County Drops High-Speed Partnership

SNOW HILL – A $12,000-a-month shortfall and significant operational issues have prompted Worcester County to sever its management agreement with the Lower Shore Broadband Cooperative (LSBC).

The county took over management of LSBC in September 2008 after lightning strikes damaged five wireless towers, sending the cooperative into operational failure. A management team established by the county went to work to restore reliable service and get to a financial stability that would forestall bankruptcy.

A memorandum from the management team reported, “…regrettably we have been unable to develop a plan for the long-term financial viability of LSBC without continued public subsidy and/or significant rate increases to the LSBC members to cover the ongoing operational and capital costs associated with continued operations.”

The memorandum went on to recommend that LSBC meet with its membership to decide whether to increase rates or dissolve the cooperative entirely.

While service has been restored after the equipment damage, there are simply too few customers to pay for the service at the current rates, the county says. LSBC has only 224 subscribers, at $34.95 per month for residential customers and $49.95 per month for business customers.

The LSBC business plan was predicated on a 1,900 strong customer base, according to Harold Higgins, Worcester County treasurer.

Expectations county schools would make up a large proportion of the LSBC customer base were dashed because a contract with Verizon prevented the switch.

LSBC also has outstanding debt in the neighborhood of $700,000.

The management team has looked for grant funding to support the non-profit service, but has not found any.

“From the beginning it was never our intention to run the broadband cooperative,” said Commissioner Judy Boggs. 

Termination of the management agreement between Worcester and the LSBC was a unanimous recommendation of the county’s management team, said county administrator Gerry Mason. The commissioners agreed.

No decisions have been made on the future of LSBC.

“We’re working to pull together a members meeting to discuss and vote on next steps, and probably to re-elect a full slate of board of directors,” said Diana Nolte, an LSBC board member.