News: Quick Takes

Salisbury voters approve leasing Fibrant broadband to Hotwire

An overwhelming 81 percent of voters in Salisbury on Tuesday said the city should lease its Fibrant broadband service to Hotwire Communications.

The unofficial vote was 2,602 to 590.

As Carolina Journal reported, the proposed lease would go for 20 years beginning July 1, with Hotwire paying back the city a percentage of its revenue from its internet, video, and phone services.

Fibrant has been a financial drain on Salisbury taxpayers since its construction. Legacy providers AT&T and Time Warner reduced their rates after Fibrant began operations in 2008, which led to the municipal broadband network never meeting subscriber goals of 30 percent of city residents. The shortfall caused the city to borrow money from its water and sewer reserves for operating expenses. The city has been losing about $3 million per year operating Fibrant.

Between the initial bond and the loan from the reserve, Salisbury borrowed around $40 million for Fibrant, and still owes about $32 million. That’s because revenue from Fibrant has been so meager that for many years Salisbury was just paying the interest on the loans and not the principal.

“The Hotwire lease will not reverse Salisbury’s Fibrant situation immediately, but it gets the process going,” says an editorial in the Salisbury Post.