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Mediacom Lawyers Slow Competition With Court Time, Resources


When big corporate incumbent providers fear a hint of competition from a new entrant, they pull out all the stops to quash any potential threat. One of the first lines of offense involves the courts. Iowa City now leases its fiber to Cedar Rapids based ImOn and to stop it, Mediacom is reprocessing an old argument. It didn't work the first time, but they are going for it anyway; this is another example of how cable companies try to hobble competitors; just stalling can be a "win."

A Lawsuit In Search Of An Offense

Mediacom has a franchise agreement with Iowa City to offer cable television services and it also provides subscribers the option to purchase Internet access and telephone services. As most of our readers are attuned to these matters, you probably already understand that just any old cable TV provider can’t come into Iowa City and set up shop. State and local law require them to obtain a franchise agreement, which often includes additional obligations in exchange for access to a community’s potential customer base.

According to a 2015 Gazette article, Mediacom provides annual payments for use of the public right-of-way, operates a local office, and provides free basic cable services to local schools and government buildings. These types of commitments are commonplace as part of franchise agreements and are small sacrifices compared to the potential revenue available to Mediacom.

ImOn started offering Internet access and phone services to Iowa City downtown businesses in January but the company does not offer cable TV services like it does in other Iowa municipalities. ImOn doesn't have a franchise agreement with Iowa City but Mediacom says that it should. They argue that, because ImOn has built a system capable of offering video service, it should also have to obtain a franchise agreement.


In August, U.S. District Court Judge Charles R. Wolle dismissed the case, stating in a nutshell:

"Although ImOn is constructing in Iowa City a system that may become capable of delivering cable programming, ImOn is not now delivering cable programming. Therefore, ImOn is not presently required to seek a cable franchise.” 

Blast From The Past

This isn’t the first time this argument has echoed off the walls of a courtroom. Back in 2005, the U.S. Court of Appeals for the Eighth Circuit dismissed a similar case between Time Warner Cable (TWC) and the city of North Kansas City. The situation was similar, except the city had not yet decided whether to invest in the required head end to provide video over the fiber-optic network they wanted to deploy. At the time, a Missouri law required a vote if the community planned to build and own a system in order to offer cable TV services. TWC wanted the use the court for a pre-emptive strike: to bar the city from using the network for video services stating that they could not do so because they had never held a vote.

TWC's argument revolved around the question of whether or not the city owned or operated a cable television facility, which was in violation of state law. Since the network was not offering cable services and there was no head end yet - in fact they didn't even know if they wanted to invest in one - what really mattered was whether or not North Kansas City owned a "cable TV facility" without prior voter approval. In other words, were they building a network that was capable of offering cable TV services?

As in Iowa City, the court determined that the issue was not “ripe.” From the opinion:

It is factually undisputed that the City's fiber-optic network is not connected to the required head end facility to receive such signals nor is there any plan to acquire it. Thus, Time Warner's statutory claim rests on a contingent future event:  the ownership or operation of a cable-television facility by the City;  therefore, Time Warner's claim that a vote is required under Missouri law is not ripe in that the City does not currently own or operate a cable-television facility because the planned fiber-optic network will not be capable of transmitting cable-television signals and because the City recognizes that in order for it to provide cable-television services a public vote would be required.


Let's not put the cart before the horse.

Jeff Janssen, vice president of sales and marketing for ImOn said in December that if the provider’s plans change, they will take the necessary steps:

“Franchise agreements are all around cable TV,” he said. “Once we decide, or if we decided to offer cable TV in Iowa City, we would get that franchise agreement, we are required to.”

Every Tool In The Anti-Competitive Toolbox

Mediacom has approximately 4,500 employees and, like the other large corporate providers, they have a highly qualified regiment of attorneys. Not likely they missed the similarities between the North Kansas City and Iowa City cases, but there’s more than one way to win.

Traditionally, winning means presenting the facts and proving to the judge that they fit into the law and that your interpretation of how they work with the law is more correct than your opponent's. For companies like Mediacom and TWC, however, winning can also mean delaying your opponents project to drive up their costs or cool subscriber interest. In other words, going after the fruit before it is "ripe."

