Editor’s note: This article is the last in a series examining the creation, operations, effects of, future of and other matters related to the city’s fiber optic network known as Fibrant. 

SALISBURY — Fibrant is the exception, not the rule, when it comes to municipal fiber optic networks, says the consultant who wrote the city’s original business plan for the service.

Roughly 10 years ago, the company — Uptown Services — projected Salisbury’s Fiber to the Home project, now known as Fibrant, could be profitable within five years. In fact, it was profitable within the first five years — but only on on paper.

A recent analysis by city staff found its profitability coincided with a cost-saving project during the tenure of former City Manager Doug Paris. In addition to reducing duplication, Paris’ project placed Fibrant-related expenses in other areas of the city budget.

Fibrant also hasn’t reached its subscriber goal of 4,800. The city initially hoped to reach that number by 2015.

Meanwhile, in eastern North Carolina, a municipal fiber optic network run by the city of Wilson is profitable, according to the city’s budget and staff members. Known by the name Greenlight, the network’s finances function slightly differently because Wilson owns an electric utility. The service has roughly 9,000 subscribers — a 40 percent market share — said general manager Will Aycock.

Wilson and Salisbury both claim the title “gigabit city,” but one seems to be doing a better job than the other, said Dave Stockton of Uptown Services.

“It’s really a tale of two cities,” Stockton said. “I certainly understand that Salisbury has had challenges, but they are the exception not the rule.”

Earlier this year, Salisbury started trying to find a buyer, manager or lessee for Fibrant. Now, the options have been narrowed to a lease or outside management.

In contrast, Wilson expands its service as money is available. Greenlight’s service area is legally defined as Wilson County, but the network can also operate in the Edgecombe County town of Pinetops until a private provider offers identical services.

Pioneers

If the private sector had been willing to extend fiber optic lines to homes and businesses in Wilson, the city wouldn’t have built Greenlight, City Manager Grant Goings told the Salisbury Post in 2008. By building the network, the city chose to control its own destiny, Goings said.

The Salisbury City Council visited Wilson in 2008 before unanimously voting to proceed with its more than $30 million fiber optic network, funded by revenue bonds. The goals included creating an economic development tool, creating competition in a market largely ruled by Time Warner Cable and putting Salisbury on the leading edge of technology.

Wilson used $28 million in revenue bonds to fund initial construction of its service. Aycock, who has worked for Greenlight since its launch, said reasons for the creation of Wilson’s fiber optic network included enhancing the delivery of city services, improving the quality of life and supporting the economic health of the community.

Today, city staff and community members say Greenlight has affected Wilson in a positive way.

“We have always viewed our community broadband system as a long-term investment,” Goings said in an emailed statement. “The motivations were never driven by how much profit could be made. Our council determined that fiber-to-the-home infrastructure was important for the future of our community, and it was affirmed that the private providers had zero interest in building such a system in Wilson.”

Salisbury Mayor Karen Alexander made a similar argument for Fibrant. She compared it to building roads or highways. In an interview, Alexander was largely positive about the creation of the service.

“Could we still do the kind of commerce we do today if we only had a little, two-lane road?” she asked. “Think about what (Interstate 85) has meant to the connection between Salisbury and the region. It’s the same with the very small dial-up lines that we used to have.”

A political problem?

Three other council members interviewed were not as positive as Alexander. Councilman David Post says Fibrant is a “great product” but the city hasn’t marketed it right. Mayor Pro Tem Maggie Blackwell and Councilman Brian Miller called Fibrant a “mixed bag.”

Councilman Kenny Hardin declined to comment about Fibrant on two separate occasions for two different stories.

Current and former council members listed many of the same reasons — the recession, meddling by the state legislature and trends such as “cord cutting” — that Fibrant hasn’t fulfilled initial dreams. However, Fibrant and Greenlight have both been subjected to those same factors.

Salisbury resident Roy Bentley offered a different factor as a negative for Fibrant.

“One of the biggest problems is that support has basically been a game of political football throughout its entire existence, and they let Fibrant become politicized,” he said. “It wasn’t just a thing that Salisbury did. Most cities don’t deal with their water and sewer being politicized either, and Salisbury does. So, maybe it’s not just Fibrant.”

