Officials: C Spire refused to negotiate

Published 11:11 am Friday, May 22, 2015

C Spire offered Brookhaven an exciting opportunity with its Fiber to the Home Internet service program that would increase web speed and capacity. The advantageous service came in a markedly disadvantageous package, according to the city’s mayor, attorney and Board of Aldermen.

Brookhaven city officials, like several other communities initially considered in the program, had concerns over terms in the franchise agreement. When the mayor and the board attempted to pursue negotiations and secure the service, C Spire declined, stating no changes would be made.



“We beat each other up in this room trying, amongst ourselves, to come to an agreement and there were no negotiations with them,” said Mayor Joe Cox. “‘Our way or the highway’ and then literally — we never heard from them again. We heard through the grapevine that they had ‘gone in a different direction.’ They never came back to us.”

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And that was that, he said, the company withdrew the offer. City Attorney Joe Fernald said Oxford not coming to an agreement over franchise terms with C Spire likely happened the same way, as they turned the company’s agreement down. Starkville, one of the earliest communities on board with the program, now utilizing fiber Internet in several neighborhoods, might have struggled with the decision, Cox said.

“If I recall Starkville was a 4-3 vote, so there was a lot of opposition there as well,” he said.

While there are more cities expressing interest in moving forward with the super high-speed Internet initiative, not every deal is a good deal, Cox said. According to a recent story by Tupelo’s Daily Journal, Tupelo’s city attorney Ben Logan requested changes to the city’s C Spire contract as well, as they were not favorable to the city, and Tupelo was also not selected.

The original Tupelo agreement asked for an initial 25-year agreement, with two consecutive periods of 10-year renewal terms kicking in automatically after the first 25 years, resulting in a total 45-year agreement.  Automatic contract renewals, Logan said, are not allowed per state law.

Cox and Fernald said this was how their agreement proposed by C Spire read as well.

“But that’s what they told us,” Cox said. “And that they could not make any deals with us to alter our contract because they had maybe already offered [this town], and this one and this one and this one, the same contract. So they could not change ours without going back and changing everybody else’s.”

But Tupelo remained in contact with the company after the city wasn’t selected, and is now in negotiations after C Spire agreed to contract changes.

Unfair advantage

The terms of C Spire’s franchise agreement would allow C Spire to bypass permit processes and fees, requirements and codes in order to bring the service sooner. Dave Miller, senior manager of C Spire media relations, said the contract C Spire presents to cities includes language that would help expedite the construction process. City officials said allowing C Spire to “fast-track” past these regulations would show favoritism to one company — as other companies are not allowed, per law and city standards, to operate above the laws and ordinances, and must go through the proper channels.

“They [would be] given a franchise to do what they want to do, in the right of way, in the public way. Nobody else has that franchise,” Fernald said. “But they can read. Companies would come in and say ‘Wait a minute. You gave them that, we asked for the same privilege as part of our agreement.’ All I know is that the law is that you must treat similarly situated people similarly.”

In a letter written by city officials, the board expanded: “Allowing one company to bypass building codes and fees creates a special exception for the benefit of C Spire. This significant competitive advantage would be unfair to all other franchises, utility companies and residential or commercial builders. Similar companies would be entitled to the same treatment, thereby gutting the future viability of our building code and related ordinances and creating a construction nightmare.”


Keep it quiet

When C Spire began presenting the program to Mississippi cities, the company requested that the terms of the agreement and discussions about it be kept secret. In Brookhaven, this meant having the official board meeting that could have ended in an agreement in executive session. Cox and Fernald said they honored the request because they wanted to work with the company to bring them here, even though contract negotiations are not covered under Mississippi law as a reason for going into executive session.

“We wanted to cooperate because they’re a good company — make no mistake about it they’re a good company,” Fernald said. “We’re proud they’re from Mississippi, but it doesn’t change these people’s jobs.”

