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Economic Study Or EPB Propaganda?

October 22, 2015

Blue and red fibre optical cablesA recent University of Chattanooga study claimed the government-owned broadband network operated by Chattanooga’s Electric Power Board (EPB) had added $1.3 billion in economic activity to the region and 5,200 jobs and therefore made up for its $111 million cost to federal taxpayers.

Several government-owned broadband experts and taxpayer advocates told Watchdog.Org the economic claims made in the report, which was written by University of Chattanooga Finance Professor Bento Lobo, are speculative at best and deliberately misleading at worst.

The Beacon Center’s Mark Cunningham told Watchdog.Org that the report was “more like a brochure for EPB” than “an actual study.” Cunningham also noted that Professor Lobo included several caveats in his study. Cunningham explained, “I read the methodology, and I was quite frankly shocked they would even put out something like this. … They basically said there is a lack of data to support their conclusions …”

When asked whether he knew “whether new people would have come to Chattanooga regardless of EPB broadband,” Professor Lobo did not say whether he did or did not, but instead said,” other people are looking into that.” Lobo also said he wasn’t sure if the individuals that he claimed had moved to Chattanooga as a result of EPB’s broadband network would ultimately stay.

The Beacon Center’s Cunningham also pointed out that it doesn’t appear Professor Lobo talked to anyone that is skeptical of the network.

University of Colorado Professor Ronald Rizzuto agreed with Cunningham. Professor Rizzuto called Lobo’s study “ridiculous.” He told Watchdog.Org, “To say that all these jobs and all this investment in Chattanooga was due to EPB is a statement beyond the facts of the case.”

Professor Lobo and EPB have a long history. Watchdog.Org notes that the Electric Power Board had “previously hired Lobo to write four similar studies.”