Winning may also mean forcing the other side to give up and walk away by driving up their legal costs or making them lose progress when construction is delayed and subscribers lose confidence in the project.

Big incumbents have become masters at using the courts for sabotage schemes, no matter how frivolous the perceived infringement. They sue or threaten to sue over poles, attempts to streamline, and what services a city can and cannot offer. The state legislatures that have passed laws restricting local authority have only helped massive telecoms and cable companies abuse the courts by providing vehicles for their lawsuits. At the same time, they have forced local governments to waste citizen funds and stalled Internet access, typically to the communities most desperate for it.

You can read the Order for Summary Judgement, the Order Amending the Order (which appears to correct a typographical error), and the Notice of Appeal for more.

Discussing (Ranting) Consolidation - Community Broadband Bits Episode 209

In celebration of Independence Day, we are focused this week on consolidation and dependence. At the Institute for Local Self-Reliance, we are very focused on independence and believe that the consolidation in the telecommunications industry threatens the independence of communities. We doubt that Comcast or AT&T executives could locate most of the communities they serve on a blank map - and that impacts their investment decisions that threaten the future of communities.

So Lisa Gonzalez and I talk about consolidation in the wake of Google buying Webpass and UC2B's partner iTV-3 selling out to Countrywide Broadband. And we talk about why Westminster's model of public-private partnership is preferable to that of UC2B.

We also discuss where consolidation may not be harmful and how the FCC's order approving the Charter takeover of Time Warner Cable will actually result in much more consolidation rather than new competition.

Read the transcript from this show here.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 18 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Fifes and Drums of the Old Barracks for the music, licensed using Creative Commons. The song is "Cork Hornpipe."

Bar Harbor Votes Down Funding For Study...This Time

On June 7th, Bar Harbor residents voted against funding the first $50,000 of a $100,000 engineering study for a fiber network to connect municipal facilities. A contentious 47-57 vote at the annual town meeting erased the Capital Improvement Program (CIP) from the annual budget, postponing progress on potential publicly owned Internet infrastructure. 

Decision Leaves Locals Stranded

The town is still clinging to hopes that it can arrange a new agreement with incumbent provider Charter Communications, who owns the majority of fiber on Mount Desert Island, where the city is located. The franchise agreement, inherited by Charter Communications when it merged with Time Warner Cable, expired in 2014. Negotiations on a new agreement appeared to have stalled when Charter wanted to begin charging the town access to incumbent fiber. In the prior agreement, municipal use of fiber to municipal facilities was a service included without an additional fee.

Bar Harbor officials are finding themselves in the same position as other communities similarly situated. After years of dependence on incumbent infrastructure connecting city buildings as part of franchise agreements, incumbents are now trying to squeeze as much as possible out of that dependence. Time Warner Cable tried the same strategy in Martin County, Florida, but the community invested in its own fiber-optic network and is now saving millions.

Apparently, Bar Harbor's leadership was split over the decision to include the funds for the study in the budget. During the budget process, the Warrant Committee took several close votes on whether or not to include the funding. Ultimately, the entire community decided that they prefer to maintain a balance in their CIP fund.

Mount Desert Islander reported on the June 7th vote

“'A majority of the council thinks it’s prudent to have some money in the account in case things change with our agreement," [Councilor] Stivers said.

Preliminary Study Lighting the Way

A 2015 preliminary study evaluated the possibility of Bar Harbor building a fast, affordable, and reliable Fiber-to-the-Premises (FTTP) network of its own. 

“Stakeholders in the Town of Bar Harbor feel that their current Internet capabilities are inadequate to meet changing business demands. There are onerous cost burdens associated with subscribing to the services one of the incumbent carriers for the Town, residents, and businesses alike. Such ongoing costs are significant, and can be avoided with the right broadband investment initially, creating a solution where the Town is not dependent upon a powerful carrier with prohibitive prices.”

The study proposed a two-phase approach, which included beginning with connectivity for anchor institutions and later connecting residents and businesses. It also recommended the engineering study to better estimate costs.  

Clear Skies on the Horizon?

The franchise agreement between the community and Charter Communications is still unresolved but according to Seth Libby of the Warrant Committee, the city is part of a consortium of municipalities in the area that are working collectively to re-negotiate their franchise agreements.

