Do you understand the significance of being able to borrow against the revenue of the local electric utility? This is what that means: EPB goes to the market and says "hey guys, I need like $200M to make some internet and I can raise the electric rates of all the citizens of Chattanooga to whatever it takes in order to pay it back." There is almost no risk for the lender and if the project were to fail it would be $200M down the drain for the citizens of Chattanooga (at least all the ones that buy electricity, which is probably most of them). Why would you even need lobbyists at that point?
I'm not try to be a cheerleader for the big telcos, but I think there are valid financial reasons cities shouldn't fund these kinds of projects this way.
EPB's fiber network wasn't funded this way. Either state law or charter (can't remember which) forbade them from using electric utility revenue to build out the fiber network. They issued bonds instead under a new EPB Fiber Optics startup to finance the build-out.
The inverse is not true, however. Last year, EPB's electrical division saw a shortfall in revenue due to electricity usage being lower than anticipated. This could have actually resulted in a rate hike to EPB electrical customers, but because EPB Fiber Optics was already profitable, they were able to use fiber revenue to avert an electrical rate increase.
You are wrong. I dug out the documentation associated with the 2008 $220M issuance when I was looking at this yesterday. It is a muni bond issued by the city of Chattanooga "payable solely from the revenues of the electric system" and the project described is "to construct a fiber optic broadband network."
Isn't the same true of any telco when it goes off for a loan to cover construction costs for new infrastructure in a tiny market area? Everyone who doesn't benefit has to pay the cost if it fails in the form of higher prices across the market. It's not like you're going to stop needing a phone or cable any time soon...
I'm not try to be a cheerleader for the big telcos, but I think there are valid financial reasons cities shouldn't fund these kinds of projects this way.