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Fast, affordable Internet access for all.
Business Plans of Burlington Telecom and ECFiber Numerous loose allegations have recently appeared in the press regarding the business plans of Burlington Telecom and ECFiber. DPS Commissioner David O’Brien and John Briggs of the Burlington Free Press are examples but others have also chimed in. These statements are inaccurate, misinformed and unfounded. Since they affect organizations that are important to thousands of Vermonters they need to be corrected. BT’s business plan was based on those of similar Fiber-to-the-Home (FTTH) networks already running and successful at the time…including Reedsburg, WI; Bristol, VA, Kutztown, PA; Dalton, GA and Winona, Minn. Experts from these projects were consulted in developing BT’s plan. Several came to Burlington to assist with and vet BT’s planning and BT staff visited them to in turn. All of these networks were built in towns, which like Burlington, had established broadband incumbents already in place so their experience was highly relevant. By their fifth year all these networks had achieved penetration rates over 55% and most over 65%. A study by survey firm RVA, in 2007 and updated in 2009 identified 57 municipal FTTH networks operating in the USA and calculated that the average penetration, including new start-ups, was 54%. BT’s business plan was constructed so that it would become profitable with 4800 - 5000 customers of the 19,500 potential—a more conservative take rate than comparable networks had actually achieved in practice. This provided BT with a substantial “safety cushion”. All capital-intensive investments-- power stations, airports, steel mills--take some time to become profitable. This is also true of telecoms.
The report lays out a range of options for the city: from doing nothing and letting the market determine Sarasota's broadband future; to partnering with a private entity in building a network that would increase speeds; to tapping a public project already in the works that could create a powerful Internet backbone between Manatee and Sarasota counties.We recently reported on another community, Dunnellon, that is building a community fiber network. Unfortunately, these communities have to deal with unnecessary barriers created by the Florida Legislature as they invest in the future of their community. Photo used under Creative Commons License, courtesy of 83d40m
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.
RUC first entered the telecommunications business in 1998, when it constructed a ring to tie its wells, its five electrical substations together and to provide Internet access for its high school, middle school and its school administration building. In planning the ring, the city asked Verizon and Charter if they would build it, but they were not responsive. RUS built a partly aerial, partly buried 7-mile ring of 96-strand fiber at a cost of about $850,000. Internet access was provided by Genuine Telephone, a tiny subsidiary of LaValle Telephone Cooperative which ran a fiber from LaValle, about 8 miles NW of Reedsburg.As they were building the ring, local businesses asked to be connected as well. Reedsburg took the path that so many communities have followed, start by building for yourself and expand opportunistically. Of course, this requires that you originally engineer the network so it can be later expanded, which is good practice regardless of your future plans. Reedsburg used bond anticipation notes, a financial mechanism that few others have used in building similar networks.
A local bank loaned the initial $5 million in bond anticipation notes for planning and construction.
The City Council voted unanimously Monday night to approve the $7.3 million in funding with Regions Bank in Orlando. City Manager Lisa Algiere told the council members the city would be doing most of its business with the local Regions Bank. The funding will come in the form of three bonds: a series 2010A Bond, which is good for 20 years and has an interest rate of 3.61 percent; the second bond is a Series 2010B Bond and is for five years with an annual interest rate of 3.20 percent; while the third bond is a Series 2010C Bond and is good for one year. The funding secured by the city is a drawdown loan, meaning it will only take what it needs and only repay that portion.The network has been branded Greenlight (though the website is not yet fully functional). Greenlight is also the name used by the Community Fiber Network in Wilson, North Carolina. Light Reading interviewed a network employee, shedding more details than have been released elsewhere. He says they are passing 7,000 premises, but Wikipedia only notes a population of 2,000 in 2004, so there is more than meets the eye at first glance. They financed the network without using general obligation bonds, working with a nearby bank (Regions is a big bank, headquartered out of state). Local competitors are AT&T and Comcast, though both offer extremely slow services; the fastest downstream speed available from Comcast is 6Mbps. The new network, as do nearly all recent community fiber networks, will offer much faster connections, the slowest being 10Mbps.