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November 05, 2009

Fiber from the Chaff

As the saga of Burlington Telecom continues to unfold, a growing number of observers are offering their take on the ever-popular topic.

From the pages of the Burlington High School newspaper to the airwaves of Vermont Public Radio, the topic is capturing the public's imagination. Given the confluence of issues in play, such interest makes sense: We're looking at a $17 million loan that was never given an explicit OK by the city council; the use of that money in violation of BT's certificate of public good; a growing revulsion among some people toward anything government-run; and decades-old political turf wars between Democrats and Progressives thrown in for good measure.

As I noted in this week's "Fair Game," there are plenty of parties to blame for missing all the signs of a possible scandal (and the media aren't exempt). But where to go from here?

That's where these commentators come in. I'll simply provide a salient quote and a link to some of the thoughts being offered on how to move forward with Burlington Telecom.

In a commentary on Vermont Public Radio, Rich Nadworny, founder of the digital media marketing business Digalicious, suggests that BT, if properly run, could help bring Vermont into the modern age.

He notes:

Some of the vitriol in the current debate stems from principle. A number of people, on principle, are against municipal or state entities competing with private industry. It's their right to oppose Burlington Telecom on those grounds. I hold to a different principle: I think it's every Vermonter's right to have fast, reliable and affordable Internet connectivity. I don't care where it comes from. We need it to compete in the global economy. And in the broadband classroom of the U.S., Vermont is sitting in the corner in a dunce cap.

I also see something very positive with the Burlington City Council appointing special panels to look into Burlington Telecom. As private, taxpaying citizens, we have almost no power to look into financial mismanagement in companies like FairPoint or even Goldman Sachs and even less power to mete out punishment to deserving CEOs or CFOs. With Burlington, we do have that power, through our elected Councilors.

The Burlington Business Association surveyed its 250 members recently, with some interesting results. Interesting that about a quarter of the respondents don't think having the option of BT's high-speed Internet is all that important to business development — and that most of the businesses think BT's money woes spell trouble for the financial health of the city.

BBA Director Kelly Devine said no other issue has sparked as much interest from her members, and noted that it appeared at a time when the business community is also unnerved by the news that General Dynamics is leaving the city.

(More bad news today for Burlington is that one of the three prospective lead tenants of the redeveloped Moran Plant has dropped out due to finances.)

The other major business association in the region — the Lake Champlain Regional Chamber of Commerce — chimed in on BT.

In a blog post titled "Burlington Telecom: Let's Get All the Facts First", Executive Director Tom Torti urges city officials to ask some fundamental questions about BT before calling for the heads of city employees.

He writes:

"[U]ntil a thorough audit is conducted and until we understand the legal options and opinions that were given to the administration to consider, I’d suggest that everyone take a breath and refrain from calling for the head of Marie Antoinette. It makes for good political theatre and gets peoples' names in the paper but there is a city (with some significant challenges ahead of it) that needs to be run.


To me, and to many with whom I have spoken with, there are three larger questions that should be debated before we call for draconian measures to be taken at city hall. First, is the hypothesis that created a municipality-owned and operated telecommunications utility still legitimate?; second, once there is agreement that it makes sense under some business or social construct, then is there a business plan (tax and fee model) that can ensure that the operation can remain financially viable over the long haul?; and third, does the cost of that business plan to residential and commercial tax payers justify the business or social case?

Finally, in its most recent newsletter, the Center for Media and Democracy, which runs Channel 17 in Burlington, issued six reasons to support Burlington Telecom. Those reasons include

1. BT’s capacity and speed attracts “digital economy” businesses that pay well and serve our community in many ways.

2. City departments pay less for fast, reliable digital networks than they’d pay to private sector companies.

3. Competition with Comcast and Fairpoint’s phone, internet and cable services brings prices down for everyone—plus the customer service is local!

4. BT pays more in taxes and payment in lieu of taxes than the private sector telecom companies.

5. Locally owned means that the “profits” go back into the network and keep rate-payers' costs and prices lower for the long term.

6. BT provides additional access channels for live meeting coverage and public information (including Channel 317!)

Finally, in its Oct. 30 edition, the Burlington High School newspaper ran an article about the BT mess, outlining all the ways in which the telecom utility has violated the public's trust and various conditions of its CPG.

The article's lead, written by Kathleen Kilborn, cuts to the chase. After spending all this money, what has it wrought?

Many of you may use Burlington Telecom for telephone, internet, or television services, and some of you may notice that the company is still not available in your area. Their motto is, “In Burlington, For Burlington.” Surprisingly, Burlington Telecom, which has been in business since 2003, is still unavailable to provide service to parts of Burlington.


That Center for Media and Democracy list is hilarious.

Quiet weekend on the BT front. I hope councillors are preparing a bombshell for the Mayor and CAO for Mondays meeting. Resolutions to shut down any city spending that does not affect basic city public services would be my suggestion. No more pennies for Moran or anything else that is not a basic city service. Send the message and make them sweat, their attitude for what they have done is not acceptable, and they must be removed from office. It would be a bold move by the council but it is now time to play hardball.

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