Phoenix Center Skewers Chattanooga Claims for Muni Broadband

Chief economist says unemployment drop citation is bogus
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Phoenix Center chief economist George Ford has taken issue with a story in The Tennessean newspaper in which Chattanooga Mayor Andy Berke touts the economic benefits of its municipal fiber network.

A federal appeals court recently rejected the FCC's preemption of a Tennessee state law limiting the expansion of that city network, but the story precedes that decision and makes no mention of it.

The story points out that, over the past three years, "the city’s unemployment rate has dropped to 4.1 percent from 7.8 percent and the wage rate has also been climbing," citing a Berke speech to the Fiber to the Home Council Americas conference in June.

Berke is quoted in the story as saying the wage rate is definitely linked to internet-related jobs and the tech sector.

“Our fiber goes to each and every home,” the paper quoted Berke as saying. “We can’t have digital gated communities. If we do that we and only allow fiber to go to some parts of the city, some parts of the state, we will see technology widen the gulf between people as opposed to bridging it."

But Ford, in an op ed in The Tennessean responding to the story, took issue with what he said was Berke's lead claim that "the city’s unemployment rate has dropped to 4.1 percent from 7.8 percent."

Ford pointed out that over the same period the nationwide unemployment rate had fallen from 7.5% to 4.7%, saying that "In terms of unemployment, Chattanooga isn’t much different than the nation as a whole."

"Unless the Chattanooga system is having nationwide economic impacts, it’s pretty clear that attributing the unemployment decline to a city broadband network is bogus," said Ford.

He said that looking at statewide unemployment rates, tying the rate drop to the muni broadband net is even more problematic. "For those cities operating broadband networks, unemployment has fallen by an average of 4.0 points," he said, while "in cities without municipal systems, unemployment has fallen by 4.7 points."

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