Government monopolies vs. private businesses

Government monopolies vs. private businesses

By Steve Hunley

Last week, the Knoxville City Council voted to allow the Knoxville Utilities Board to go into the broadband business. KUB is preparing to spend $700 million of ratepayer’s money over a period of seven years to launch their new project. Of course they are packaging their proposal under the cloak of helping poor folks. Keep in mind, evidently only 2% of the folks inside the area served by KUB are without broadband.
The first question I’d like to ask readers is: how comfortable would you be if your cable company could cut off your electricity and water service? The Knoxville Utilities Board is a monolithic agency funded entirely by ratepayers which, for the most part, are all taxpayers. Our bills are already rounded up monthly to help out folks who have trouble paying their own electric and water bills by providing for weatherization to reduce energy costs. Note on your bills what you pay, for instance, for “basic” water and waste water service. That means the minimum rather than the amount you actually use. A single individual can be paying $50 per month for the basic service while actually using FAR less than that amount.
KUB’s CEO, Gabriel Bolas, began with a starting salary of $295,000 annually. His predecessor, Mintha Roach, had a salary and compensation package of $367,762 in 2018. Ms. Roach’s salary in 2010 was $207,100. The KUB executives are clearly mighty well paid.
Knox County Mayor Glenn Jacobs is against KUB going into the cable business. Jacobs recently asked cable/broadband companies to attend a meeting; everybody came but KUB. That same meeting included the mayors of Grainger and Union counties. KUB’s reach goes far beyond the city limits of Knoxville; it extends through Grainger and Union counties and encompasses much of Knox County and parts of Jefferson and Sevier counties. Yet does the KUB Board really reflect service area diversity in its board members? No, it does not. I don’t find anyone from Grainger or Union counties on the board. I don’t see anyone from Gibbs or Mount Olive on the board. Of course the wokesters inside the City of Knoxville coo and purr about diversity and ponder putting someone to represent those living in subsidized housing as member of the KUB Board, as well as an environmentalist. Yet actual ratepayers are under-represented, a fact State Senator Frank Niceley has recognized. Niceley has sponsored legislation to make the KUB Board of Directors more representative of all ratepayers.
A push is being made now to implement a percentage of income payment system by the social justice warriors in Knoxville. That allows some households in the area to pay only a certain percentage of income for water and electricity. Reverend Calvin Skinner in a recent press conference has said 23% of folks in Knoxville are “energy burdened”, meaning they pay more than 10% of their household income for utilities. Skinner says some people living in subsidized housing pay more in utilities than rent. Naturally that would be true as people living in subsidized housing pay little or nothing in rent in many instances.
Of course other ratepayers make up the difference for subsidizing low-income households, as well as absorbing the cost of other social welfare programs extended to the needy and the poor. Some claim that amount would only average 2 – 3% monthly for ratepayers to subsidize low income households. That would be on top of the alleged 9% increase ratepayers would fork over to allow KUB to go into the cable TV business.
There are between 3 – 5 cable providers in Knox County already, all of whom employ hundreds of local residents who work to feed their families and pay taxes. The cable companies have also invested literally hundreds of millions of dollars in the area to provide cable service. In fact, the cable companies in Tennessee pay the highest rate for using utility poles in the country. KUB gets $36 from every cable provider in the area while companies pay $7 in Georgia, for instance. The cable companies pay that fee whether a consumer uses the service or not.
Justin Biggs, Knox County Commissioner-At-Large, has sent an open letter urging KUB to put on the brakes and have a little more public conversation. Gabe Bolas wrote a reply trying to refute much of what Biggs said. First of all, there is no emergency requiring KUB to get into the cable business, so I fail to see why it would hurt anything for there to be public hearings throughout those areas served by KUB, including Grainger and Union counties. The city council recently held a special workshop to discuss an appropriation of $300,000 for nursery school personnel to take the place of police officers inside of city schools. Keep in mind, KUB is proposing to spend much more than half a billion dollars of ratepayers’ money, yet there was no council workshop.
Many people like streaming TV, which is the trend in the country currently. Cable television is becoming increasingly like Ruth’s Chris restaurant – – – things are served and priced ala carte. As far as I can tell, there’s been little to no conversation asking why KUB wants to invest so much money into what appears to be a diminishing industry. And again, KUB proposes to spend $700 of your utility payments to provide broadband for 2% of the area it serves without the consent of a majority of the people in that area. Once upon a time, that was called taxation without representation.
Giving a monopoly – – – and that is what KUB is – – – the right to compete with private companies who already provide the service is never good for competition. Now we can all sit back and watch our KUB bills increase exponentially over the next few years.

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