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Sylva Internet company squeezed out by bigger players in high-speed fiber world

Metrostat Communications, the company that pioneered the advent of high-speed Internet in Sylva, will close Dec. 30.

“We’ve been through the screaming, the upset, and we’re at the point we know this is the best decision we can make,” said Robin Kevlin, co-owner of Metrostat with husband John.

Six Metrostat employees will lose their jobs. At one time, the company had 20 employees, but the ever-more difficult economy and increasing competition had taken a toll.

Metrostat was founded in 2002 in Sylva to solve a business problem for the Kevlins’ software company, located on Main Street, which they later sold. The couple needed high-speed Internet, as did other businesses in Sylva’s downtown. After identifying the critical need, they filled it for themselves and others by laying fiber optic cables and selling bandwidth to customers. The Kevlins declined to specify how many accounts they currently manage but described their service as extending throughout Sylva’s downtown area.

The business start-up was a brave foray into a market dominated by big companies such as Charter and Verizon. But here in Western North Carolina, Metrostat also found itself competing against a grant-funded, public-private partnership forged to run high-speed fiber lines through rural mountain counties in the far west.

The couple pointed to BalsamWest FiberNET, a joint venture funded by the Eastern Band of Cherokee Indians and Macon County private businessman Phil Drake, as Metrostat’s major competitor and most daunting business hurdle.

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Though repeatedly emphasizing that they did not want to sound bitter or angry toward BalsamWest, the couple said Metrostat simply could not hold its ground against the larger company. Initially, BalsamWest was going to lay a fiber backbone through the mountains and allow smaller companies such as Metrostat to be the actual service providers. But BalsamWest began directly selling service and cherry-picking the customers, undermining Metrostat’s business model, they said.

“We needed the big customers, then BalsamWest came in, supposedly doing the ‘middle mile,’ and they started taking over our last-mile customers,” John Kevlin said. “And any grant money that came into Jackson County, they got 100 percent. I put my personal fortune into (Metrostat), and I got killed.”

Cecil Groves, CEO of BalsamWest, expressed sadness that Metrostat was closing down.

“I do regret that they were not able to sustain it. John and Robin did a very good job in helping this community and region. But I don’t think that falls back on BalsamWest,” the former president of Southwestern College said. “I feel for them. This is a very hard business, and it is changing very, very fast.”

For his part, Groves emphasized that BalsamWest’s business model extends far beyond Sylva where Metrostat focused its efforts.

“We’re trying to put a base in for economic development for this region, for the six western counties,” Groves said.

Groves said the initial goal, the building of the “middle mile,” was accomplished through the use of private money. Connecting the schools, Groves said, did result in BalsamWest tapping grant funding.

In downtown Sylva where Metrostat was known for providing good, fairly priced service, business owners were upset by the news they must now find another Internet carrier. Metrostat users received a Nov. 21-dated letter Monday morning via the postal service that explained the situation.

“Sustainable funding for an independent local utility requires long-term resources and support that we have not been able to identify,” the Kevlans wrote. “While we all love what Metrostat does, we simply do not see a financial path forward to continue operating.”

“I called them and said, ‘What do we need to do to keep you in business? Pay another $30 or $40 a month? Let us know, we’ll rally the troops,’” said Bernadette Peters, owner of City Lights Café in Sylva. “But it was too late. I’m not sure that they realized what people would have done to actually keep them here.”

Amazingly, in this day and age of questionable customer service, Peters said Metrostat was terrific because “you could call them if the server went down, and you’d actually get a call back.”

John Bubacz, owner of Signature Brew Coffee on Main Street and a member of the Downtown Sylva Association board, said he hated to see “hardworking people like Robin and John and all of their staff lose their jobs, and the community lose such superior service. We’ll never replace them.”

That said, Bubacz was anxious to emphasize that despite some recent business closings — Annie’s Naturally Bakery, Metrostat and a Kentucky Fried Chicken restaurant on N.C. 107 that seemingly disappeared overnight last week — Sylva’s downtown is still doing well.

“No, downtown is not dying,” Bubacz said.

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