WASHINGTON, February 14, 2024 – The city of Bardstown, Kentucky has reached an agreement to sell its small cable TV company Bardstown Connect to Charter Communications, ending city ownership that began nearly four decades ago.
The sale agreement – announced Tuesday night by the Bardstown City Council – won’t be finalized for several months, according Aaron Boles, Bardstown’s City Administrator and Chief Financial Officer.
The city decided to sell because Bardstown Connect was losing cable and broadband Internet subscribers, resulting in a recent 2% drop in combined revenue stemming from increased competition from online streaming services and various Internet Service Providers.
“We don’t see cable and Internet service as being a viable option for a municipality of our size,” Boles said. “We’re a little fish in a big pond, and we’re getting eaten up by the big fish.”
A rural community located in Nelson County about 50 miles outside Louisville, Bardstown has about 14,000 residents. Bardstown Connect has about 20 full-time employees, Boles said.
Boles said the city made a “business decision” to sell now to avoid costly upgrades to the communications network and raising consumers’ bills.
“It’s very difficult for a government entity to try to take on a private entity. The revenue is just not there,” Boles said. “Meanwhile, expenses continue to climb because running fiber isn’t a cheap endeavor.”
Boles, the city’s top financial officer for the past four years, addressed the Charter sale Wednesday morning during an interview on the “Bradford & Brooks” radio show on AM-FM station WBRT in Bardstown.
The City Council selected Charter over two other bidders, Comcast Corp. and Kentucky-based DUO Broadband.
Boles said the sale price won’t be disclosed for a few months.
“We plan to release all that data as soon as we have a final contract in hand and both parties have agreed,” he said. “I don’t anticipate the price changing much from what they’ve proposed.”
Bardstown Connect isn’t the only municipal system that Charter is looking to buy. Last December, the City Council in Norway, Mich., authorized the sale of the city’s communications network – which includes cable TV and broadband Internet – to Charter for about $5 million. Norway has 723 cable TV subscribers, while 1,349 take broadband and 350 have phone service.
For Bardstown, a key consideration in selling was that it will bring in much-needed cash to help the city finance $80 million in water and sewer utility projects on the drawing board.
The city wanted to move ahead on the utility projects “without burdening the entire community with $80 million in debt,” Boles said.
During the interview, Boles said the cable TV company has lost 2,000 subscribers in the past three years, shrinking the subscriber base to 5,000.
“When we got into the cable business back in the 80s, there was no one else doing it. No one else was providing cable TV. That’s changed. No one wants cable TV for one thing,” Boles said.
Boles said Bardstown Connect’s broadband penetration was actually 47% based on 9,480 current subscribers over a network that reaches 20,382 households. The number of Internet subscribers peaked in August, 2022 at 9,600.
Bardstown Connect is facing competition from several wireline and wireless ISPs, Boles said.
“When you are thinking about broadband, you’ve got AT&T that’s local here in town. You got T-Mobile Home Internet, Verizon Home Internet, and now you’ve even got satellite from Starlink,” Boles said. “Those are all options available to consumers. So, the market has changed drastically.”
The city concluded that it needed to exit a dynamic communications business and focus on a more static utility sector that does not face competitive threats amid evolving technology standards.
“The city is having difficulty competing against the larger companies that have an endless amount of money to market their product, send people door to door [and] advertise on all networks,” Boles said. “A city is most adept at dealing with legacy utilities – things that don’t change very much. No private entity wants to be in the sewer business.”
Ted Hearn is the Editor of Policyband, a new website dedicated to comprehensive coverage of the broadband communications market. A version of this piece was published on Policyband on February 14, 2024, and is reprinted with permission.