[First, my bias: Capital intensive competitive services for general public consumption should be provided by the private sector, not by taxpayer funded entities, like cities and towns]
In the discussion this morning, Mr. Leopold made several references to how the City of Burlington routinely advances funds to the Burlington Electric Department (BED) and the Burlington School Department from the city's pooled cash funds. By making the comparison with the city's actions in loaning funds to BED, a regulated monopoly and a department of the city, to BT, an investor-funded standalone entity that is under construction in a lease-purchase deal with private bankers, is nothing more than obfuscation precisely because BT is not a city entity like BED. Mark missed this point in his questioning of Mr. Leopold.
BT customers are not captive like those of BED. They have choices for phone, TV and Internet access. Unlike BED, no 'captive' revenue stream exists for BT because they are in a competitive business. To put Burlington taxpayers on the hook for BT's operational and financial failures when the city does not, in fact, fully own the assets is wrong and those responsible should be held to account.
The question becomes what to do with this mess. The huge investment to place fiber optic facilities in the 'last mile' by an entity without deep financial resources was not a wise municipal decision, IMHO. I have been opposed to it from the beginning as a municipal venture. We have seen failures of municipal WiFi all around the country, but BT is extraordinarily capital intensive and the build out to serve all of Burlington apparently will require several millions more.
When Verizon and AT&T deploy their wireless 4G technology in a couple of years, BT will be in even worse shape as more and more customers move to mobile broadband which will provide essentially the same services as BT. The city will soon find that a serious mistake was made by believing they can or should compete with the private telecom sector.
Here's a very well done recounting of the latest BT events. However, I find the site overall is generally biased toward municipal systems and against the private sector broadband providers. There are tinges of it in the BT reporting, but overall its a very good summary of recent events.
Here's a very well done recounting of the latest BT events. However, I find the site overall is generally biased toward municipal systems and against the private sector broadband providers. There are tinges of it in the BT reporting, but overall its a very good summary of recent events.
2 comments:
"Capital intensive competitive services for general public consumption should be provided by the private sector, not by taxpayer funded entities, like cities and towns"
That begs the question of whether broadband should be considered a competitive service. Fiber optic networks being one of the best examples of a natural monopoly, presents a strong case for telecom networks being treated similarly as electricity, roads, water, and other elements of essential infrastructure. Services need be much less regulated, but the networks themselves are destined be under-invested in so long as we leave it to the private sector because many network benefits are difficult to monetize.
If you propose that the underlying infrastructure on which telecommunications services are provided should be built at taxpayer expense and also publicly owned, would that apply both to fixed plant services such as fiber optics and wireless such as land and buildings, towers and antennas, too? Would you want BT to be a monopoly provider of telecom infrastructure, but not services?
Consider...
Burlington Electric Department is a regulated local grid monopoly. If you live in Burlington and want to connect to the grid and buy (or sell via net metering) electricity, then you MUST do business with BED.
Burlington's CAO makes the case that he routinely loans money from the city's cash pool to BED, which has a very predictable revenue stream from its captive customers. He tries to convince folks that it's OK to do the same, apparently without limit, to BT.
I'm sure some Burlington taxpayers and BT Progressives would love to make BT just such a monopoly. Never mind that BT is in a very competitive marketplace where technology, particularly wireless, is changing rapidly. Let's 'force' service providers to become BT customers, some might suggest.
Sorry, but national policy is for more competition, not less, in telecommunications. Wireless technology is fast becoming as useful as fiber optics for broadband services. Socialized fiber infrastructure won't work when customers have choices.
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