gig cityDespite all the gigabit announcements we’ve seen over the last couple of years, the number of major cities where gigabit service already has been deployed to any major extent is still quite small. A July report from the Benton Foundation and Gig.U puts the number at six.

Of those, Chattanooga has had gigabit service for the longest. Local power company EPB, which owns the network, launched gigabit service there in 2009. And to this day, Chattanooga is the only city whose offering extends citywide.

That makes the market a kind of bellwether for gauging the impact of gigabit service – and judging by what Telecompetitor saw at a press event last week that was organized by the Chattanooga Area Chamber of Commerce, the results there bode well for the gigabit movement.

Gigabit and the Economy
Chattanooga has experienced the third highest wage growth of all mid-size U.S. cities and has added many high-tech jobs paying an average of $69,000 a year, noted Mayor Andy Berke of Chattanooga at GIGTANK Demo Day on July 28. GIGTANK Demo Day, the centerpiece of the Chattanooga press event, gives high-tech startups the opportunity to win free office space in Chattanooga, as well as the opportunity to pitch to several venture capital firms.

Perhaps ironically, not all of the high-tech ventures percolating in Chattanooga are developing apps that require high-speed connectivity. Some companies don’t even need high-speed connectivity to help in the development process. But as Greg Compton, an executive with color-matching technology startup Variable put it, gigabit service “makes a thousand small things better.” Web pages and email load more quickly, for example.

Charles Wood, vice president of economic development for the Chattanooga Area Chamber of Commerce, notes that some companies make the decision to locate in Chattanooga because of an indirect benefit of the city’s fiber infrastructure: The fiber network also supports the city’s smart grid infrastructure — and according to EPB, that infrastructure enables the company to restore service to most customers within just a few minutes, an improvement that can be measured in days over what the company experienced previously. That capability has strong appeal for financial firms or other companies that can lose hundreds of thousands of dollars for every minute power is out, noted Wood.

Some people in Chattanooga’s high-tech community — including Ted Alling, a partner with venture capital firm Lamp Post Group – say they chose the city because of the talent pool. “When EPB made the investment . . . it attracted talent,” said Alling.

Calling Chattanooga a “southern city with progressive values,” Alling believes Chattanooga could be the next Austin, Texas – an apparent reference to Austin’s combination of an attractive lifestyle and high-tech industry that has driven explosive growth.

ChattanogaLamp Post Group encourages startups it invests in to share ideas with other startups by offering them office space in its gigabit-connected building in downtown Chattanooga. INCubator a gigabit-connected space operated by the Hamilton County Business Development Center, offers a similar opportunity without the VC investment. And soon the city also will have an innovation district, with The Company Lab — another company that offers advice for high-tech startups — as its anchor tenant.

Just a few examples of high-tech startups that have relocated to or started up in Chattanooga include:

  • Bellhops. a company that sims to do for the moving industry what Uber is doing for the taxi business
  • Branch Technology, a company that boasts the world’s largest 3-D printer, which the company uses to create a new type of framework for wall-builders. Builders add their own foam to the honeycomb-like structure and add their own drywall or other finishing – an application that enables architects to design walls that aren’t perfectly rectangularIMG_1611
  • Feetz, another 3D printing-enabled company that uses the technology to tailor-make shoes which according to the company, fit perfectly

Moving Forward
Other Chattanooga initiatives should help contribute longer term to the talent pool. Center Centre trains people on how to develop online user interfaces that aim to boost companies’ bottom line by enhancing the user experience. And Tech Town offers technology-oriented summer camps and after-school programs that give children as young as seven hands-on experience with high-tech equipment. Young people choose from a variety of focus areas – including 3D printing, advanced video production, electronic gaming and more.

Chattanooga’s experience should be good news for other communities considering a gigabit deployment, as it suggest that the secondary impact of gigabit may be stronger than expected. The experiences there also suggest, however, that gigabit will have a bigger impact on a community when people in the community undertake additional efforts to leverage the technology. Initiatives like GIGTANK, Tech Town, the INCubator and others undoubtedly have had a multiplier effect.

One other thing I’ve been pondering since visiting Chattanooga is how many Chattanoogas the U.S. can support. I’d like to think Chattanooga’s experience could be repeated many times over. Alternatively, it’s possible that the country can only support a certain number of high-tech gigabit-fueled Chattanooga-like communities – and if that’s true, any communities that have been dragging their heels on making gigabit plans or that haven’t done enough to maximize gigabit’s impact should make haste to do so.

Join the Conversation

3 thoughts on “Gigabit and the Economy: A First-Hand Look at Chattanooga

  1. Shouldn't this post really be Internet and the Economy? As the author points out, it's not gigabit that is needed for many of the identified projects – it's just good quality Internet access. Wouldn't solid, quality 50 Mbps connections deliver the same results?

  2. With all due respect George – this is small minded thinking. Chattanooga leaders are trying to position the city for the next 25 years. Don't make the mistake in planning for now — plan for the future. The exposure alone of leading out in front with Gigabit and having a long term view is helping Chattanooga. Without it, they wouldn't be seeing these results.

  3. Actually George to provide "solid, quality 50 Mbps " service might require 1 Gb/s access. Given overhead, contention, packet loss, line noise and planning for traffic load variation, etc. certainly a connection of 100s of Mb/s is necessary to deliver "solid, quality 50 Mbps " service .

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