Despite the disappointing vote, optimism persists. When we spoke to a local official over the phone, he was confident that the funding for the engineering study would pass in the coming fiscal year.

New Braunfels Takes Next Step In Texas

At a recent City Council meeting, New Braunfels council members approved $57,000 in funding for Phase II of a study to explore the feasibility of constructing a city-owned fiber network. The city's Industrial Development Corporation (4B Board), which helps guide the city's economic development initiatives, previously recommended moving on to this next phase of the project. 

Because state laws in Texas prevent municipalities from offering retail telecommunications services, New Braunfels must advance carefully. The city is proceeding with the consultant's recommendation to pursue a public-private partnership (PPP) for the proposed network. With this second phase of the study, the consultant will help the city release a Request for Proposals (RFP) to solicit interest from would-be private Internet Service Providers (ISP) for the city-owned network.

Clarification from Christopher Mitchell: In Texas, the term telecommunications does not include Internet service. Communities cannot offer telephone service but are able to offer Internet only type services.

Some Findings from Phase I of the Feasibility Study

At a February 4B Board meeting, the New Braunfels Assistant City Manager Kristi Aday noted that the proposed network would cost the city somewhere in the range of $3 - $5 million. A major factor in determining the cost of the network, she said, is whether to use underground fiber for the network or to go with an aerial approach, using poles owned by New Braunfels Utilities.

The full feasibility study, presented at a special joint meeting between the City Council and the 4B Board in March, also reports the results of a survey in which 132 businesses in New Braunfels answered questions about their connectivity needs. According to the results of the survey, 78 percent of city businesses get their Internet service from AT&T DSL or coaxial cable Internet access from Time Warner Cable. Because both technologies rely on copper, many local businesses cannot obtain the high-quality Internet access required for daily operations.

Among the companies who responded, a full 81 percent expressed dissatisfaction with the limited speed and unreliability of their current Internet access. Consultants found that while 15 of the 5,600 companies in New Braunfels have paid to deploy fiber connections to their offices, more than 99 percent of the city’s businesses can't afford such an investment.

How Are We Supposed To Work This Way?

It was just a year ago when at the Texas Legislative Conference in New Braunfels, panelists were not able to take questions from remote attendees because the Internet connection at the Civic Convention Center hit a glitch. At the time, discussions of municipal Internet infrastructure had already started and local leaders understood the urgency:

“We have Texans from across the state here ... and we were dead in the water until 10 a.m.,” [Greater New Braunfels Chamber of Commerce President Michael] Meek said. “That just heightens my awareness, and the awareness of others in the city, on why we’re doing this broadband initiative in town.”

He said the problem was with “the major Internet providers, which we continue to have problems with, whether it be the civic center or Wurstfest. Any business in town will tell you the same thing. That’s one of the reasons why the 4B Board and the chamber are jumping on top of this broadband initiative.”

Southern Tier Network Continues Fiber Expansion in Upstate New York

The Southern Tier Network (STN), a community-owned dark fiber network that spans multiple counties in upstate New York, enables fast, affordable, reliable Internet access in New York’s Southern Tier region. Locally based private Internet service provider Empire Access offers services via the network as it continues to expand.

The Corning Leader reports that Empire Access intends to offer residential Internet access over the STN in the Cities of Corning and Elmira sometime in the next year. 

Empire Access

Empire Access, which offers current customers Internet access, voice, and 200-plus Digital TV channels, is waiting to launch services in Corning and Elmira until after they gain approval from the New York Public Service Commission (NYPSC) to provide digital TV services in these communities. Although the company could begin offering fiber and phone services at any time, the company wants to be able to offer the full bundle of options before they officially launch in Coring and Elmira.

As Stop the Cap! wrote in a June 2015 article about the STN, the business strategy at Empire Access is focused on bringing Internet access to areas of the state where Verizon refuses to go and where Time Warner Cable’s service tops out at 50 Megabits per second (Mbps) download and 5 Mbps upload. For current residential customers, Empire Access offers bundled services about $30 per month on average less than competitors.

