Lately, the Tennessee Broadband Accessibility Act is putting a small dent in business at the Humboldt-based InfoStructure, Inc, said owner John Warmath.
Using taxpayer money, state officials enacted the law in 2017 to provide broadband Internet to Tennessee’s unserved areas.
The Trenton-based Gibson EMC electric co-op has used this law to take more than 50 of Warmath’s customers, and he expects it will take at least 200 more.
On top of that, Warmath said Gibson EMC’s CEO Dan Rodamaker makes an excessive amount of money.
Gibson EMC is based out of Trenton, according to its website.
Warmath said the territories he services, Medina and Three Way, have had broadband since 2002. He also said his family has owned the business for exactly 50 years.
“They (Gibson EMC) are overbuilding us. They’re not hurting us too bad, but they spend a ton of members’ money to create something they already had access to,” Warmath said.
“Our entire footprint is rural. We have done business at the lowest prices. They, however, are spending their resources here in Humboldt and Medina and Three Way, where people already had access (to broadband) and not any resources at the places where we don’t have access. So, it flies in the face of the whole purpose of the Broadband Accessibility Act.”
Warmath told The Star he is currently in a lawsuit against Gibson EMC because of its alleged predatory pricing strategies.
When reached for comment, Gibson EMC spokeswoman Rita Alexander said the lawsuit limits what she can say.
“There are numerous consumer protections in the legislation (the Broadband Accessibility Act), including a requirement that electric co-ops entering the retail broadband business make broadband service available to ALL of their consumers,” Alexander said in an emailed statement.
To date, Gibson EMC has 886 active internet subscribers. Alexander said co-op officials hope to connect 3,400 members by the end of this year.
Warmath, meanwhile, said his business caters to about 4,500 customers.
According to Gibson EMC’s most recently available 990, filed in 2016, and available on Guidestar.org, Gibson paid Rodamaker $319,096 in compensation plus $178,580 in other compensation. That totals nearly $500,000.
When asked about Rodamaker’s salary, Alexander said Gibson EMC “pays competitive, market based wages to all employees, including our President and CEO and senior leaders.”
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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to [email protected].
I would probably benefit financially by the co-op providing broadband instead of paying AT&T…. BUT I have been totally against this action. Too many options available to promote the co-ops from jumping into this industry. But no one listens to me – including the leaders of my co-op.