Published 12:00 am Wednesday, December 2, 2009
By Mark Wineka
The city of Salisbury wants fiber in its diet.
More accurately, fiber-optic cable.
Citizens will have a chance Tuesday to say whether they agree with that menu choice when Salisbury City Council holds a public hearing on its $30 million plan to start a new utility.
Simply stated, city officials are highly motivated to provide telephone, cable television and Internet services to businesses, institutions and residences.
And they think they could be operating a fiber-optic system in the black within three years.
No more is cable technology a luxury, Councilman Mark Lewis says.
He contends that what’s available in Salisbury now through other providers is marginally adequate ó not what Salisbury needs to compete in global information technology.
Fiber-optic cable also could be a way, city officials say, to attract young professionals, especially the people expected to come to this area by the thousands for the N.C. Research Campus in Kannapolis.
“If we have any chance of attracting those people,” Technology Services Manager Mike Crowell says, “we have to have something to offer them other than a lake or nightlife.
“The type of people coming to the research center will be scientists and researchers, and bandwith will be major to them.”
The bandwith of fiber-optic cable increases speed and capacity. Crowell says people are becoming more aware that their current cable lines are OK for downloading things off the Internet, but those same connections are inadequate for sending out the pictures, videos and other information.
Fiber optic to their homes and business will provide the upstream bandwidth to support whatever they want to do, plus many other things coming in the future, Crowell says.
But is it worth the risk?
“I’ve been looking at this for two years,” Crowell says. “I’m in the evangelistic stage. It’s not so much a gamble. Bandwidth is what everyone is looking for.”
File sizes are constantly getting larger, and the infrastructure in the ground and on poles is limited, Lewis contends. He also touts the advantage of “local determination.”
“We, as a city of 30,000, can determine what we want on our system, do the modernizations when we want and determine what to put out there,” he says.
Lewis thinks the city also can offer better customer service, a better product and cheaper rates. The city’s research model was based on rates 10 percent lower than Time Warner Cable.
Salisbury would be the second N.C. second city ó Wilson is the first ó to get into the fiber-optic cable business in a big way.
Wilson expects to begin selling its cable services to its residents later this year. Salisbury is at least a year behind Wilson, but it is following a similar process, which has relied on the same consultants.
Salisbury’s new utility would require $30 million to cover the startup and capital funding for the first three years before positive operating revenues are anticipated.
The city’s financial advisors say the enterprise business could be built and operated without any obligation on city taxpayers.
The fiber-optic system would require two 15-year bond issues ó one of slightly more than $15 million this year and one of slightly less than $15 million in 2009.
Financial advisors Davenport & Co. have said Salisbury could have a self-supporting system in which $1 of debt would be covered by $1.25 in revenues.
A cable operation initially would require a 10,000-square-foot operations center and about a dozen employees.
Management Services Director John Sofley says roughly $500,000 would be set aside for marketing in the first three years. He estimates that the city already has spent about $100,000 toward consultants (Uptown Services), engineering studies (Atlantic Engineering) and financial feasibility projections (Davenport).
Atlantic Engineering conducted a “make-ready analysis.”
Crowell says 40 percent of the Duke Energy poles in Salisbury have space for the city’s fiber-optic cable. Another 40 percent have space, but it would require moving some existing lines on the poles.
Twenty percent of the poles would have to be replaced with taller poles, or cables would have to go underground. There are many areas where the new fiber-optic cable would go underground anyway.
A few other cities in North Carolina are in the cable business, including Morganton, Laurinburg and Mooresville and Davidson, which recently combined to purchase a cable system that was already in place when the company went bankrupt.
“Fiber to the Home,” also called “Fiber to the Premise,” is the name often given to what Salisbury wants to do.
Crowell says a cable company today might run fiber-optic cable to a node ó say outside of subdivision of 300 residences. But from the node it runs copper cable to each home.
That copper cable doesn’t have the “upstream bandwidth” people are increasingly needing and definitely will be demanding in the near future, Crowell says.
The incentive for cable companies to replace all their copper cable to homes and business with fiber-optic cable also is not necessarily high, especially in smaller cities such as Salisbury, Crowell says.
Crowell said he hopes residents don’t only view Fiber to the Home in terms of the triple play of services: video, phone and Internet.
“This is a resource that over the next decade we can do so much more with,” he says.
Crowell lists home and business security, the ability for people to have home servers, gaming services, meter reading, digital signs and dependable backup of information as examples.
Parents could set up two-way video communications in their homes so they could watch their babysitters and children while they were away, Crowell says.
Digital signs could be used to issue emergency notifications instantly across Salisbury.
“The sky’s the limit,” Crowell says. “There are all these other things we could do once we get started.”
There are certain areas in the marketplace where government involvement is appropriate, and this is one of them, says Lewis, who served on a committee with Councilman William “Pete” Kennedy that looked closely at the fiber-optic question.
Lewis and Sofley note that fiber-optic cable will go hand-in-hand with wireless technology. It’s not going to be one or the other, they say.
Wireless addresses mobility, while fiber solves speed and capacity issues. Lewis emphasizes again that public ownership could offer a network built to benefit the whole community.
At their February retreat, council members seemed in favor of moving ahead with the project, though they decided then they wanted to have public input, leading to the scheduling of Tuesday’s hearing.
Council meets at 4 p.m. Tuesday at City Hall, 217 S. Main St.
Contact Mark Wineka at 704-797-4263, or email@example.com.