In addition Corning and Elmira, Empire Service now provides triple play services via the STN Network to the City of Hornell, the Town of Bath, and the Village of Watkins Glen.

Economic Benefits of the STN

As the Corning Leader notes in their article, some businesses in Elmira and Corning are already getting fiber connectivity via Empire Access and the Southern Tier Network. But when we last wrote about the STN in December of 2015, we quoted Elmira-based business owner Mike Mitchell, who had expressed frustration about the lack of fast and affordable Internet services for Elmira businesses:

“It's very, very slow. It's hurting our productivity” Mike Mitchell told the Elmira Star-Gazette last summer. “We hear complaints from our tenants and all the other businesses on this side of the street.”

Thanks to the STN, Mitchell recently told us via email that his building now has a fiber connection and that he expects service to his business in Elmira to be up and running by the end of March.

Albany, New York Studying Internet Access Needs

The city of Albany, New York (pop. 100,000) recently hired a consulting firm to study the high-speed Internet needs of the community, including possibly the municipality building its own fiber optic network.

The study will, among other things, “assess the strengths and weaknesses of Internet access currently available in the city,” according to a city news release

According to Albany officials, an estimated 30 to 50 percent of children in Upstate New York communities live in households that cannot afford broadband service in their homes.

The Albany study will also “investigate the extent of a digital divide in Albany that prevents some residents from getting fast and affordable Internet service at home or elsewhere,” and “recommend a prudent path, including funding opportunities, to ensure the City has a broadband network that is affordable and provides high-speed Internet access for all.”

Albany expects the consultant to complete its work before this summer. The Albany Community Development Agency is contributing $20,000 toward the study with the city pursuing additional funding.  

We asked officials at Albany City Hall if the feasibility study will include the city possibly building its own municipal network.  An official from Albany’s Broadband team responded, “The language in the broadband feasibility study purposely did not include specific solutions.” But, they added, “One of options certainly could be a municipal fiber network.”

Affordable Internet Service a Problem

In a January 22, 2016 press release, Albany Mayor Kathy Sheehan said: 

 “Whether you’re a student or a business owner, we live in a world where high speed connections are essential to success. This study will provide the lay of the land of broadband in Albany and outline how we can move broadband service forward in a cost-efficient and timely manner, making sure we bridge any digital divide that prevents residents, especially schoolchildren, from getting affordable and fast broadband access.”

Study Follows Working Group Initiative 

The city’s study comes in the aftermath of work from Albany’s Broadband Initiative Working Group, which is comprised of representatives from the Albany Public Library, the Downtown and Central Ave BIDS, the City School District of Albany, Green Tech Charter School, the Albany Housing Authority, the Albany Promise, and the Center for Technology in Government at the University at Albany, as well as business leaders, according to the city. 

Councilman Still Seeking Commission

Despite the new feasibility study, Albany Councilman Judd Krasher told us he is still pursuing his ordinance proposal to form a city commission comprised of residents whose specific charge would be studying the feasibility of the municipality building its own high-speed Internet network. Krasher contended Mayor Sheehan’s Working Group really hasn’t given much consideration to a municipal built and owned network. 


“I believe that Internet access is a necessity for people and not a privilege,” Krasher said. “For many people, it (Internet access) is out of reach.” 

Krasher suggested Albany might want to participate with one or more neighboring towns to build and operate a joint municipal high-speed Internet network.  His commission proposal comes out of frustration with Albany’s existing Internet service.

“Time Warner has a monopoly,” Krasher said.  “I don’t know any of my constituents who are happy with their customer service and pricing. They are not pleased with what they are getting from Time Warner.”

Internet speeds in Albany are also lackluster, with the average download speed just a shade over 20 Megabits per second (Mbps), Krasher said. And there are wide pockets of areas in Albany where upwards of 50 percent of poor residents cannot afford to have any Internet service, he said. In Albany, about 30 percent of the city’s population is black with 8 percent Hispanic and 4 percent Asian. 

Major Gaps Exist in New York’s Internet Service  

This latest news from Albany comes as major gaps persist in high speed Internet access in many parts of New York. Previously, reported that FreeNet, Albany’s free wireless network, received a $625,000 state grant in 2009 earmarked to expand its service. But neither FreeNet nor Time Warner Cable and Verizon, the two biggest providers of broadband service in Albany, provides the fast, affordable, reliable connectivity a municipal fiber-based network could provide. 

