Michigan City Decides to Sell the Cable Cord
By Ted Hearn, Editor of Policyband
Washington, D.C., Dec. 28, 2023 – Cord cutting and cord trimming are familiar terms in broadband circles. But here’s a new one: Cord selling. And that’s the option just chosen by Norway, Mich., a small city on the Upper Peninsula iron range.
Norway’s leaders, after reviewing all options, decided to sell the city-owned cable system that has been a local telecom pillar for decades. Last week, the City Council authorized City Manager Dan Stoltman to pursue a sale to Charter Communications that could yield about $5 million.
“It’s true we are looking to sell the system to Charter as the last remaining interested party,” Stoltman said in an interview Thursday, adding that three other bidders emerged before dropping out.
Financial pressures drove the city’s decision. As Stoltman explained it, upgrading the cable network would require borrowing money and paying the debt would lead to higher cable bills, which would result in possible customer loss and hurt the city’s ability to pay off the debt. Norway has only 2,800 people.
“The thought was, ‘As a city should we be in this business?’ Stoltman said. “Do we have enough people to manage the telecommunications system? With just 1.5 employees to handle cable operators, Stoltman concluded, “We don’t have the expertise.”
Norway has 723 cable TV subscribers, while 1,349 take broadband and 350 phone.
Some cable companies are shutting down cable TV and migrating their video customers to streaming options available over their broadband service. Recent examples include Ketchikan Public Utilities (KPU) in Alaska and DUO Broadband in Kentucky.
“We discussed that internally,” Stoltman said. “We didn’t pursue that too heavily.”
Also making a complex move to the streaming option less suitable was Norway’s demographics.
“Our population here is a bit older. There’s that consideration, too,” he said.
Norway’s five-tier broadband pricing options range from $50 a month for 30/3 Mbps to $175 a month for 1 Gig/50 Mbps. From his discussions with Charter, Stoltman said he believes the Connecticut-based company is likely to offer a 1 Gig symmetrical option by 2026.
“I think it’s going to be a lot better for the majority of the people,” Stoltman said.
Norway and Charter are in the early stages of their negotiations. Both sides are making a good-faith effort to complete the sale. If the deal with Charter happens to fall through, Norway will keep the cable system running, Stoltman said.