2023 6 20 City Council Agenda Packet

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Fiber Division Summary

The fiber division is small in scope with minimal assets and revenues. However, TVA requires
that we account for it as a stand-alone division, outside of power operations. This is directly
opposed to the state of Tennessee, which requires that we include the fiber division within the

power division for our annual audit.

We are in a time of transition within the fiber division. With the successful roll-out of our pilot
project we have gained experience in how to successfully install, bill, and provide customer
support for fiber service at the household level. The opportunity to provide this service has
also given us a few “lessons learned” into the types of equipment we need to install and how to
improve our ability to assist a customer who is having issues with their service. The pilot
project has been successful on a number of levels and we have learned a lot that is being
applied to our newest fiber project that was made possible with funding provided by McMinn

County.

Although AUB was unsuccessful in our application to the state of Tennessee for funds via the
American Rescue Plan Act for fiber infrastructure, McMinn County was awarded funds that
were designated for the purpose of expanding fiber services to communities that are
underserved. We were fortunate enough to partner with the county to provide services to the
Pond Hill and Nonaburg communities that we had targeted in our original grant application.
This project is the next step in terms of AUB expanding to a larger group of customers. This is
an opportunity for us to learn how to better build out infrastructure into the customer’s home
on a much larger scale and apply our “lessons learned” from our pilot project to better serve

these customers.

As in previous years, with a division this small we will incur many unknowns as we move
forward into the new fiscal year. In fact, we do not even provide a capital budget or five-year
projections for the division because of the size, uncertainty, and nature of our business at this
time. Hopefully, by FY 2025, we should have a large enough customer base and revenue
model to allow for annual expansion of the infrastructure and growing the business.

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