We also noted that at hearings last year before the New York State Public Service Commission (PSC), political leaders and consumers from the cities of Poughkeepsie, Buffalo, and Bethlehem expressed particular frustration with Verizon’s unwillingness to build its FIOS (a FTTH) fiber service out to underserved parts of New York. In some cases they asked the state’s Public Service Commission to strengthen regulations and require private companies to bring better Internet service statewide.

Across his state, Gov. Andrew Cuomo has set a goal of bringing broadband to all New Yorkers by 2018.

Solon Set to Save in Ohio: Big Plans for I-Net

Solon, located in Ohio's northeast corner, is looking to save approximately $65,280 per year with a publicly owned fiber institutional network (I-Net). At the January 19 city council, an ordinance authorizing the Director of Finance to request bids for the project passed unanimously recently reported that the city council is considering ditching its contract with Time Warner Cable as the city moves forward with a traffic signal project. The project would require streets to be excavated all over the community, a perfect time to install fiber connecting 8 municipal facilities. The publicly-owned network will connect buildings such as the Solon Senior Center, the Solon Community Center, and three city fire stations. The traffic signal project will cost $5 million and is funded in a large part by a combination of state and federal grants with the city contributing approximately twenty percent of the total cost.

The city will also pay for the I-Net project, an additional $160,000 but will recoup its investment in less than 3 years through savings on telecommunications costs. The city has paid Time Warner Cable to connect the municipal facilities via fiber and provide Internet access since 1990. Solon currently pays $5,440 per month. 

The city's water reclamation plant will not be connected to the new I-Net and will still use the incumbent because, due to its location, extending to the plant would cost another $100,000. The city will continue to pay Time Warner Cable $500 per month to connect the plant.

Work on the project could begin this spring.

Small City Fights Comcast Over Institutional Network

Reports have recently surfaced from The Detroit News and that a town in Michigan is now fighting Comcast over who owns their network.

The Backstory

Fifteen years ago, West Bloomfield, Michigan, population about 65,000, wanted an Institutional Network (I-Net) to connect all the important services, like emergency response, police, fire, and water, with a dedicated high-speed network. The town entered into a franchise agreement in order to share the construction costs with the incumbent cable company, which at the time was MediaOne. According to the township, MediaOne offered to contribute $400,000 to the cost of construction as part of that agreement.

The agreement was transferred to Comcast in 2000; Comcast acquired MediaOne in 2002. MediaOne and successor Comcast have provided "free high-speed bandwidth transport as well as interconnectivity" during the life of the network claims Comcast in a letter submitted to the court. The cable giant also describes the practice as a "benefit not provided by Comcast's competitors" and wants it to stop. The franchise agreement expired on October 1 but was renewed until 2025.

To The Courts

Comcast and the town are now fighting over ownership of the infrastructure. With Comcast demanding new fees, the town is bringing a lawsuit. Comcast, however, maintains that it owns the I-Net that the town uses for all its important communications. The Detroit News reports that the township is coming out swinging:

The township said it is illegal to use public funds for private commercial purposes and insists there was never any reference to a cable company ever retaining ownership of the I-Net and said it has paid all other costs including upgrades and maintenance of the system which is “imperative to public safety operations of the township and will impact the township’s budget which is currently being prepared for 2016.”


The township not only seeks a preliminary and permanent injunction against Comcast, it wants the company’s act declared a “wrongful conversion of township property” and to be awarded three times the actual damages plus costs and attorney fees.

In the past, these agreements made sense to small towns that needed economical internal communications. All across the U.S., towns signed onto franchise agreements with large providers that offered to build I-Nets and supply connectivity.

As original franchise agreements expire, ownership issues and rate changes are popping up. After years of dependency on big corporate providers in an environment where there is little or no competition, communities like West Bloomfield often find themselves at the mercy of companies like Comcast.

