Fibrant can’t match cable company specials

By Emily Ford

eford@salisburypost.com

Competition for Internet, cable TV and phone subscribers is heating up as the city prepares to launch Fibrant, a publicly owned fiber optic utility that will provide all three services.

While Time Warner Cable’s published rates are 7 to 10 percent higher than Fibrant’s, “in most cases, that’s not what you’re going to pay,” said Dan Ballister, director of communications for Time Warner Cable Charlotte.

Ballister said his company’s rate card is the “retail price we are legally required to post” and compared it to the price on the back of a hotel room door.

“We always work with customers to meet their needs and budget,” he said.

The cable giant regularly offers specials and recently announced a new bundle including Internet, cable and phone for $99 per month for one year. That’s about $45 cheaper than Fibrant’s comparable package, Deluxe.

The new special was not a direct answer to Fibrant’s recently published rates, Ballister said, and the company views Fibrant as “just another player in the competitive field.”

Fibrant marketing director Len Clark acknowledges the city’s fledgling utility can’t compete with Time Warner’s special deals.

“We can’t afford it,” he said.

But he said Fibrant’s significantly faster Internet and “over the top” customer service will win subscribers who might have to pay a little more for a while.

After one year, rates for people who sign up for Time Warner’s $99 special will revert to the standard rates, Ballister said.

The $99 special includes Road Runner High Speed Online with a download speed of 7 megabits per second and upload speed of .384 Mbps. For a limited time, subscribers can upgrade for free to Road Runner Turbo, boosting their Internet speed to 10 Mbps for downloads and .512 Mbps for uploads.

Fibrant’s standard Internet speed of 15 Mbps for both downloads and uploads is twice as fast as Road Runner High Speed Online and 50 percent faster than Road Runner Turbo. Fibrant customers can go faster — 25 Mbps up and down — for an additional $20 per month.

Both Time Warner’s $99 special and Fibrant’s comparable package offer about 150 TV channels. High definition is free for Time Warner subscribers, while Fibrant customers must pay more.

Time Warner’s package does not include a digital video recorder. Fibrant’s does.

However, people who sign up for the $99 Time Warner special this month get Showtime for free, Ballister said. Next month, it could be a free DVR, he said.

Time Warner’s phone service offered in the $99 deal has about a dozen features, including the popular caller ID that appears on the TV screen. Fibrant’s phone service offers 17 calling features.

Time Warner is still surprised by “municipal overbuilds,” or city-owned fiber optic networks like Fibrant in Salisbury and Greenlight in Wilson, Ballister said.

“It’s just interesting that during these economic times, when city and county budgets are being cut back, that they would want to spend millions of dollars providing services that are already out there,” Ballister said.

Salisbury borrowed $33 million to launch Fibrant.

Cities have an unfair advantage in offering communication services, Ballister said.

“We’re all for competition, as long as people are on a level playing field,” he said.

Cities pay no property or income taxes. They can operate the utility at a loss and cross-subsidize from other areas of government, Ballister said.

“They can level taxes on citizens to recover their operating costs,” he said.

Fibrant is expected to operate at a loss for three years and have a positive cash flow by year four. It will take longer to make a profit, Clark said.

Eventually, Fibrant is supposed to generate revenue for the city.

Cities in the fiber optic business also can hike the fees their competitors must pay to get access to their subscribers, Ballister said.

“They are the gatekeepers to rights of way and pole attachments,” he said.

The company has no specific examples of fee hikes to hurt Time Warner, but “these are valid concerns that exist right now,” Ballister said.

Time Warner led the push for a state law to curb municipal broadband projects like Fibrant. Salisbury fought the bill, which died this summer in the N.C. legislature.

Time Warner has “spent an immense amount of money in Raleigh on lobbyists and contributions trying to cripple existing community broadband systems and stop small towns and rural areas from getting broadband access,” said Salisbury Assistant City Manager Doug Paris.

Salisbury asked Time Warner to invest in new fiber optic technology for the city, Paris said.

“They refused,” he said.

There are large areas where residents have no access to high-speed broadband, including portions of downtown, Paris said.

“It has been holding back small business development for years,” he said.

The city decided to “invest in our community with an infrastructure that has a proven track record when it comes to economic development,” Paris said.

But Fibrant already is a disappointment to one local business owner.

Even though Fibrant’s bandwidth is nearly unlimited, the city is no different than Time Warner in the way both providers are partitioning the Internet, said Michael Young, who owns Downtown Graphics Network.

“Unlike cable, which has limited bandwidth and sells Internet speed like a commodity, expectations for Fibrant were for one Internet speed and one speed only, as fast as fiber optic would go,” Young said in an e-mail to the Post.

“Instead, just like Time Warner, it is partitioning its speed as if bandwidth were a commodity. It is not.”

Potential Fibrant subscribers expected “unbridled Internet speed,” said Young, who acknowledged he will sign up for Fibrant despite his disappointment.

“The price is no better, the product will be better, the service can’t help but be better,” he said. “That is 2 out of 3 ... good enough for government.”

Another business owner said he can’t wait to sign up for Fibrant. Unable to install a satellite dish in his downtown location, Kirk Knapp of Tastebuds Coffee and Tea said he feels “held hostage by Time Warner.”

“Time Warner has the worst customer service I have ever dealt with,” Knapp said in an e-mail to the Post.

Knapp, who lives and works downtown, said his service is not reliable and he experiences screen freezes, intermittent drops of broadcasts and complete losses of service for an hour or more.

“Fibrant may have these same kind of issues, however I can actually go to the source to deal personally with someone who is vested in the community, not spend two hours on the phone and never solve the problem as I do with TWC,” he said.

“Even if pricing is higher, I would make the change. Price is important, but quality and service is tantamount.”

Contact Emily Ford at 704-797-4264.