A Tennessee city once infamous for the smoke-belching foundries that blanketed its buildings and streets with a heavy layer of soot is turning to lightning-fast Internet speeds to try to transform itself into a vibrant technology hub.
Through a combination of political will and federal stimulus money, 175-year-old Chattanooga became the first US city to broadly offer Internet speeds of a gigabit per second — nearly 50 times the US’ broadband average.
Whether that is enough to turn a modest southern city into a mini Silicon Valley remains to be seen, but local leaders are betting that they have positioned themselves well for what lies ahead in the global economy.
“This is an old town with a new vision,” said Aaron Welch, who became a hero of the city’s emerging tech scene when he sold his app that reserves specific tables at restaurants to a rival for US$11.5 million.
Other startups migrating to the “Gig City” to tap the government-owned broadband network include 3D Ops — which converts magnetic resonance imaging or computed tomography scans into anatomical replicas to help doctors prepare for surgeries — shoemaker Feetz, which makes custom footwear using 3D printing technology; and moving service Bellhops, which coordinates the logistics of managing 8,000 college student contractors nationwide.
The nascent tech scene is the latest development in Chattanooga’s decades-long effort to reinvent itself after a 1969 federal study called it the most polluted US city.
A downtown revival over the past two decades was anchored by the Tennessee Aquarium and a US$120 million redevelopment of the Tennessee River waterfront. German automaker Volkswagen in 2008 cited the city’s turnaround in its decision to build a US$1 billion assembly plant on the site of a former TNT plant.
The city inaugurated its fiber-optic network — with a US$111 million boost from the 2009 federal stimulus package — even as larger cities like Atlanta, Georgia, and Nashville, Tennessee, wait for private providers like AT&T and Google to roll out comparable service.
“We’re at a pivotal time in the relationship between cities and communications networks,” said Susan Crawford, a professor at Harvard Law School who has written extensively about the power of Internet providers. “And there are mayors all over the country who are watching Chattanooga with envy and wishing and planning for fiber-optic networks of their own.”
While commercial providers pick and choose which neighborhoods to serve, Chattanooga’s network covers the city.
“The whole point is that you want everyone to have this capacity and not to leave anyone behind,” Crawford said.
Chattanooga’s fiber network grew out of efforts to install a smart electric grid in a city where tornados and ice storms have caused serious power outages.
During the upgrade, the Electric Power Board (EPB) also issued US$226 million in bonds to help fund a fiber-optic network, hoping the superfast phone and Internet service would attract new business.
According to the US Federal Communications Commission, the average broadband speed last year was 21.2 megabits per second. One gigabit equals 1,000 megabits.
The fiber network has upload speeds matching downloads, bringing near real-time transfer of information between high-bandwidth users. It let musicians T Bone Burnett in Los Angeles and Chuck Mead in Chattanooga play a live concert together while thousands of kilometers apart in December last year.
Jonathan Taplin, director of the Annenberg Innovation Lab at the University of Southern California, which helped organize the concert, said entertainment executives might be intrigued.
James Cameron, director of Avatar and Titanic, wants to make films at double the current ultra-high-definition 4K standard, Taplin said. The 500 megabits per second needed would be out of reach for most, but Chattanooga’s fiber customers “could handle that today.”
The municipal network has been criticized for unfairly crowding out private providers.
“EPB’s entire network is propped up on the backs of ratepayers and taxpayers,” said Justin Owen, head of the Beacon Center of Tennessee, a conservative think tank.
Chattanooga Mayor Andy Berke counters that the city had no other option.
“No one was begging to come to Chattanooga to put up a fiber-optic network,” he said.
The EPB initially charged US$350 a month for the gigabyte speed, but has slashed that to US$70, driving subscriptions from fewer than 100 to more than 4,700. Another 55,000 residential customers get the cheaper 100-megabyte service.
Tech startup guru Sheldon Grizzle founded The Company Lab to hold tech competitions and mentorship programs that take advantage of the city’s Internet capacity — and to connect entrepreneurs with investors. They included Welch, who first hashed out his restaurant reservation app idea in one of the lab’s 48-hour startup competitions.
Grizzle in 2011 persuaded Welch to quit his day job by helping land a US$65,000 investment in his company, Quickcue, which was sold to reservation giant Open Table last year. Welch then founded Iron Gaming, which hosts competitions for gamers and is working on creating a TV network for computer geeks.
Still, Welch said developers still struggle to lure financial backers in a city long associated with heavy industry, the Chattanooga Choo-Choo and the US’ first Coca-Cola bottling plant — though there are signs that venture capitalists in cities like San Francisco and Los Angeles might finally be paying attention.
Other cities, including Austin, Texas; Santa Monica, California; and Kansas City, are coming online with their own fiber networks, while several others have plans to build them. Berke sees that as a good thing for his city.
“If nobody else has it, there’s nothing for us to develop that will work elsewhere,” he said.
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