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Video: Burlington Telecom Coop Effort Moving Ahead

In December, 2012, a group of local residents decided to engage in an effort to turn beleaguered Burlington Telecom into a coop. The effort has advanced and the organization, Keep BT Local, continues to gain pledges. To date, the organization has collected pledges in the amount of $108,000 for equity and $156,000 in loan pledges.

Keep BT Local is ultimately shooting for membership pledges from about 4,000 residential and business customers. The goal has been to collect $250,000 worth of pledges to move forward with incorporation this month.

Local Chanel 17 carried a discussion on the effort to get more info on the business plan. Alan Matson and Don Schramm, who head up the Steering Committee talked with host, Matt Kelly, about the venture and took calls from viewers.

In addition to a discussion about the the heart of what is "local," the group discussed the business plan and where challenges may arise.

The discussion is about 30 minutes long.

Coop Status for Burlington Telecom? Maybe.....

Burlington Telecom may be headed for some changes. Due to the mismanagement of the prior Burlington Mayor Administration, the network took on an unsustainable amount of debt and damaged its reputation. Some of the plans to make the network sustainable again involve privatizing it. Unfortunately, as we have seen with public power privatizations, such an action typically results in worse services and higher prices due to the loss of local control.

Operating under the name Keep Our Telecom Local, a group of local residents and business leaders want to ensure BT remains owned by the community by turning it into a cooperative. At a December 13 public meeting, the group of about 50 volunteers gathered and talked strategy. According to a Burlington Free Press article on the meeting, attendees broke into smaller groups to discuss specific issues and plans.

The next step will be efforts to increase publicity for the movement and the creation of a business plan. Currently, a committee is forming to determine the best way to file for a Vermont Certificate of Public Good. Another committee is looking into formation of a board of directors.

Most municipal networks do not have to contend with the problems that have plagued Burlington Telecom. But even with all of the problems faced by this publicly owned network, the community still sees great value in rescuing it rather than abandoning it. The Burlington community appreciates the incredible value of keeping their broadband resource local. From the article:

Don Schramm, one of the organizers of tentatively named Green Mountain Broadband Fiber, said it makes sense to pursue a Third Way.

“Keeping our telecom locally owned means that the jobs stay here, the money spent stays here, the profit stays here — and most importantly, the control stays here,” Schramm said. “We will have a broadband cooperative responsible to our community needs, not the profit wants of out-of-state owners.”

We applaud the community for recognizing the value of this great asset, the importance of local control, and their efforts to keep BT local.

ECFiber Customer Shares Her Story, Locally Owned Network Continues to Grow

Last year, we reported that ECFiber was in the process of connecting rural Vermont, with a focus on connecting those who had no access to broadband. In addition to large investments from a limited number of investors, local citizens began lending funds to expand the network. 

In a recent open letter to the Governor, published in the Barre Montpelier Times Argus, Laura Zantzinger from Barnard describes how ECFiber touches her household. Zantzinger's home tech company can now expand because she has the capacity she needs from ECFiber. Zantzinger also discusses how fiber access helps her son academically:

My son attends an online high school in a program offered through one of the top universities in the country. He attends video conference classes, lectures, meetings, and myriad other communications online to California, and places all over the globe.

Two years ago, we moved out of state, renting a house elsewhere to get the Internet, because my son was not able to participate in class. His grades suffered because of it. Last year, we rented an office in another town where Internet was available.

Zantzinger describes two growing trends - home based businesses and distance learning - that require access to broadband. Zantzinger shares strong words of praise for ECFiber's mission, experienced by her first hand:

ECFiber’s approach has been open and community-oriented. They just want to get it built, pay it off, and hand it over to the towns. They are willing to make things work, even if it is hard, if it means they can serve the customer. Their priorities as expressed in the meetings were amazing to me.

According to the ECFiber blog, funding is moving forward to bring the network to neaby Woodstock. From the blog:

As previously announced, local supporters of the effort to build a fiber-optic hub inside the Woodstock library have agreed to match any similar pledge dollar-for-dollar up to $100,000. This means that, so far, the Woodstock community has advanced $15,000 toward the ultimate goal of raising $400,000.  The capital needed in Woodstock will pay to hang fiber-optic cable from the nearest ECFiber hub in Barnard, down Route 12 to Woodstock, and to construct a similar hub inside the library.

Vermont Flag

Once the library is connected, ECFiber hopes to extend to downtown businesses and the Woodstock Elementary School. The Woodstock capital campaign ends on December 3rd.

