The Real Story Behind Chattanooga’s ‘Gig City’ Resurgence

The second popular appeal promotes high-speed internet as a silver bullet of sorts, the lone variable necessary in propelling small- to medium-sized cities toward prosperity. I live in such a place, or at least a place being sold as such: Chattanooga, Tennessee, also known as Gig City, for internet speeds of up to 10 gigabits per second supplied by the publicly owned Electric Power Board (EPB).

There is little doubt that EPB’s internet service has delivered numerous benefits to the city and its 176,000 inhabitants and attracted attention from national and international media. Chattanooga has become the poster child for the internet expansion movement, with headlines dedicated to it like this one from Vice calling it, “The City That Was Saved by the Internet.”

President Obama highlighted Chattanooga in the runup to his 2015 State of the Union Address, touting it as an example of why the FCC should limit restrictions on municipal internet providers like EPB so they can expand their service footprints. Even Mark Zuckerberg’s sister, Randi, tested a culinary concept here by opening a “tech driven pop-up dining experience” in July because, she says, Chattanooga is one of the “coolest cities that is attracting a real innovative tech startup community.” With all this attention, it is safe to assume Chattanooga is enjoying the limelight like never before—except for, of course, the time Glenn Miller had much of the world foot-tapping to his chart-topping hit, “Chattanooga Choo Choo.”

Yet there is something substantially amiss in the way the city’s most recent history is being narrated. It’s that high-speed internet was not actually the catalyst that “saved” the city. It’s really the other way around: The success of publicly financed high-speed internet in Chattanooga is the result of decades of collective civic laboring by a people committed to municipal revitalization. This is a massively important distinction that citizens and elected leaders everywhere should take into account when considering whether to sink large sums of taxpayer money into broadband projects.

To better understand Chattanooga’s broadband success, we must go back almost a half-century. Reader beware: Considerable typespace will pass before the internet is mentioned again, a testament to how much work went into tilling Chattanooga’s civic soil so that broadband’s benefits could be fully realized.

Dirtiest City in America Reborn

Old-timers say businessmen would tote an extra starched shirt to work in the mornings. Chattanooga’s air was so filthy from smokestacks belching soot that white-collar professionals would have to change shirts because the ones they donned to work in the morning would be speckled gray by lunch. Car drivers, too, they say, would use their headlights at midday, driving through low-hanging clouds of smog.

Chattanooga was such an environmental tragedy, that in 1969 Walter Cronkite reported that it was “the dirtiest city in America.” Longtime locals will tell you that distinction served as a low point. Things didn’t get much better in the near term, though. As the 20th century progressed, factories in Chattanooga—as they did in many towns across America—started closing. By the late 1970s, Tennessee’s fourth-largest city bore the hallmarks of a post-industrial wasteland: a stagnate economy, outmigration, and the very visible scars of shuttered manufacturing parks littering the urban landscape.

From those dark days, Chattanooga was reborn. Beginning in the 1980s, civic leaders and charitable foundations, led by Coca-Cola bottling heir John T. “Jack” Lupton II, convened a series of community visioning exercises called Vision 2000, drawing together residents, foundations, non-profit organizations, and other local institutions to chart an escape route for the city out of its post-industrial funk.

Chattanooga’s natural surroundings played a leading role in this planning since it is such a beautiful place. Lookout Mountain’s lush slopes loom over the skyline, and the Tennessee River quietly meanders through the heart of the city. Today, paddleboarders can belly up to a bar after a quick stroll from the water, while hikers and climbers can get deep in the woods just minutes after leaving work.

Three projects anchored Chattanooga’s initial urban renewal initiative: the 1.1 million-gallon Tennessee Aquarium, situated just steps from the river; the Tennessee Riverwalk, a 13-mile waterside walking and biking path; and the reopening of the Walnut Street Bridge, a pedestrian walkway connecting the city core to the town’s North Shore and public Coolidge Park. Throughout the 1990s and into the new millennium, attractions continued to sprout under successive mayoral administrations, including that of now-U.S. Sen. Bob Corker. Those works included a children’s museum, a new minor league baseball stadium, and a charming art district, as well as numerous boutique retail shops and restaurants.

