Thursday, December 3, 2015

As technology leaps ahead, towns need to focus on MI-Connection sale

The  Board of MI-Connection, the cable company owned by the towns of Davidson and Mooresville met last week to hear the latest numbers on its operations .  Fortunately, while the company is still a long way from being profitable, the numbers are at least headed in the right direction.  A press release provided by Christina Shaul, Davidson’s Public Information Officer provided the following positive news.

“April Bell of auditing firm Dixon Hughes Goodman shared results for the fiscal year that ended June 30, 2015.  She stated that MI-Connection is seeing a very positive trend in financial results.

During his review of the financials, MI-Connection CEO David Auger shared that revenue is up 3.74% in Q1 2016 versus Q1 2015. Expenses are favorable in Q1 FY 2016 versus Q1 FY 2015, by .62% . EBIDA (Earnings before interest, depreciation and amortization, a key metric used by cable operators to measure performance) grew by 17.41% from Q1 FY 2015 to Q1 FY 2016.”

That’s definitely what taxpayers who have been subsidizing the company want to hear, rather than things are headed in the opposite direction.  It is validation that the operational improvements at the company over the past few years are paying off.

The release went on to say MI-Connection will soon offer whole-home DVR, the ability to stream content on any iOS or Android device, and the ability to remotely program your DVR.

Again, that's good to hear, but those are new services for the company, not new to the industry.  As a small company, innovation will always be the company’s Achilles heal.

A recent telecom industry announcement exemplifies that and should hopefully ensure the political decision makers keep their eye on the ball and continue working to get the company ready for sale at some point in the relatively near future.

The impact of this recent announcement actually was foreshadowed here locally a few years ago.

Back in 2011, I remember sitting at a political event in Davidson just as election season was ramping up.  Davidson Commissioner Rodney Graham, was making some comments about Mi-Connection.  Graham had made an unsuccessful attempt at the Board in 2007 as one of the few candidates at the time to question the idea of the town getting to the cable business.  He was getting ready to make what would be a successful run in 2011.

At that meeting I remember Graham holding his phone in the air and talking about some day being able to get internet speeds over wireless that rivaled what one could get from a cable company.  That would be the day things started to look much more difficult for the municipally owned cable operation.

Well, that day may have quietly gotten a significant step closer with an announcement by T-Mobile three weeks ago for its new "Binge On" service.

While wireless phone carriers can't offer data speeds that match the newest offerings being rolled out traditional cable companies – including  Mi-Connection’s, the newest 4G LTE wireless networks offer speeds sufficient for high quality video streaming as well as many other uses.  The one drawback has been the cost of streaming lots of data over these wireless networks – until now.

T-Mobile’s “Binge On” product removes that barrier by allowing unlimited DVD quality video with the purchase of a minimum wireless data package.  All of the top name streaming services such as Netflix, Amazon, and Hulu are available with “Binge On” as well as Sling TV which offers many of the top live TV channels including ESPN.  Now, a customer can become truly mobile with their video, voice, and data all coming from a single provider, and that provider is not the traditional cable company.

Are there drawbacks and limitations to going fully wireless?  Yes, there certainly are.  If you are into lots of gaming or have other high-bandwidth needs for business uses, going completely wireless may not be for you – today.  Long-term this type of continued change in technology could make it a different story.

Commissioner Graham was holding his phone at that meeting just four years ago.  What will things look like four years from now.  Hopefully, our current crop of political leaders won't make us find out.

Bonus Observation:

Ran out of room for this in the version for the Herald Weekly.

Not only will MI-Connection be facing more competition from new technologies in the future, but they will also have to go head-to-head against Time Warner.  In a conversation with the developer of a large new neighborhood underway in the MI footprint, it was made clear that both MI and TWC have been offered the opportunity to supply service to the new neighborhood.

The developer wished to remain anonymous because details had not been finalized. However, it does show that competition is going to be growing particularly around the edges of the MI footprint.

How MI stands up to the challenge will be critical.  New customers from new neighborhoods have been critical to the company's recent growth in subscribers.   The Langtree development at Exit 31 would be the prime example.

Can the company continue attracting large numbers of new customers in these neighborhoods if it has to face real competition with relatively unlimited resources?  That will be the big question going forward.

This post first appeRed in this week's Herald Weekly at

No comments:

Post a Comment