Plans by Bowling Green Municipal Utilities to lay a $3 million fiber-optic loop around the city concern a competitor who fears that BGMU customers may end up paying higher water rates to finance the companys venture into telecommunications. The city commission voted last month to authorize BGMU to make unlimited funds transfers from its water system accounts to start the new venture, a sign that the cost for the project will be borne by water customers, said H.B. Clark, regional manager for BellSouth, which currently is one of five or six providers of high-speed Internet access in Bowling Green. We welcome competition in the telecommunications business, Clark said. But I dont want to end up paying higher water rates so they can get into fiber-optic communications or pizza delivery or whatever. The reason for linking the project to BGMUs water system is that the water systems monitoring stations need upgrades more than the ones that monitor the electrical side of the companys operations, said BGMU Marketing Director Mark Shults. The loop would be used to link the companys monitoring stations for its electrical and water systems, which currently use an outdated microwave transmission system, Shults said. Such improvements are not unusual for the company and often are necessary, he said. For example, if we thought we had a substation that needed to be upgraded because of a reliability issue, we would make that investment, he said. Thats exactly what were doing here. Shults said the possibility exists of an increase in water rates as a result of the project. While improving the monitoring system is part of the project, BGMU also plans to use the loop to provide high-speed Internet access to certain facilities, including city offices and Western Kentucky Universitys new Innovation and Commercialization Center, which will be located in the old Bowling Green Mall property, Shults said. Eventually, BGMU also may provide Internet access to industrial or other customers, he said. There are some customers who need this and we plan to democratize the fiber system and allow people who are on the loop to have access, Shults said. We think it will spur business growth in Bowling Green. A study done about six years ago indicated that high-speed Internet access was needed in many areas of Bowling Green and could encourage industries to locate here, City Manager Chuck Coates said in presenting the BGMU plan to the city commission. However, Clark said the study is outdated and that the companies that have begun providing access in the city are more than sufficient to meet the needs of existing and future customers. If anything, its overkill, he said. Weve got companies leasing their lines to other companies because they cant find enough customers to fill all the bandwidth they have now. Clarks primary concern is that the venture is being financed from BGMUs water department, he said. Hopkinsville Electric Services Internet service provider, launched in 1998, has lost an average of $30,000 a month since going online and is not expected to begin turning a profit until 2003, an article in last weeks Kentucky New Era stated. However, that venture was financed by a bond issue, not by drawing funds from the companys existing coffers, helping to level the playing field between the municipal utility and private companies, Clark said. BellSouth and HES have healthy competitions in data services in that market, and the separate business and costs that HES keep allows for as level a playing field as can be expected, he said. However, the first priority for BGMUs system is not to turn a profit but to improve the companys service, Shults said.