The town, thanks to a hyperactive Chamber of Commerce and Convention and Visitors Bureau, soon earned the reputation as a desirable weekend destination for middle class families in the region. Today, small businesses, hoteliers, and the city’s coffers continue to enjoy the benefits of a sustained boom that started with the Aquarium’s 1992 ribbon-cutting, with annual tourism receipts topping $1 billion.

Renaissance 2.0

Leadership from other midsize towns began using Chattanooga as a case study for their own renewal projects. No matter how nice the uptick in tourism continues to be, though, its economic benefits have always been tightly concentrated. Ice cream shops and hotel stays cannot drive an entire local economy, and for most people living outside the immediate downtown area, revitalization was little more than pride-supplying window dressing.

By the mid-2000s Chattanooga’s dynamism lulled. The orchestrators of the first Scenic City rejuvenation pondered their next steps. Making Chattanooga great would require deeper substance than an aesthetic overhaul. Besides, the come-see-our-quaint-town tourist market is highly competitive and fairly saturated in the southeast. Savannah, Georgia, Charleston, South Carolina; and Asheville, North Carolina, have long been good at that game.

So, back to the drawing board. This time, the Vision 2000 future-gazing and planning sessions of the 1980s were carried forward by CreateHere, a non-profit organization launched in 2007 to support the arts and entrepreneurship.

The next few years witnessed a flurry of creative energy in Chattanooga as initiatives emerged to cultivate and retain area talent. They bore names like ArtsMove, MakeWork, SpringBoard, and InnovateHere — faux compound words apparently being all the rage. What’s more, in 2008 the city and regional economy scored an unprecedented victory when Volkswagen chose Chattanooga as the site of a new assembly plant. Today the plant employs roughly 3,450 workers building Passat sedans and Atlas sport utility vehicles.

Enter the Gig

Now, back to the internet. For Chattanooga’s entrepreneurial scene, 2010 was a watershed year.Three eventually complementary developments emerged that year that would help turn the city into an innovation hub. The first was when the Company Lab (CO.LAB), a nonprofit business accelerator, grabbed the CreateHere baton to spur more startup successes. The second was the founding of Lamp Post Group, a venture capital outfit funded by the earnings of three young entrepreneurs who’d earned millions of dollars in the logistics industry. And the third was when EPB began pumping out a gig’s worth of internet speed through its fiber optic network.

Chattanooga’s fiber optic overhaul came with a $330 million pricetag, $111 million of which was provided by a federal stimulus grant. The city borrowed the balance. Though pricey, the benefits of running fiber through power lines are numerous. For instance, EPB can almost instantly identify power outages anywhere in its service area — including the Volkswagen plant — and direct resources to fix them. Gone are the days of relying on customer calls to learn of outages.

But Chattanooga hasn’t garnered international attention for its swift power-outage corrections. Helpful, yes. Sexy, no. Instead, outside eyes have focused on what’s become known as “the gig,” speedy internet service flowing through that fiber. At the time of its unveiling, the fiber service offered the fastest, most pervasive internet speeds in the world, delivering a full gigabit per second to both homes and businesses. For reference, that’s roughly 100 times faster than most broadband offerings.

Like music? With a gig, you can grow your library by 100 songs in just three seconds. What about movies? You’ll have to be more patient and wait a whopping seven seconds for an entire feature film to download. Today, EPB offers speeds 10 times that fast.

What to do with all that connectivity? It would be fair to characterize the initial community reaction to the gig as confused elation. Initially, nearly no one—aside from video gamers—really knew exactly what to make of the super-fast internet service, though almost everyone had a hunch it was special. Especially since it was the fastest in the United States at the time.

The most important thing about the gig at first was that Chattanooga had what no one else did. Knowing that other cities would soon catch up with Chattanooga’s technology, the city sprinted out a rebrand from the Scenic City to Gig City, and the entities responsible for the gaining acclaim during the initial renaissance of the 1990s recalibrated their messaging and fired off sweeping public relations salvos touting the glories of EPB’s gigabit services.

The Chicken or the Egg?

Ask any salesperson what’s easier to sell, a concept or a tangible product, and they’ll nearly always pick the latter.