“They withdrew the offer. It’s easy to be the target and people say bad stuff about you, but I feel like a certain amount of what went on was private, not because it’s not public works, but we met on a regular basis,” Fernald said. “We didn’t keep minutes. They would come and talk to the mayor. I had a conference on the phone with you and them at the Chamber office,” he said, gesturing to Cox.

“That’s how city business is transacted before it comes to the board. The night that they came in we wanted to know if they were going to [make any changes],” Fernald continued. “We were going to start it with [them telling us] the changes they would make and then we would go out of session and we were going to vote for it or do whatever we needed to do. And they weren’t going to make any changes.”

Fernald said the meeting was short, and ended unfortunately, as the board, mayor and himself thought it would work out.

Similarly situated

John Hilbert, general manager for Cable One, said in their negotiations with the city, it was required of them to offer the service throughout the city. In their agreement, potential customers must be within 500 feet of a main cable line. While there may be individuals who are not in a service area because they are too far from a line, or live across major traffic corridors that make it extremely difficult to put in new lines, Cable One has been held to their promise.

“We literally put the cable company to task. If they didn’t offer services we put them to task, and they’ve done what they’re supposed to do,” Fernald said. “I’m sure they don’t appreciate being treated that way … but they’ve done well by us.

“It doesn’t matter what they are if they ask us to do something that is improper or illegal without any regulation of any kind, [we cannot agree to that],” Fernald said. “If AT&T does something wrong the public service commissioner gets on to them. If Cable One did wrong, there are clauses in their franchise agreement that we could terminate that franchise agreement if we have to.”

“When Cable One came in, they had to do the whole town. There was no disclaimer,” Fernald said. “The idea that [C Spire] can be so selective about the product, and not offer it to people as that agreement says, is almost problematic. Because what do you tell the rest of your taxpayers? Technically, whenever they break a water line or they tear up something, and we have to get it fixed, that affects all the taxpayers.”


The city of Brookhaven is not the only entity wanting to avoid this income-driven selectivity, Fernald said.

“As I understand it, that’s one of the reasons why there is rulemaking going on now, because they don’t want people selectively targeted for service,” Fernald said. “And they’re going to identify Internet as a public utility because everybody should have it. It should not be something that is restricted to your income.

“And I’m sure [C Spire is] trying to solidify their position in the market before all this stuff so they can bundle services,” he continued. “And I applaud them for that.”

“We appreciate them, we appreciate their model, we appreciate what they do —some deals just don’t work out. Not every deal is a good deal,” Cox said. “Sometimes one side or the other walks away, and that’s basically where we are.”

“Like I said, we understand the model,” Fernald said. “I understand why they’re doing that, I really do, but it’s unfortunate. I do, I think the board members do, because we think they are a good company, nothing wrong with that. It’s just something we can’t give them. We thought we were going to reach an agreement and we weren’t.”


So how does Fiber to the Home from C Spire differ from other Internet services such as AT&T’s U-verse, as they are not required to provide the service to an entire city? The answer, Fernald said, is that AT&T did not ask for a franchise agreement.

The way that C Spire Fiber to the Home would work is similar to AT&T’s U-verse, but with one crucial difference: AT&T already has a franchise through the Public Service Commission that regulates its actions. C Spire, a similarly situated vendor offering similar services, would not have to answer to anyone. And Brookhaven, per the franchise if the city were to agree to it, would have relinquished all control over C Spire’s actions.

How are other cities working with these terms which seem to be in a legal gray area?

“It’s a calculated risk if a board wants to take it,” Fernald said.

“Sometimes it takes guts to make that decision, it actually takes courage,” Fernald said. “When we discussed this, this board wanted to do everything they could to get this service — I know the mayor did.”

“I was part of the team that went to Ridgeland when we made our pitch to get it,” Cox said. “You know, in my notes from that day, the folks that withdrew their name from [the program] had to do with the contract. I thought, ‘I wonder what’s in the franchise?'”