by Michael Lowrey
The bad idea that is a town or city running a broadband service keeps on taking. As Barry Smith of Carolina Journal reports:
One North Carolina city borrowed millions from its water and sewer fund to support its municipal broadband service and paid the price with a downgraded bond rating. This spring, Moody’s downgraded Salisbury’s bond rating, citing debts by its Fibrant broadband service.
Moody’s notes that Salisbury borrowed $7.6 million from its water and sewer fund to support the Fibrant fiberoptic network, resulting in “a narrowed but still acceptable cash position for the water and sewer fund.”
The report also notes that while Salisbury is making 1 percent interest payments on the borrowed funds, it isn’t repaying the principal.
You can read the rest of the article here.