Editorial: Vote ‘yes’ on Fibrant lease
Salisbury residents have a pivotal referendum on this spring’s primary ballot — yes or no on the lease of the city’s Fibrant broadband system to Hotwire Communications. A “yes” vote would bring a needed step forward for the city and its taxpayers.
Hindsight is 20/20, as former Mayor Paul Woodson reminded a Post reporter last year while talking about Fibrant. The city of Salisbury decided to enter the “fiber to the home” business without knowing a major recession lurked over the horizon, or that the General Assembly would effectively wall off the city from growing the system.
Those and other factors have made Fibrant more costly to taxpayers than anyone expected. Instead of providing much-needed new revenue to the city, Fibrant has required some $3 million a year from the city’s general fund. That, in turn, has constrained city spending — and caused tax increases — as Salisbury beefed up the Police Department, equipped the Fire Department and carried out other important city services.
Leasing the system to Hotwire would help the city begin to bring annual expenses down and continue to pay off the $30 million-plus debt incurred to build Fibrant.
Under the 20-year lease, the city would retain ownership of the system. Hotwire would pay the city quarterly rent as well as 30 percent of the Salisbury system’s internet revenue, 10 percent of its video revenue and 10 percent of its voice revenue, with minimum guarantees in place.
It’s not all gravy. The city would have to refinance its Fibrant debt under this arrangement and pay higher interest — a step requiring approval from the state’s Local Government Commission. Salisbury is still expected to come out ahead.
“Expected” is the key word. Faulty projections — or projections that failed to anticipate all possibilities — are what got Salisbury in this predicament to begin with. Without this lease agreement, though, a person could predict with great confidence that Fibrant would continue to be a drain on the city and a hindrance to improving city services.
Walking away from Fibrant is not an option for City Council. The city has too much invested in the system and too much debt to pay.
As always, there are trade-offs. The Fibrant name would go away; the system would become part of Hotwire’s Fision service. Fibrant email addresses would be phased out and the call center would no longer be based in Salisbury. Fibrant employees would be guaranteed jobs only for the rest of this year; the city would try to place them in other jobs.
On the plus side, in addition to helping city finances, Hotwire plans to improve the TV service, add video service, offer the ability to view programs on a tablet and offer a low-price option for low-income households that meet requirements.
The time for second-guessing Salisbury’s foray into fiber optics is long past. The decision before city voters now is whether to OK a lease agreement that begins to solve the financial problem Fibrant has created for the city and that brings improvements to the system’s offerings and marketing. Best of all, local customers continue to have broadband service whose high speed is the envy of many communities. This is a plus for Salisbury that needs to be promoted far and wide. Vote “yes” on the Fibrant lease referendum — yes to taking positive action for Salisbury.