Community members say sending out RFPs for Fibrant is right move

Published 12:10 am Sunday, January 22, 2017

By Amanda Raymond

SALISBURY — Sending out requests for proposals may not be a cure-all for Fibrant’s debt, but community members said it was a step in the right direction.

Salisbury City Council authorized Lane Bailey, city manager, to send out requests for proposals for Fibrant, the city’s fiber optic network, at a meeting on Tuesday.

Bailey has been working with CTC Technology and Energy, an engineering and business consulting company, to develop a plan for the network’s future.

The proposals will go out on Jan. 24 and responses will be due back on March 10. The council will be able to discuss the different options at its retreat in March.

The latest audit for the city showed that the net cash flow for Fibrant was almost $520,000, while the debt service payments, totaling about $3 million, and budgeted transfers from the general fund put the Fibrant fund in a deficit net position of about $10.4 million since it started offering service.

Mayor Karen Alexander said she had been working with the city manager to develop a strategy for Fibrant since the week she was sworn into office. Once the city got all of Fibrant’s financial information into one place to determine where the utility was financially, they could take next steps.

Alexander said getting Fibrant’s financials in order took almost a year.

Now the city must determine the best option to reduce Fibrant’s strain on the city’s resources, Alexander said.

“Our challenge is how to make it work productively for our city so that our citizens benefit,” she said.

Council member David Post, who has been working with Bailey and the city staff to develop a plan for Fibrant, said the city has a variety of options.

The city could work with a private sector partner that would operate and maintain Fibrant while the city keeps ownership, a private sector partner could purchase, run and maintain the utility or the city could lease the utility to a private sector provider that would operate and maintain it.

There are two more options, but Post said they were unlikely to happen. An entity could provide services to Fibrant while the city owned, operated and maintained the utility or the city could operate an open access infrastructure, which would allow multiple providers to provide service over Fibrant’s network.

Post said there could also be options that are mixtures of the ones above.

“We’re willing to look at any alternative options as well,” he said.

Post said those who had bad experiences with Fibrant when it was first released ended up being turned off to the utility completely, even though the service is better now than ever.

Jason Walser was one of those early subscribers who experienced some of the early problems. He said there wasn’t a redundant back-up line to make sure customers had continuous access to the Internet and he lost service a “handful of times.”

“But I have continued to subscribe in my office and have added my home to the service, and it has performed perfectly and with superior speed to my prior provider,” Walser said in an email.

Walser said he is glad the city is doing something to address Fibrant’s problems. He said the city won’t be able to afford significant new projects until they figure out a way to reduce Fibrant’s debt.

“I commend the city on exploring all options for dealing with the future of Fibrant,” he said. “Regardless of what proposals the city receives, we need to increase subscribership. When the service had glitches and political baggage six years ago, I understood why our citizenry did not subscribe. Today, it is hard to understand why Salisbury citizens who are already subscribing to other cable, phone and Internet providers are not willing to give it a try since they are going to pay more in taxes by not keeping their monthly payments local.”

Greg Alcorn has spoken before the council during public comment multiple times, asking the council to put Fibrant on every agenda and work to solve its debt issues.

“We’ve got to do something. Status quo is not going to get it,” he said.

Alcorn said Fibrant is a good service and it is important for citizens to support it by subscribing. A public-private partnership may help increase the community’s involvement, he said.

Because of Fibrant’s early problems, Alcorn said it faces an uphill battle in terms of branding and marketing, but with a good plan the city can begin to turn things around.

He said from a financial standpoint, he could not think of anything more important than Fibrant.

“We just need more people to get behind that,” he said.

Rex Boner was willing to get behind Fibrant even before he finished his move to Salisbury.

He said he heard good things about Fibrant from neighbors and it was “financially attractive.”

“We just wanted to get it as quickly as we could,” he said.

He said he has heard about Fibrant’s early service problems, but he hasn’t experienced any problems since subscribing.

Boner said he glad that the city is looking into all of the options for Fibrant and hopes they can find a way to market the service more aggressively.

“Salisbury seems to be at an important crossroads with Fibrant but any outcome, whether city owned, city leased or city sold, could be extremely successful,” he said in an email. “This success will only be further confirmation of the foresight of city leaders who seized the moment and installed this national leading Internet service for the benefit of Salisbury citizens and businesses.”

David Post said one of the biggest misconceptions in the community about Fibrant is that if the city just turns it off, all of the financial problems will go away.

“And that’s not the case,” he said. Even if Fibrant is turned off or sold, the city will still owe the debt service.

What the city has to determine next is what success will look like, Post said. Does that mean cutting down the debt from $3 million per year to $1 million? Will the city have to break even for it to be considered a success?

Post said what that success will look like will hopefully be determined through the RFP process.

Post said it is possible that the city won’t be able to find a partner that will be able to eliminate the utility’s debt or only low offers will come in. At that point, Post said the city may have to decide to sell it or get serious about running it.

Post has repeatedly said that if the city does continue to run Fibrant, they need to form an advisory board to run the utility like a business.

“I think that’s a little scary to the city because they’re responsible for it, but I think it’s a bridge we may have to cross,” Post said. “I hope not. I hope we find a partner that we feel comfortable with and that can do this for us.”

He said opening a storefront for Fibrant in downtown Salisbury, where people could try out its service and even hold events like video game competitions, could showcase Fibrant’s capabilities.

He also hopes the city will get help from local legislators so that they can expand Fibrant’s service beyond Salisbury’s city limits.

Mayor Alexander said she agreed with Post — what success could look like is currently unknown. There are technicalities that Salisbury and other cities are working through when it comes with public-private partnerships.

Alexander said the ultimate goal is to minimize the negatives and maximize the benefits for citizens.

“I would just ask that our community allow us to go through this process and do it with patience,” she said.

Contact reporter Amanda Raymond at 704-797-4222.