• MultiChannel News - 1/31/94 - "Power Companies Turn Up the Heat on Highway" - Jeannine Aversa
  
• The Electricity Journal - February 1994 - "Information: The Coin of the Realm in a Competitive Electric Market" - Philip R. O'Connor and Marc A. Vallen
  
• Forbes - 2/28/94 - "Three on a Pole" - Manjeet Kripalani
  
• The Sunday News (Tullahoma, Tennessee) - May 1, 1994 - "TUB Officials Enthused Over 'Information Highway' System" - Joe Patton
  
• LAN Magazine - June 1994 - "The Extra Mile" - Ted Bunker
  
• New York Times - 7/26/94 - "Big Hopes Put on Electric Wires" - Agis Salpukas
  
• ICMA Newsletter - 8/8/94 - "Entering the Information Highway"
  
• MicroSoftware News - June 1994 - "Local Innovations - Community Computer Network"
  
• Kentucky BellNews - July/August, 1994 - "Glasgow Electric Plant Board Writing the Book on Competition" - Jackie Wilham
  
• Photonics Spectra - October 1994 - "Supplanting the Field of Dreams" - Howard Rausch
  
• The Kentucky City-Awards of Excellence Edition - October 1994 - "Partners In Technology"
  
• Convergence '94 - November 1994 - "Utilities Energized for Telecom Business" - Judith Lockwood
  
• Communications Technology - December 1994 - "The Utilities Role: Building the Ubiquinetwork" - George Lawton
  
• Coopers & Lybrand - Public Utility Topics - January 1995 - "Information Superhighway: Three Viewpoints"
  
• The Internet Letter - 2/1/95 - "Electric Company Plans Unlimited T-1 Internet Access At $19.95 a Month"
  
• Electric Power Research Institute (EPRI) Journal - January-February 1995 - "Grabbing a Lane on the Information Superhighway" - Peter Jaret
  
• MultiChannel News - 2/20/95 - "MCI, Kentucky Cable Utility To Offer High-Speed Internet Link" - Kent Gibbons
  
• Park City Daily News - March 1995 - "Sampling of Cities Shows Competition Lowers CATV Bills" - Brent Wilder
  
• Information Week - 3/6/95 - "Testing Internet Access - MCI Teams With Utility for 2-Mbps Service" - Clinton Wilder
  
• HotWired (Internet version) - April 1995 - "High Bandwith Hits Main Street" - Todd Lappin
  
• Public Utilities Fortnightly - 5/15/95 - "Electric Utilities: Steering Clear on the Information Highway" - James H. McGrew
  
• The Wall Street Journal - 6/19/95 - "Trojan Horse? In the Race to Wire Your Home, Don't Rule Out the Electric Utilities" - Bill Richards
  
• EPRI Journal - July/August 1995 - "Diversification in the '90s" - Leslie Lamarre
  
• Wired - August 1995 - "Country Road Warrior" - Todd Lappin
  
• Telephony - 8/14/95 - "Competition Rounds the Bend" - Pat Blake
  
• Public Power - September-October 1995 - "The Brave New Interconnected World" - Jeanne Wickline LaBella
  
• Communications Technology - September 1995 - "More Power, Please" - Jack Webb
  
• Broadcasting & Cable - 10/2/95 - "Cable's New Competition: Cities" - Rich Brown
  
• USA Today - 10/31/95 - "Cyberspace Snares Entire Town in a Net of Business Opportunity" - Paul Hoversten, Gas Research Institute - November/December 1995
  
• The Paducah Sun - 12/17/95 - "Cybertown" - David Fraser and Bruce Gardner
  
• Journal Communications - Glasgow/Barren County Chamber of Commerce Annual Magazine - 1996 - "Glasgow's Broadband Highway" - Debbie Gibson
  
• Washington Technology - 1/25/96 - "Socialized Silicon, Public Access and the American Dream" - Mara Lee
  
• The Courier Journal - 2/3/96 - "Bill Would Blur Lines Between Cable, Phone" - Ric Manning
  
• Boardwatch - February 1996 - "City Utility in Cable, Phone & Internet Business"
  
• Government Technology - February 1996 - "The World's Most Wired Community?"
  
• USA Weekend - 2/23-25/96 - "This Town is Wired" - David Diamond
  
• CED: Communications Engineering & Design - March 1996 - "Power (and Telecom) to the People" - Thomas G. Robinson
  
• Economic Edge - Spring 1996 - "How a Small Town in the Valley Accidentally Landed Smack in the Middle of the Information Age" - John Yates
  
• Gas Research Institute - April 1996 - "Case Studies: Utilities on the Information Highway"
  
• Chartwell - Customer Communications and Meter Reading - June 1996 - "In Glasgow, KY tradition: Cedar Falls Utilities to offer full telecom services"
  
• Entrepreneur - June 1996 - "Electric Avenues" - Cynthia E. Griffin
  
• X-change - September 1996 - "How a Small Town Became a Digital Veg-O-Matic" - Geof Petch
  
• The Courier Journal Scene - October 19, 1996 - "High Tech - Glasgow's Full Service Utility Offers Electricity, Cable TV and the Internet" - Ric Manning
  
• Hart's Energy Markets - November 1996 - "Sewing Up the Competition" and "The New Information Utility Pattern" - Richard Nemec
  
• The Paducah Sun - November 16, 1996 - "Paducah Power Renews Cable TV Interest" - David Fraser
  
• Multichannel News - December 2, 1996 - "Power Companies See Light in Telecom Ventures" - Matt Pottinger
  
• Public Power Weekly - January 27, 1997 - "Glasgow, Ky., Taps New Market by Assuming Old Role"
  
• Information Technologies for Utilities - Spring 1997 - "Digging Deeper, Utilities Discover New Business Gems in Net Motherlode" - Warren B. Causey
  
• Electrical World - May 1997 - "Energy/Telecom Convergence" - Catherine Lacoursiere
  
• The State Journal - May 11, 1997 - "Q & A" - Jacob Clabes
  
• Web Week - June 16, 1997 - "Utilities: A Challenge to ISP's?" - Michelle V. Rafter
  
• Chicago Tribune - June 23, 1997 - "Power Companies Seeing Light in Market for Internet Service" - Michelle V. Rafter
  
• Energy Markets - September 1997 - "Rebundled Services: What the Customer Ordered?" - Richard Nemec
  
• The New York Times - October 4, 1997 - "Some Local Cheers for 'Creeping Socialism' " - Barnaby J. Feder
  
• The New York Times - November 3, 1997 - "How Two Nonprofit Power Systems Plan to Capitalize on Deregulation"
  
• TVPPA News - January-February 1998 - "Opportunities to Serve" - Leslie W. Smith
  
• Cablecaster - February 1998 - "Power Play" - Greg O'Brien
  
• Tennessee Town & City - March 30, 1998 - "The Future is Now in Glasgow" - Sharon H. Fitzgerald
  
• civic.com - May 1998 - "America's Community Network Pioneers" - Jim Heid
  
• Telecommunications - September 1999 - Commentary "Prohibition All Over Again" - Sam Masud, Sr. Technology Editor
  
• City - Fall 1999 - "Telecommunications: From call box to fiber network...making the right connections" - Bill Straub
  
• Public Power - September-October 1999 - "Local Governments are Paving the Information Highway" - Steven C. Carlson
  
• Daily News Journal (Memphis, TN) - October 11, 1999 - "Electric Departments Can Make Cable TV Business Work" - Chris Shofner