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Fibrant: Another Cautionary Tale

January 26, 2017

North Carolina FlagAccording to Light Reading senior editor Mari Silbey, Salisbury, N.C.’s municipal internet service provider, Fibrant, has hit “new speed bumps.”

Specifically, the system is not taking in anywhere near what is needed to pay down its debt. According to a news report in the Salisbury Post, “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.”

As a result, the Salisbury City Council now “has agreed to look at options to offload Fibrant operations either through a leasing or management deal with third parties, or through the complete sale of the utility.”

Light Reading’s Silbey said the city “so far has little to show for its investment” in Fibrant. Indeed, in an editorial the Salisbury Post suggested the city has failed to find a market for its 10 gigabit offering. One of the reasons Fibrant has failed to take hold, Light Reading speculates, is that it relied on “all fiber” when “it’s becoming increasingly clear now that hybrid networks combining fiber and wireless technologies may make the most economic sense.”

In its editorial, the Salisbury Post argued, “While Fibrant may have seemed like a worthwhile endeavor before Salisbury installed fiber-optic lines across the city, it should now be evaluated based on the enormous financial burden it’s created without enough economic benefits that make the project worthwhile.” The editorial board concludes, “Fibrant may have resulted in ancillary benefits, such as lower prices from private providers” but “those benefits … are not enough to justify the $3 million in yearly debt service.”

Light Reading’s Silbey concludes that Fibrant “may be a cautionary tale for municipal broadband.”

It would seem so.