According to The Daily Advertiser, Brian Bowman, Wilson’s public affairs manager, is declaring the city’s fiber-optic cable system a success. Built in 2009 and 2010, the system cost $28 million to install and will require $5.6 million annually to operate.
According to the city statements in 2009, the city needs 30 percent of its 21,870 households to subscribe to the system. Even if we were to assume that all of the 5,300 subscribers are households, the current subscriber rate is only about 24 percent. We also have to assume that all of Wilson’s households have computers. Households without computers are unlikely to sign up just for the cable TV and phone services offered by the city. Thus the 30 percent requirement could jump to about 60 percent of the households needed to collect enough revenue to make the system financially viable.
If many of the 5,300 subscribers are businesses, however, the city might be in worse financial trouble. As we showed in our 2009 report, business customers receive lower than market cable rates that result in a cross subsidy from Wilson’s residential customers.
Bowman also says that the predictions of the system’s financial problems leading to tax increases have been proven wrong. Well, it might be too soon to jump to that conclusion. In addition, the city has the ability to use its electricity monopoly to charge electric users to pay for its fiber cable system.
As we stated in our 2009 report:
In fact, Wilson has already used its electricity monopoly to subsidize the fiber-optic system. In 1998, the city used $4 million from the city’s electric utility fund to start the system.
We are not sure if the system will be a success or failure, but we can predict that Wilson’s officials will continue to manipulate the data to justify their decision to get into the fiber-optic cable business. What Wilson’s taxpayers need is an unbiased accounting of all of the finances of this system. Only then can they decide if the decision to enter this rapidly changing telecommunication business was a good one.
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