So, in subsequent years, when regional—then national, then international—media sent reporters to investigate how a smallish Tennessee town scored the fastest internet possible, those media members were taken on well-curated tours of an already mature startup sceneEverywhere those reporters went, they heard a chorus of voices singing the wonders of the gig.

All this makes sense. Coming out of the Great Recession, cities of all sizes competed aggressively for fresh investments, and it’s a no-brainer for one particular city to highlight any advantage it has over its peers. Play the cards you’ve got, after all. Soon, articles began surfacing with headlines reading “Fast Internet Is Chattanooga’s New Locomotive” (New York Times), and “How Startups Thrive in Chattanooga” (Entrepreneur).

Chattanooga feature articles spawned more Chattanooga features, and when locals doubled down on the tech-focused messaging —playing the card they had—a predictable result occurred: Almost all pre-gig civic toiling, the work that tilled the soil for the gig’s successes, was filtered to the back of the narrative, and eventually, as Vice told everyone, the city became one that was “saved by the internet.” Not by people. Not by civic organizations. Not by foundations. Not by non-profits. Not by public-private partnerships.

A casual observer couldn’t be blamed if they assumed the gig switch was flipped one day, and voila, all this innovation up and happened.

Tempering Gig Expectations

Since Chattanooga is thought of as the gold standard in publicly financed broadband, an example promoted by pro-broadband advocates in locales nationwide, this is a troubling take on the Gig City experience. The costs of creating a fiber network are quite steep, and if leaders in other towns believe accessing fast internet is all that’s keeping their town from becoming some version of Silicon Valley, they will be sadly surprised—not to mention deeply in debt—to find that is most likely not the case.

Yes, Chattanooga is now home to a growing roster of tech-oriented, venture-backed companies including Skuid, whose customers can create made-to-order web applications without writing code, and Bellhops, a national moving company that connects movers to jobs through an Uber-like phone app. But the city didn’t lure those and other such businesses, not to mention the jobs that came with them, merely by running fiber through power lines.

In 2016, the Kauffman Foundation detailed what is arguably the most comprehensive account of why Chattanooga’s broadband experiment has worked. One of the paper’s authors, Yasuyuki Motoyama, put it well when he wrote that the city “organized and mobilized its assets to orient itself to entrepreneurial initiatives,” showing “what a small-size city can do when factions from different sectors focus on a common goal and collaborate to achieve that goal.”

That Kauffman piece should be required reading for anyone deliberating over municipal broadband, consumed in tandem with a 2017 report published by Christopher S. Yoo and Timothy Pfenninger, researchers at the University of Pennsylvania. Yoo and Pfenninger analyzed 20 municipal fiber projects in the U.S., and of that group only nine generated positive cash flows. Nine might not sound too bad to the optimistic ear; however only two of those nine projects, according to the study, will make enough “cash to be on track to pay off the debt incurred within the estimated useful life of a broadband network, which is typically projected to be 30 to 40 years.” That means just 10 percent of those municipal broadband endeavors will be debt free by the time they require substantial—likely publicly financed—upgrades.

Without doubt, the good times are rolling in Chattanooga. Yet anyone wishing to replicate these positive fortunes would be well-served to begin their study of the town’s successes long before the gig’s 2010 rollout. The story here is not that fast internet alone thrust a modest-sized city to previously inconceivable achievements, though some media outlets continue to push that narrative. The Daily Beast is the most recent offender on that front with its July article, “Chattanooga Has Its Own Broadband—Why Doesn’t Every City?”

The real story is that a town and its people had long been committed to renewal and when they got ahold of a wonderful new asset, they already had the civic infrastructure in place to facilitate big wins. While outnumbered by Vice and Daily Beast-style reporting, this account is thankfully making its rounds. Last week, the Montgomery Advertiser published a 3,500(ish) word account exploring Chattanooga’s innovation economy, properly placing the gig in the context of a long-running community overhaul.

It’s not difficult to envision a day in the not-too-distant future when sufficiently performing internet is no longer an exclusive resource. Technologies tend to democratize, sometimes rapidly. For those who want to beat the curve and make municipal investments in broadband now, they need to be aware that it’s not as simple as pushing the gig button and waiting on TechCrunch reporters to show up.

David Allen Martin works in Chattanooga’s start-up community. His opinion pieces are published weekly by the Times Free Press.