Columbus Light and Water has hired Tennessee-based Kersey Consulting Services to conduct a feasibility study to gauge whether CLW could provide internet and phone services to its Columbus customers. About 2,500 city businesses have been sent surveys from CLW asking about their satisfaction with current area internet providers. The survey is the first step in gauging whether CLW could break into the internet provider business. Photo by: Dispatch file photo
October 16, 2018 10:43:00 AM
Columbus Light and Water has partnered with a broadband consulting firm to explore whether Columbus business owners are open to the idea of receiving phone and internet service from their local public utility company.
CLW's board voted in September to hire Tennessee-based Kersey Consulting Services, which has been working with power companies in Tennessee and Kentucky for nearly 10 years, to conduct the study for $28,000.
"(The company's) services are to do feasibility studies for communities that are interested in doing internet, broadband, telephone, some form of communication," CLW Manager Todd Gale said.
On Friday, CLW mailed a survey to roughly 2,500 businesses in the city limits, Gale said. The survey asks 14 questions designed to gauge how satisfied the businesses are with their phone and internet providers and whether there's a niche there that CLW can fill.
It's the first step in a feasibility assessment that Kersey Consulting will use to form a financial model for utility companies looking to expand their services to phone or internet, founder Kim Kersey said.
"We want to find out how well the current internet and telephone providers are serving their customers," Kersey said. "We want to measure customer satisfaction with their current provider, we want to explain the proposed services that Columbus Light and Water would offer for internet and telephone, and then finally ... we ask about the surveyed customer's likelihood to switch to Columbus Light and Water for their gigabyte internet and telephone service."
The results of the surveys, which are due Nov. 2, will be entered into the Kersey financial model, which also includes operating costs and all other revenues and expenses required for creating and maintaining that kind of network, he said.
"All that goes together to tell us whether that's a feasible project or not," he said.
While both Gale and Kersey estimated the financial model would be complete and ready to present to CLW's board in January, most of the details about the potential network are still to be determined -- including how much the proposed services would cost, how many customers those services would be available to and even whether CLW would offer the services to both business and residential customers.
Kersey said the surveys and feasibility study start out looking at business and industry because businesses today rely so heavily on internet for communication.
"We think this has the most bang for the buck for the community as a whole to be able to put this type of robust business network in place," Kersey said. "We'll have kind of a spillover effect for everybody."
If CLW decides to offer phone and internet services, Gale said the utility company would basically have to go out and create a new company.
"Right now, we have the water side of the house and the electric side of the house, and each has their separate books for accounting," he said. "(Tennessee Valley Authority, where CLW purchases power) would require the same thing here, so you would be creating a third company."
He added the services offered to customers in Columbus would be in direct competition with private companies already providing phone and internet in the area.
Benefits to the community
Gale said if there is enough interest from the community, implementing phone and internet could help save costs on electric power down the road.
"This new company leasing fiber from the electric department would help generate additional income and help offset any future rate increases," Gale said. "Say for instance, when the utilities started selling recyclable waste water to TVA, that additional revenue helped offset future water rate increases. So we're kind of exploring any avenue of revenue to, for lack of a better term, prop up the rates."
Kersey said it's often a "boon" to economic and retail development in communities.
"Many communities with these types of networks have been more successful in attracting the types of industries and businesses that are looking for good communication," he said. "It's a good support for the local businesses. And it also helps recruit new jobs, new industries and things like that to the market."
He added it's also just more convenient for a customer to have one office which handles power, water and phone and internet service.
Kersey said his company has worked with utility companies all over TVA's coverage area to conduct similar studies, including with Union City Electric Systems, Erwin Utilities and Johnson City Power Board, all in Tennessee. Columbus is the first Mississippi community he has worked with.
Kersey Consulting began working with Union City Energy Authority in Union City, Tennessee in 2016, said Jerry Bailey, the authority's CEO. After receiving the feasibility study, Bailey said his company began providing internet services to commercial customers in their coverage area in March 2017. Now, he said, they're in the process of providing those services to residential customers.
Bailey said Kersey "knows what he's talking about."
"I couldn't ask for somebody to head us in a better direction," he said.
While Kersey Consulting has done feasibility studies both with municipalities and with more rural communities, municipalities often have more experience with the type of work Kersey Consulting does, Kersey said.
"I enjoy working with municipal utilities like Columbus Light and Water because they're in the infrastructure business," he said. "They understand how to build networks -- electric networks, water (systems), whatever it may be -- so they have some expertise that they bring to the (table) to begin with. And then we look about hiring specifically trained technical employees for the fiber operations and broadband. It depends on what the opportunities are, what the skill sets are presently with the client."
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