What Can Cities Do? Take Control

There’s another way though. Many towns have built their own I-Nets - often with better connectivity and more savings than franchise agreements offer. The infrastructure can be expanded for other public policy programs too, like economic development or residential Internet access. The “Institutional Networks” page is full of stories about communities that have built their own I-Nets. Rather than trusting big corporate providers, towns control their own infrastructure and are better able to predict connectivity costs.

Franchise agreements are expiring across the country. Big corporate providers like Comcast and Time Warner Cable use this strategy to squeeze more dollars from institutional customers. Martin County, Florida, overcame a similar situation when Time Warner Cable tried to extract exorbitant fees as their franchise agreement expired. Rather than pay an increased rate of more than 800 percent, they chose to invest in a publicly owned fiber I-Net. The community is now able to control their costs with fast, affordable, reliable infrastructure that the community can expand. Read more about Martin County in our 2012 Report, Florida Fiber: Martin County Saves Big with Gigabit Network.

Other towns can expect to find themselves in the same situation as West Bloomfield, Michigan. Raising rates and demanding new fees, large providers put profit before the best interests of the community. With these franchise agreements expiring, there’s a chance for cities and towns to take back local control by building their own networks.

The time to act is now. To learn more about what to do at the local level, check out our Community Connectivity Toolkit.

Fibrant Rolls out 10 Gbps, A Look At Salisbury's Challenges in FTTH

Salisbury, North Carolina's Fibrant, now holds the distinction of offering the fastest Internet access in the country. The municipal network is making 10 Gbps symmetrical connectivity available for residents and businesses.

Fibrant's first 10 Gbps customer is Catawba College, a local school that will use the ultra-fast connections for its new Digital Media Creation and Collaboration labs. In a press release Joanna Jasper, Catawba CIO stated:

"By moving to Fibrant's 10 Gbps speeds, the College is in a better position to differentiate itself. We can bring world-class broadband services to our campus community to support the next generation of educational applications."

"The future is all about rich immersive digital media and being able to communicate and collaborate with others in real-time regardless of where people are in time and space."

The city of Salisbury hopes this new standard will set it apart from other North Carolina communities and entice more economic development. From a BizJournals article:

“It helps us differentiate ourselves” among cities and states seeking technology companies, [says Kent Winrich, Director of Broadband and Infrastructure Services]. “It will attract international companies. It’s not sniping businesses from Charlotte.”

Winrich sees Salisbury attracting technology companies that need the bandwidth for real-time connections to clients and suppliers — software developers and data centers, for example.

The network, which already offers gigabit connectivity to businesses and residents for around $100 per month, has attracted several businesses to a community that once struggled with job loss. Mayor Paul Woodson told WFAE that the investment in Fibrant grew out of necessity:

"All we were trying to do was differentiate ourselves from other cities. We lost our mills, we lost our furniture factories. We decided we need to do something to replace the manufacturing the whole country was losing, not just Salisbury, the whole country, so that’s how we got started."

Listen to the entire WFAE story below and check out episode #168 of the Community Broadband Bits podcast for a conversation between Chris and Kent Winrich, Salisbury Director of Broadband and Infrastructure.

Salisbury has had to deal with a variety of challenges, having built the network during the worst economic downturn in 70 years and seeing Time Warner Cable slash its prices to undermine the municipal network. We thought the following background would be helpful.

Salisbury is located in west central North Carolina and home to approximately 34,000 people. In the early 2000s, the community suffered from high unemployment and businesses could not get the connectivity they needed from incumbents. There were key commercial areas in town that had no Internet access at all. Local leaders hoped the network would spur economic development an area that had previously been known for textile and other manufacturing.

Incumbent providers Time Warner Cable (TWC) and AT&T did not see enough profitability to justify upgrades, so community leaders had to take action without them.

seal-north-carolina_0.jpgIn 2005 the city began to investigate the idea of a municipal fiber network. An early survey suggested 30 percent of households would purchase at least one service from the city by the end of year three - TV, telephone, or Internet access. The local community expressed support for the project, including businesses, potential anchor institutions, and residents.

The city issued approximately $29 million in revenue bonds to finance its network deployment in November 2008. At the time of the issue, Moody's rated Salisbury at A-1 and Standard & Poor listed the city as A-plus which are equivalent ratings and considered "investment grade."

