SMU's turnover of Internet, cable to Cellcom under way

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The turnover of Shawano Municipal Utilities’ cable and high-speed Internet services to Cellcom is on track to be completed by Feb. 1, according to city and company officials.

In addition, SMU’s roughly 240 telephone customers will be notified around the first of the year that they will have 90 days to find another phone service provider.

“Everything is in place to turn our telephone service off on March 31,” said Brian Knapp, SMU general manager and city administrator.

Local wireless service provider Cellcom purchased the utility’s retail fiber optic system for $1.25 million. The deal was approved by the Common Council in October and closed on Dec. 2.

The sale did not include the utility’s phone service, in compliance with a Wisconsin Public Service Commission ruling that states the city can sell most of the utility’s assets without a referendum.

State law requires a public referendum when a municipality sells a “complete public utility plant,” but the referendum is not triggered if the utility is selling only some of its assets and retaining some, according to the PSC decision.

Customer response to the turnover has been mostly positive, according to Knapp.

“There’s been a little confusion, but by and large, people have been very happy,” he said.

Phone customers in particular will probably be happy to turn their service over to a different provider, Knapp said, given the issues that have plagued SMU service, including dropped calls and calls going straight to voicemail without the phone ringing.

Cable TV and Internet customers will see better offerings after the turnover as well, he said, including higher Internet connection speeds than SMU could offer and a couple of highly requested cable TV offerings that were not in SMU’s lineup. Those include the NFL Network and Fox Sports 1, formerly the Speed Channel.

Cellcom crews have been out since the sale closed doing the field work needed to complete the turnover; in some cases household by household.

“It’s very complex and very specific,” said Bridghid Riordan, director of public affairs. “We’re taking a really close look at every customer.”

Though in most cases it has not been necessary to go into customer homes, the company is looking at what equipment each customer has and determining whether any upgrades need to be made, she said.

Cellcom has said there would be no price increases for SMU customers during the transition period, and Riordan said there are no increases currently being planned beyond that.

“We want to keep our rates reasonable and competitive,” she said.

Customers will continue to contact SMU for billing, technical issues and installation during the transition period.

The utility had about 780 customers when the sale was closed, Knapp said. With many of those customers using more multiple telecom offerings, that totalled about 1,500 services, he said.

Shawano residents approved borrowing $4 million for the infrastructure needed to create a telecommunication utility in a 2006 referendum. The utility’s intention was to have customer revenue pay for the network and the service, including the repayment of the $4 million in borrowing.

Over the next two years, the utility shifted to a more ambitious and expensive business model, fell months behind in its promised roll-out of services, and ran into a number of glitches delaying digital cable service.

The utility’s telecom services have continually run deficits since going into operation.

SMU began looking for a sale, lease or partnership to relieve itself of the telecom services in 2011.

In addition to the original $4 million debt, a $1.5 million line of credit was taken out to cover operating costs. The utility has used $1.2 million of that line of credit, Knapp said, which will be covered by the sale to Cellcom.