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Public hearing to be held on Fibrant lease agreement

Public hearing to be held on Fibrant lease agreement

The Salisbury City Council has scheduled a public hearing on the proposed lease of the city’s Fibrant broadband fiber network. The hearing will begin at 5 p.m. on Tuesday, March 20, in the Council Chambers at City Hall, 217 S. Main St.

The hearing will be for the purpose of providing information to the public concerning the proposed transaction and receiving comments and questions from Salisbury voters. Representatives from Hotwire Communications, the proposed lessee of the Fibrant system, will be present.

The city has been in negotiations with Hotwire since spring 2017, following the issuance of a Request for Proposals (RFP) with respect to the management or ownership of the Fibrant network. The city noted in this RFP its expectation that a commercial provider would be able to continue providing communication services to residential and commercial subscribers in the Fibrant service area and, through expertise and scale economies, reduce the city’s ongoing debt service costs. 

Negotiations between Hotwire and Salisbury are still in progress and full details regarding the proposed contractual arrangements are not complete. City officials expect, however, that the final lease proposal will include the following terms:

  • Hotwire would lease the entire Fibrant system from the City for an initial term of 20 years, with an option to extend for an additional 20 years
  • Hotwire would pay rent to the City based on a percentage of gross revenues received by Hotwire in providing cable television, internet, and other communication services
  • Hotwire would be responsible for all operating expenses, including maintenance expenses and for making necessary capital improvements 
  • Hotwire would offer communication services for prices and on terms and conditions that are competitive in the Salisbury community.

If the city and Hotwire are able to complete the ongoing negotiations successfully, the lease proposal will be submitted to City Council for approval and presented to voters at a referendum to be held on May 8, 2018. The lease proposal would be subject to a successful refinancing of the City’s current tax-exempt debt financing into a taxable debt facility and to certain other conditions.


 

  • 19 March 2018
  • Author: Fibrant
  • Number of views: 42370
  • Comments: 0
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