As plans moved forward, a series of setbacks delayed deployment and launch. Even though the city reached an agreement with AT&T to place city fiber on the incumbent's poles, preparing the poles took longer than expected. Synchronizing audio and video proved to be a challenge at first due to software glitches and there were also problems with remote controls accompanying set-top boxes. 

Incumbent Time Warner Cable, however, was able to take advantage of its substantial market share and cross subsidize to offer exceptionally low prices in the region. Certainly the stiff competitive prices negatively affected Fibrant's ability to reach its subscription goals.

In 2014, two bond rating agencies, Moody’s and Fitch, downgraded the bond rating for the city, citing financial struggles with the Fibrant network as a major factor in the decision. As Moody’s wrote, the city’s reduced bond rating from Aa2 to A3...

“...primarily incorporates the city's outsized enterprise risk associated with its broadband enterprise (Fibrant), with considerable operating pressure should the Fibrant continue to underperform.” 

Moody's also based its rating on the city's decision to redirect $7.6 million from its sewer and water enterprise fund to support the network. The investor service described the city's situation as "a narrowed but still acceptable cash position for the water & sewer fund."

Moody's decision to downgrade, we should note, came after a decision by Standard & Poor to upgrade, which sheds some light on the fragile and complicated bond rating process.

In 2011, North Carolina was also a battleground for TWC's intense lobbying efforts to block initiatives like Fibrant through state legislation. TWC managed to push through a restrictive bill that negatively impacted municipal networks, including Fibrant, by limiting its ability to expand.

Nevertheless, Fibrant has slowly and steadily added customers bringing subscribership to 3,000 in the summer of 2014 and in December reported that 3,200 customers took Fibrant service. By that time, Fibrant was already offering gigabit service for around $100 per month, having upgraded top tier customers to gigabit symmetrical speeds with no rate increase.

According to Winrich, the switch to even faster speeds was not as difficult as one might expect:

"We changed out our router and realized we could actually bump this up, and be the first city in the world to do it. And we were just scratching our heads going, ‘really, we’re going to be the first ones?’ And we kept checking with everyone we knew, and they said ‘we don’t know of anybody.’ So, we just jumped all over it and it was really very easy to do. Surprisingly easy to do."

Rates will vary but will cost around $400 per month, approximately $100 per month higher than the 2 Gbps residential service recently announced by Comcast. In other words, 25 percent higher for 5 times the speed with the added bonus of reliability from a local provider that cares about the welfare of its community.

An increasing number of communities are considering the benefits of municipal networks and places with 1 Gbps offerings have an even greater advantage. The ability to offer 10 Gbps lets businesses know that Fibrant has an entrepreneurial approach just as their business customers do; Salisbury is positioning itself and the region for the future:

“This whole area could be so vibrant, and Salisbury would be in the center of it,” [Winrich] says.

Orono and Old Town Receive Funding for Fiber in Maine

The Old Town-Orono Fiber Corporation (OTO Fiber), the entity created by the cities of Old Town and Orono in Maine to design, install, maintain and manage a planned fiber network, recently received a grant for $250,000.

The funds, awarded by the Northern Border Regional Commission (NBRC), will help the communities commence their open access network project. According to a statement released by Maine Senators Angus King and Susan Collins, this was one of six awards to Maine communities. The other grants included road, sewer, and other municipally-owned facilities needed to maintain or grow jobs in the northern counties of Maine.

Congress created NBRC in 2008 as a state-federal partnership to encourage job growth in several northern counties of Maine, Vermont, New Hampshire, and New York that experience economic distress. 

In 2014, Old Town and Orono, working with the University of Maine, had been awarded ConnectME funds for the project but the funding was blocked by Time Warner Cable. Those funds were meant to string approximately 4 miles of cable intended for integration into a much larger network to eventually connect to the state's Three Ring Binder network. The ConnectME Authority chose to withhold the funds, based on TWC's argument that this open access network would overbuild potentially 320 subscribers but OTO Fiber vowed to continue and seek funds elsewhere. The funding blocked by TWC amounted to $125,000.

Approximately 7,800 people live in Old Town; Orono is home to a little over 10,000 people and the Unversity of Maine where over 11,000 students attend classes.