The AP says Burlington Telecom may be a cautionary tale for cities around the the country that contemplate building their own networks.
It is fascinating that this article appears now, as we wait for the audit of Burlington to be published, where we hope to finally discover exactly what went wrong in the network. The Mayor used to allege that Tim Nulty (General Manager who built it) left it in ruin when he resigned.
However, it looked good (not great, but good) at that point. And after the transition, the Mayor's Administration ceased Nulty's policies of transparency, so we would have to take their word for it rather than any proof. For instance, BT ceased to work with citizen oversight committees. This is the same Administration that hid supposed transfers to the network from the City Council and the people.
The very fact that such secrecy was possible is troubling. These networks are intended to behave somewhat transparently and should be independently audited to ensure problems (which may be corrected when found) are not hidden for political reasons. Burlington had a unique structure that allowed the Mayor too much opaque control over the network - something rarely found in the structure of most community networks. (Some things, such as prices paid for content, should remain secret for competitive reasons, but that should not allow the Mayor to hide key metrics regarding the health of the network.)
There are reasons to believe the Mayor improperly accounted money to BT, which is why we await an audit from the state that we hope will clear up exactly how Burlington Telecom went from being a good example to the worst example of public ownership (something
paid shills from telco and cableco groups critics love to point out).
Author Dave Gram has an odd passage regarding this situation:
In September 2009, BT notified the Vermont Public Service Board that it had used $17 million in city funds in violation of its state license. State officials have been mum about the details of their investigation, and an FBI spokesman, through an assistant, would not confirm or deny a Burlington Free Press report that that agency had stepped in. It's widely believed that apparent license violation may be at the center of the criminal probes.
A license violation brought in the FBI? Seems hard to believe - especially as every agent in Vermont should be investigating FairPoint if they are interested in license violations. But again, we hope to learn more about what really happened when the audit is published.
Unfortunately, Gram barely balances the bad example of Burlington with the wider experience of community ownership.
"There are some municipal systems that have done very well," said Michael Render, president of Tulsa, Okla.-based RVA Market Research, which follows development of fiber-to-the-home systems like Burlington's.
He noted, though, that the roughly 70 municipalities offering fiber-to-the-home have a combined market share of about 3 percent of the industry. More than two-thirds of fiber-to-the-home customers in the U.S. get their service from Verizon Communications, Render said.
Umm, perhaps that is because Verizon passes many many millions more than community networks do. Verizon's FiOS take rate is a joke compared to the average community network. But yes, most Americans on fiber-optic networks subscribe to FiOS. Not sure how that is relevant. After all, Americans eat more pizza than Italians (and more french fries than the French). Might have something to do with there being hundreds of millions more Americans…
Gram could have noted that the fastest broadband network in the U.S. is community owned (a cautionary tale for those communities who think they will be globally competitive by relying on private sector infrastructure investment), but he didn't.
He might have mentioned that in April, BT connected the Howard Center with a 10Gbps and 1Gbps connection [pdf]. Try getting that at an affordable rate from Comcast or Fairpoint.
Karl Bode was annoyed that Gram seemed to portray muni networks as leftist but I'm not sure I agree entirely (Gram alluded to Burlington's culture) and at any rate, I would love to see what happens to anyone who wanders into a City Council meeting in Opelika, Alabama or Wilson, North Carolina and calls everyone a bunch of hippies.
Burlington Telecom, what whatever reason, is the new poster child of those who want to deny communities the right to build the networks they need. To be frank, Burlington will not be the last network to suffer through bad leadership and mismanagement. But comparing the overall record of public ownership to that of incumbent telcos and cablecos shows that communities are better off when their infrastructure is directly accountable to them.