More than one person interviewed by the Salisbury Post cited poverty as a factor in Fibrant’s slow growth toward target subscriber numbers. However, Wilson has a higher poverty rate than Salisbury, according to the U.S. Census. Wilson’s poverty rate is 26 percent while Salisbury’s is 23 percent.

Stockton doesn’t buy the poverty-focused argument. Today, cable TV and internet are not luxuries, he said.

“From all the research we do, we see consistently very few households without internet, even the lowest-income households,” he said. “I think, in the case of Salisbury, that’s not why things aren’t going well.”

City officials in Wilson have used Greenlight to develop programs to aid those in poverty or with low incomes.

The digital divide

For $10 per month, the Wilson County Housing Authority offers tenants 60-megabit-per-second internet speeds, said the authority’s president and CEO, Kelly Vick. Roughly half of the authority’s households subscribe to the service, Vick said.

That speed — 60 mbps — is faster than the lowest tiers of internet service for Fibrant and Greenlight. It’s much cheaper too.

Vick said cheap, quality internet service provides the housing authority’s tenants with access to services such as online GED courses and other online education or job training services.

Aycock said partnership helps bridge the “digital divide” — economic and social gaps between people with easy access to the internet and those who don’t have it.

The city and housing authority announced the partnership at an October news conference that featured former Housing and Urban Development Secretary Julian Castro. Speaking to the Wilson Times in October, Castro said Wilson is “investing in the education of its youth” and “providing ladders of opportunity for parents.”

Post said Salisbury should enact similar programs to take full advantage of Fibrant. The added cost of providing free internet in Salisbury’s West End neighborhood would be roughly $50,000, he estimated. To provide internet service to several low-income neighborhoods, Post said, the added cost would be $200,000.

“I mean, why don’t we do that, and then (schoolchildren) don’t have to go to a hot spot that closes at 9 o’clock,” he said. “Why don’t we light up these streets? It’s a public utility. It would be a win-win.”

Another program in Wilson allows people to prepay for the internet service they want, Aycock said.

Other innovative applications of Greenlight mentioned by Aycock include the police department creating three-dimensional models of car accident scenes and live-streaming athletic games.

‘Generational knowledge’

In more than one area, Fibrant and Greenlight differ financially.

Some examples: Salisbury took on more initial debt to build its fiber optic system; there are roughly 20 more Greenlight employees than Fibrant employees; and the total Greenlight budget is several million dollars more than Fibrant’s.

For the current year, Greenlight’s budget also doesn’t show a projected transfer from the city’s general fund. Fibrant’s budget shows a $3.2 million transfer.

Although Fibrant’s finances have riled some in Salisbury, the N.C. Treasurer’s Office said it has not noticed any actions not in compliance with generally accepted accounting practices.

Assistant City Manager John Sofley said other municipal fiber optic networks, such as Greenlight, intermingle broadband expenses with revenues from city-owned electric systems. But it’s not that simple, Aycock said.

Wilson’s electric distribution system was started more than 100 years ago. Aycock and city spokeswoman Rebecca Agner said the city developed a general knowledge of running a utility over that time.

“There was very little new that we were doing when we launched (Greenlight),” Aycock said.

Launched, in part, to support the city’s internal operations, Greenlight and Wilson’s electric utility are inextricably intertwined, he said.

“I don’t know that we would be operating a broadband network if we were not operating an electric utility,” he said.

Smart investment?

Have municipal fiber optic networks been a wise investment? That depends on whom you ask.

Private providers say no. One telecommunications industry professional who spoke to the Salisbury Post called the networks “miserable failures.” The networks have resulted in “failure after failure,” he said.

The conservative-leaning John Locke Foundation also sits in the “no” column.

“They have really been a drain on those local government budgets and put the local taxpayers on the hook for the cost,” said Becki Gray, senior vice president at the foundation.

Asked about finances, Wilson City Manager Goings compared broadband networks to another kind of infrastructure project.

“I suspect a financial analysis of our water and sewer systems in the early days of their deployments would not have been favorable, but they were necessary investments for our city’s future,” he said in an emailed statement.

Stockton said there’s no question that municipal fiber optic networks have been “a great success.”

“When you take a step back, it’s like any other business startup,” he said. “Some do a lot better than others, sometimes they fail, but overall they have a good track record. If you look at the facts and don’t try to cherry-pick, there’s no question they have a solid track record overall.”

Contact reporter Josh Bergeron at 704-797-4246.