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Salisbury officials: Fiber-optic cable an investment in future

By Mark Wineka
Salisbury Post
WILSON ó In Wilson neighborhoods this summer, residents might be eating grilled hot dogs and having block parties organized around the appearance of a 30-foot-long trailer.
Inside the trailer, they will get a chance to sit at computers and see the speed and capacity offered by fiber-optic cable that the city of Wilson wants to extend to their homes ó either by pole or underground.
Block by block, Wilson will be rolling out its new $28 million “Greenlight” fiber-to-the-home system this year, offering residents, businesses and institutions the chance to subscribe with the city for Internet, video and telephone services.
What’s happening in Wilson now will be taking place in Salisbury within the next two years, maybe sooner.
Other cities in North Carolina are in the cable business, but Wilson and Salisbury are leading the way in building a fiber-optic cable system from scratch.
Their city officials believe they have to provide citizens with increased bandwidth now or face the prospect of seeing their communities fall far behind in what their residents and businesses will be demanding.
“We’re addressing a problem before it’s immediately obvious to the public,” Wilson City Manager Grant Goings said. “You’re investing to prevent a problem. People are used to government reacting to a problem.”
For now, Wilson is the fiber-optic pioneer among municipalities in North Carolina. Last Tuesday, the Salisbury City Council voted 5-0 to proceed with a $30 million startup of a new fiber-optic cable utility, but it’s at least a year behind Wilson in the process.
A day earlier, four members of the Salisbury City Council ó Mayor Pro Tem Paul Woodson and councilmen Bill Burgin, Pete Kennedy and Mark Lewis ó took a field trip to Wilson to see its progress in taking Greenlight public.
They walked through Wilson’s new 9,520-square-foot Greenlight operations center, which included the 1,400-square-foot head-end room. The area houses the electronics that receive television and Internet signals, then routes them to customers.
The Salisbury council members looked through the windows of a computerized Network Operations Center that will allow the 24-hour monitoring of the fiber-optic system. They also stood under the awning and walked inside the Greenlight trailer, which Wilson officials unveiled later in the week at a Chamber of Commerce business expo.
Dathan C. Shows, Wilson’s assistant city manager for broadband and technical services, said every day holds a new challenge, and he warned the Salisbury officials they were in for a huge undertaking.
“But we’re very glad we did it,” he said, “and we think it will pay huge dividends for years to come.”
Greenlight goes live in two weeks when about 100 residents participate in a testing of the services from their homes.
The official Greenlight launch starts in June when the city releases its prices, service packages, available channels and other details it has been guarding from its competitors, which include Time Warner Cable and Embarq.
The city plans a staggered rollout process, looking to make sure that demand won’t overwhelm the contractors installing service.
Already some 220 miles of fiber have been strung pole to pole, and 40 percent of the underground cable has been planted. But the real work of getting fiber to the home involves the installation of cabinets, which are about the size of dormitory refrigerators.
The cabinets will serve 250 to 300 homes. Each fiber extending from a cabinet can serve 32 locations.
More than 100 of these cabinets will be sprouting in Wilson over the next year or so to serve some 25,000 locations.
Both Wilson and Salisbury are relying on revenue bonds to pay for getting into the business and counting on subscriber fees to pay off the debt and actually earn profits. Salisbury has estimated its system would be making money by year four.
Wilson, the 17th largest city in North Carolina, has a population just under 50,000 people and covers about 30 square miles. City officials have been looking at fiber optic cable five or six years. The city installed a “backbone” loop of fiber-optic cable about two years ago to serve its own facilities, so it had a bit of a headstart.
Wilson is building Greenlight with the expectation of having a minimum of 30 percent of the market in two to three years. “I think we’re going to get 30 percent pretty quickly,” Shows said.
Goings told the Salisbury visitors that Wilson may be helping them in taking “the first round of bullets” from competitors. Wilson already has seen the incumbents go to predatory pricing, offering their customers special packages and multi-year contracts to stay with them, according to the city officials.
Goings said fiber-optic cable is coming to the country. The question is, he said, when will existing providers, who pretty much have monopolies in the communities they serve, determine it’s time for smaller communities such as Wilson and Salisbury to get it?
Where will those cities stand on the “to-do list,” he asked.
If Wilson were not one of the first to have fiber to the home, it had a big fear of being one of the last, Goings noted. “That’s what motivates me,” Salisbury Councilman Burgin agreed.
Goings noted that Wilson has a long history of going on its own when it comes to utilities ó out of concerns that private industry would not do it soon enough.
Wilson established its own electric utility in the 1890s and its own natural gas utility in the early 1900s.
“Council doesn’t see this situation as being very different,” Goings said.
Goings acknowledges that competitors have raised questions such as: What business will the city get into next? A grocery store? A car lot?
If the private sector had been willing to extend fiber-optic cable to every home, business and institution in Wilson today, the city would have stepped away, Goings said. But with Greenlight, the city is controlling its own destiny, he said.
Goings, who has been Wilson city manager less than four years, said it took him awhile to find a comfort level with going into the fiber-optic cable business.
One of the turning points for him was when AT&T asked the city for a pole attachment agreement to run fiber-optic cable to BB&T’s three operation centers and downtown office. The banking company employs 2,200 people in Wilson.
When city officials asked whether the fiber-optic cable would be available to anyone else, AT&T said it would not, Goings said. He realized then that the company was trying to take away the public right of way and that fiber-optic cable needed to be available to everyone, Goings said.
“We didn’t want someone hand-selecting where they thought they’d be making the best profit,” he added.
Shows told the Salisbury group to expect the incumbent providers to say they already have fiber-optic cable in place. But in reality it will only be trunk fiber-optic lines, he said.
The most expensive part of a fiber-optic network is the last mile and the last 100 feet to a person’s home, Shows said.
One of the more complex challenges for Greenlight ó and one of the last things Salisbury probably will be able to accomplish, the Wilson officials said ó is programming.
Goings said his dream was to have an “a la carte” cable system in which Wilson would choose the stations it wanted and residents could buy them that way, too. But they have discovered that they couldn’t purchase or sell the programming that way.
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Contact Mark Wineka at 704-797-4263 or mwineka@salisburypost.com

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