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The town boards of Mooresville and Davidson voted separately Monday night to go ahead with the proposed $39 million purchase of the local cable TV and internet system. The towns now have 120 days to buy the system, which they plan to rename MI-Connection.

The votes came amid mixed opinions from local residents and after two years of legal battles, legislative lobbying and bankruptcy court delays. Critics had argued that the towns should stay out of the cable business and that government ownership would bring the risk of failure, which ultimately could cost taxpayers.

But supporters like the idea of maintaining local ownership of the system, and control over pricing, customer service and capital spending.

That’s something most other municipalities in North Carolina no longer have. In the past, towns signed local franchise agreements with cable companies, and through that process had some leverage over pricing and service. But the North Carolina legislature last year deregulated video, taking away local franchising authority.

Davidson Mayor Randy Kincaid, Cornelius Mayor Gary Knox, and Mooresville Mayor Bill Thunberg said in a joint statement after the votes: “MI-Connection will provide a new tool for economic development, stable prices, upgraded technology and excellent customer service for citizens. We are excited about this project and look forward to the towns working together.”

Davidson commissioner Evan Webster said the meeting went as expected. “The vote came out pretty much the way we expected it to come out. We’ve been working closely over the past year and we’ll continue to work closely when we buy the system,” he said.

Board member and mayoral candidate John Woods said, “It’s been a long hard two years, filled with a lot of legal wrangling, the likes of which we hardly ever see and hopefully won’t see again, some political pressure and a lot of misinformation spread by some parties to further confuse the issue. I’m pleased that we’re through that period and that we can now enter into an implementation period … to develop a system that our citizens will be very proud of.”

Mr. Woods said the towns’ decision to buy the cable system would “enhance our greater community’s abilities to provide high quality, lower cost and very high technology service to all citizens, with a focus on internet capacities for all people, and to create economic development opportunities in attracting businesses who need or demand high-technology fiber-optic broadband communications capabilities.”

TIME WARNER ON THE SIDELINES

The decision will be a disappointment to Time Warner Cable, which along with Comcast had bought most of the nationwide assets of former operator, bankrupt Adelphia Communications. Time Warner has been operating the system temporarily while the towns decided whether to buy.

About 10,200 subscribers are affected by the vote. They include those in Mooresville and Davidson, as well as former Adelphia subscribers in Cornelius and unincorporated parts of Mecklenburg County. Cornelius has opted to transfer customers to the consortium, but not to participate in it. Huntersville and Troutman also had considered joining the consortium, but dropped out this spring and voted to transfer their subscribers to Time Warner.

Update: Mecklenburg County commissioners on Tuesday, Aug. 14, voted in favor of transferring cable TV subscribers in unincorporated areas of the county to MI-Connection.

Davidson and Mooresville will form a two-town consortium to buy and own the system. They will not operate the system themselves, but plan to hire a third-party cable and internet management company, Bristol Virginia Utilities, or BVU.

The towns will pay $3,810 per subscriber, which equates to about $39 million based on the most recent subscriber figure of 10,200 provided by the towns.

Mooresville will borrow $75 million to pay both for the purchase and technology upgrades over the next few years, in the form of Certificates of Participation. The towns have arranged the financing through Bank of America. Davidson would owe about $40 million of the total. The towns’ business plan expects the debt to be repaid entirely through revenues from the system, which at the moment remains highly profitable according to officials.

DAVIDSON VOTE 4-0

Davidson’s board voted 4-0 in favor of the purchase, with board member Bruce McMillen absent. Mooresville’s board tied 3-3, but a yes vote from Mayor Thunberg broke the tie.

Cornelius board members also attended the joint meeting, and voted 4-1 to transfer their subscribers to the consortium.

Mooresville also approved spending $1.5 million in earnest money, which amounts to a sort of down-payment for the system, which is to be paid to the Adelphia bankruptcy court trustee.

CITIZENS NAMED TO BOARD

The motion Davidson’s board approved was made by Mr. Woods. It included resolutions to approve the purchase, to approve an interlocal agreement with Mooresville to buy and own the system, and to appoint three Davidson residents to the proposed consortium’s board of directors.

Appointed were Mr. Webster and Davidson residents Ken Essex and Ron Steen. Mr. Essex is a Charlotte lawyer, Vietnam veteran and Davidson College graduate. Mr. Steen is a vice president with Charlotte-based real estate firm Lincoln Harris.

Mooresville has not yet announced its nominees to the board. Davidson and Mooresville will each have two permanent voting members. A fifth voting member will rotate between the two towns.

Cornelius also will have a non-voting seat on the board. Cornelius commissioners appointed Town Manager Anthony Roberts as their interim representative.

The new board will meet for the first time Wednesday, Aug. 15, after Mecklenburg County votes Tuesday on transferring its customers to the system. (See county commission agenda and attachments.)

DOCUMENTS

Updated fact sheet on the MI-Connection, issued by the towns Aug. 13 (requires Adobe Reader software).

PREVIOUS STORIES

Read previous coverage of the cable purchase proposal, including the pros and cons.

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