The Fibrant Autopsy Part I: How We Arrived at This Point

Posted on April 13, 2018

Todd Paris, RFP Contributor and Salisbury Attorney

The Fibrant Autopsy Part I: How We Arrived at This Point

♦ “We found her in the gutter.  She’d been disemboweled.” from “The Strange Case of Jack the Ripper”

Back around 2009 Salisbury City Council Susan Kluttz, Paul Woodson, Bill Burgin, Pete Kennedy and Mark Lewis voted to build Salisbury its own “fiber to the home” fiber optic broadband network that would provide television, internet and phone service to the masses. Around $33 million dollars was borrowed with the consent of the NC Local Government Commission and additional sums were scooped out Salisbury’s water and sewer fund. They decided to wire the whole city instead of expanding gradually to neighborhoods where the service was wanted.

At the same time, the Republican controlled legislature, following an old precept from NC law that the state government and its subdivisions (like cities and counties) should not compete with private businesses, decided to pass a broadband bill. This bill would make it impossible for cities to do build their own networks hence forth. It became very important for cities like Wilson and Salisbury, already financially committed, to get a statutory exemption from this bill.

These cities had some leverage. In NC, cities are not home rule cities, but exist as subdivisions of the state.  As such, the state is eventually liable for the city’s debts should a city fail. After the 1920’s great depression, the legislature established the Local Government Commission under the State Treasurer, which must approve all county and municipal borrowing and is empowered to take over a city or county if it gets itself into financial trouble. This is why NC cities do not go bankrupt like Detroit and generally have good bond ratings as there is state oversight and their debts are guaranteed by the full faith and credit of the entire state. By the time the broadband bill passed, Salisbury was able to obtain one of the few municipal exemptions from the bill, however, the bill limited Salisbury’s network to its city limits and the city limits of neighboring towns attached to our water and sewer utility. I have often wondered if the decision to wire the whole city at once was specifically designed to make the project too big to fail and thus, win this exemption. Claims have been made that Fibrant, being deprived of the ability to expand into the county, has been prevented from succeeding. This is false. Fibrant’s interim director, Evans Ballard has admitted publically that there is no money to fund that expansion. We have not even been able to expand into our neighboring vassal towns like Spencer even though we have been invited and it is allowed by law. If the broadband bill were repealed tomorrow, there is no, absolutely no, money to pay for any geographic expansion whatsoever.

Fibrant’s birth continued to be troubled. Running out of time and money, the contractor, erecting the network, apparently underbid the project and wanted more money.  Salisbury had squandered all it had. There was no more money.  A Civil Superior Court lawsuit against the contractor is pending. It appears that a “run and gun” took place where the network was completed as quickly and cheaply as possible and in violation of the National Electric Safety Code and moreover without many of the proper pole permits and easements that needed to be acquired. The work is secured by a performance bond. The contractor has claimed that someone unnamed, working for the city had apparent authority and authorized the run and gun. The name of that person and the potential cost of the repairs have never been publically released. If a judge or jury finds that the contractor had the right to relay on that person’s apparent authority the city may get nothing from the suit. I note that Duke Power would have been the major Plaintiff and pole owner in any suit over the lack of pole attachment agreements and violation of the safety code, but has not acted. Perhaps this might explain Salisbury’s quiet acquiescence over all the Chromium 6 in our drinking water that was reported elsewhere.

During the last election cycle, City Manager Lane Bailey refused to tell new council candidates how much it’s going to cost to fix the network, claiming an exemption under NC law for matters under litigation. Current City Council Member David Post says they have a low and a high figure but declines to reveal either. There will be more on that later.

A Treasury of Fibrant Articles Appearing in the Rowan Free Press:

The next installment The Fibrant Autopsy Part II: How Fibrant does not work financially

Posted in: Articles