Business Looking Up For MI-Connection
There’s been a lot of bad news for the cable company owned by the towns Mooresville and Davidson. The towns have struggled to keep the cable provider afloat, but as WFAE’s Nick de la Canal reports, things may be improving.
Editor's Note: This story includes a correction
Mooresville and Davidson formed the cable company MI-Connection back in 2007 after their previous cable provider, Adelphia Communications, went bankrupt. The towns had gone through a string of bad quality cable providers. A lot of residents were getting fed up with the outside companies. The towns figured they could do a better job providing services themselves, so they took out loans and formed MI-Connection for about $90 million.
It was bad timing.
The economy took a nosedive. The towns were suddenly faced with revenue shortages. It became harder for Mooresville and Davidson to find the money to subsidize MI-Connection. In 2010,
Mooresville Davidson raised funds for the company by imposing a new $200 garbage-collection fee. Davidson, which owns a third of the company, also made personnel cuts to make the subsidy payments. Many residents were not happy.
"Yeah, I think there was quite a bit of negative perception about the towns making the decision to purchase the system," says MI-Connection CEO David Auger. "I think residents, to some degree, are coming to grips with the fact that we’ve got to make it work.”
Nowadays, the company is faring a little better. The board of directors predicts 7 percent growth in sales next year. And this past quarter, revenues were up about 12 percent compared to last year. Auger says it was the company’s most successful quarter.
“The growth is coming from a lot of new customers — people making decisions to change providers or, perhaps, people that don’t have service making the decision to come on board...In other words, they may have been just a video customer, and they’re adding telephone or high-speed internet.”
Still, not everything is rosy. MI-Connection has more than $75 million in long-term debt, and Mooresville and Davidson have coughed up more than $19 million in subsidies over the past four years.
Officials from both towns say they hope to someday sell MI-Connection and get out of the cable business for good. But they’re going to wait a while longer for the company to keep growing.