Updated 10:19 a.m.
The towns of Mooresville and Davidson say they’re planning to sell their money-losing cable TV and internet system, called Continuum. The two towns say they’ve hired investment bank RBC Capital Markets to seek a buyer.
Davidson and Mooresville borrowed $92.5 million to buy and upgrade the network in 2007, after the bankruptcy of Adelphia Communications. Revenues have grown, but Continuum still gets annual subsidies from the towns, to help pay off the remaining $60 million in debt.
Mooresville mayor Miles Atkins says after 12 years, “the time is right to sell.”
"The best-case scenario is we come out ahead, but ideally if we can just cover our debt and get out of it, that would be ideal," Atkins told WFAE.
Atkins said getting out from under the system's debt would give Mooresville "long-term financial flexibility" for "building infrastructure" as the town's population grows.
Continuum, formerly known as MI-Connection, has about 17,000 home and business customers in Mooresville, Davidson and Cornelius. It had about 15,800 when the towns bought it.
The towns have faced legislative obstacles as they've tried to grow the system. That includes a state law backed by large cable and telephone providers that bans the business from expanding outside its original territory.
Some residents have criticized the towns' ownership of the communications network and the system has become an issue in local elections in both towns. In 2010, Davidson began charging residents a $200 trash pickup fee that critics say was actually aimed at helping pay off MI-Connection's debt.
Davidson Mayor Rusty Knox said in a statement: "No matter how you might feel about local government owning a cable company, we should all feel extremely proud of what we've managed to build since the purchase."
Continuum's revenues have grown 50 percent since the towns took over, according to CEO David Auger. An original argument for the purchase was the failure of previous owners to invest in the system. Since buying it, the towns have expanded and upgraded the network for faster speeds. It now offers fiber optic cable to homes and businesses in some areas.
“We’ve done the work and it shows,” Auger said in a press release. “We put the fiber in the ground when no one else would. We invested in local people and premium products. Our remarkable performance makes this purchase a no-brainer for someone to take what we’ve built and run with it.”
The towns did not say if they had a buyer lined up. Potential acquirers could include another nearby system, such as Spectrum, which offers cable and internet throughout the Charlotte area. Spectrum's predecessor, Time Warner Cable, operated the system temporarily in the mid-2000s before it lost a court battle with the towns over who should get to acquire the system.
Last year Hotwire, a private company based in Florida, took over management of Salisbury's city-owned cable and internet service, now called Fision. Salisbury also faced losses as it tried to operate the network.
If the towns get an acceptable offer, they’ll ask residents to approve the sale in a vote this November.
Mooresville-based Continuum has 72 employees, including all-local customer service and installation teams.
RELATED LINKS
Continuum website, OurContinuum.com
