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Groton — The city's foray into the cable television and Internet business is coming to an end after eight years.
Thames Valley Communications is being sold for $150,000 to a private investment management firm, the city announced Monday.
TVC was launched in 2004 as a subsidiary of Groton Utilities. It was the state's first municipality-owned cable provider and was intended to give people another choice in the television and Internet market.
The company lost $2.5 million in the most recent fiscal year, according to Paul Yatcko, the director of Groton Utilities. He said technological advances in the industry and increasing competition were factors that hindered TVC's viability and growth. The company, which cost the city approximately $28 million, competes with Comcast and several satellite television providers.
"It was our baby. We took a great deal of pride in being able to offer this to people," said Marian Galbraith, the city's mayor. "At this point, the financial resources it needs are more than what the city has to offer."
Galbraith said customers of TVC will not experience any immediate change in service. The City Council was scheduled to consider the sale at its meeting Monday and a public information meeting has been scheduled for next Monday at 6 p.m. at the city's municipal building. A final vote on the sale is scheduled for Dec. 17.
Yatcko said the city hired an investment adviser that searched for companies interested in acquiring TVC. CTP Investors was chosen because its management is hoping to expand the business and its services, Galbraith and Yatcko said.
For instance, it has expressed interest in retaining TVC’s 23 employees, according to Galbraith. Yatcko said the company is also considering the addition of “whole house” digital video recorders, which would allow customers to watch recorded television on all TVs in their homes.
An email sent to CTP Investors Monday was not immediately returned. The company is scheduled to take over operations of TVC around Jan. 1.
"We look forward to working with TVC's employees to build TVC into an even more important, locally-managed business in the Groton region," CTP Investors President Bill Pearson said in a statement.
Yatcko declined to say how many customers pay for TVC service. Previously the company planned to service more than 35,000 homes in Groton, Ledyard, Stonington, North Stonington and Voluntown.
Groton Utilities also offers electric and water service and it has 12,600 electric customers. Yatcko said the utility has been successful in electric and water ventures because it has no competition for the services. It's been just the opposite in the cable and Internet world.
"Just to keep up in this business, you have to continually re-invest in technology," Yatcko said. "That is the real difference."
Voters in 2001 gave the city the go-ahead to start TVC. It went through an exhaustive regulatory process before being cleared to start business in May 2004.
The TVC board of directors conducted an extensive review of its options for maintaining the service, according to the city. Galbraith said the review began more than a year ago.
"We went into this with the best of intentions," she said. "We couldn't foresee the future. We acted on the knowledge we had at the time."