A new partnership for ECFiber will allow the network to expand via the proposed Vermont Telecommunictions Authority (VTA) Connector network as a backbone between the towns of Chelsea, Thetford, Strafford, and Sharon, all in Orange and Northern Windsor Counties. The Herald of Randolph reports on the story and notes:

The VTA connector can enable ECFiber to reach “several hundred new civic, business, and residential customers,” according to Irv Thomae, vice chair of the ECFiber governing board.

“Cheese-makers and software developers alike need last-mile broadband to reach twenty-first century markets,” he remarked.

ECFiber has already raised $1.3 million from local investors this year to support fiber optic technology in their towns, and the agreement to use VTA’s “backbone” will make those funds go farther, Thomae said.

ECFiber continues to be an exciting model for a self-funded, next-generation network connecting those who have been largely left behind by state and federal policies that are more concerned with doling out subsidies to large, absentee companies building obsolete networks.

Burlington Telecom Announces a Gig and Computer Repair Services

We have covered happenings at Burlington Telecom, both positive and negative, extensively. We are glad to report some interesting new developments of this Vermont municipal network. BT is rolling out faster connections and using its competitive advantage in customer service to offer some computer repair services. Joel Banner Baird at the Burlington Free Press reported:

Without cash reserves and promotional enticements available to BT’s commercial competitors, the fiber-optic Internet/phone/cable provider will focus on its strength in customer service, said interim General Manager Stephen Barraclough.

As our readers know, BT is in the midst of a pending lawsuit with Citibank, wherein the financial giant says the city still owes it $33.5 million. The network's troubles, including misuse of public funds by the previous Mayor, have hurt its ability to generate income and Burlington's credit rating has suffered.

While fixing PCs certainly won't pay mounting legal fees, it will make life easier for customers. Details include a $25 diagnostic fee and a rate of $45 per hour plus materials. More about the service is available on the PDF of the official anouncement.

A more recent announcement puts Burlington among the few communities with citywide access to a gig. Burlington Telecom is in the midst of upgrades and will be offering 1 Gbps service and 40 Mbps service starting on December 1, 2012. Both options are symmetrical.

40 Mbps - $99.99 per month

1 Gbps - $149.99 per month when committing for one year; or $199.99 per month with a month-to-month arrangement

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View a PDF of the official announcement flyer.

A gig for $150 to residential connections is one of the best deals we have seen in the nation and is far superior to what FairPoint DSL or Comcast Cable offer in town.

Community Broadband Bits 9 - Leslie Nulty with ECFiber in Vermont

The ninth episode of the Community Broadband Bits podcast features Leslie Nulty, from the East Central Vermont Fiber Optic Network, commonly called ECFiber. ECFiber is using a unique financing arrangement, wherein debt is sold to those in the community as the network slowly expands. They have already raised over $1 million dollars and are providing services in three towns.

The network is ultimately owned by the 23 towns that joined together to form the initiative. Leslie explains the history behind the network, the financing approach, and some lessons for others who want to duplicate it.

Leslie has also just appeared on Gigabit Nation along with her husband, Tim Nulty, to discuss their approach.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 25 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here.

Thanks to Fit and the Conniptions for the music, licensed using Creative Commons.

Vermont Network Takes Local Ownership to Next Level

Vermont's East Central Fiber-Optic Network (ECFiber) has finished its second round of financing. We noted that the network had exceeded its financing goals at the beginning of this year by raising over $1 million and subsequently began connecting rural homes with its next-generation network. (See all of our ECFiber coverage here.)

The network is now connecting 120 households, a bit below its goal of 164 for the end of the calendar year... but it also had to deal with an unexpected hurricane (Irene) that seriously disrupted the entire state and kept fiber-splicers running ragged.

ECFiber has just completed its second round of financing. While the first round was dominated by a few major investors, the second round had a broader base -- a sign that many in the community have embraced the approach. From the ECFiber press release:

ECFiber is using an innovative funding method to extend its network, supported by local citizens who lend funds that enable build-out to local neighborhoods within and across member towns. Citizens who invest as little as $2500 allow ECFiber to reach all households along designated routes. ECFiber determines where it will build by choosing routes that reach the greatest number of unserved businesses and households, which are then connected to ECFiber’s state-of-the-art fiber-optic service.

These people are literally investing in themselves. ECFiber is an InterLocal Contract with a Governing Board composed of a representiative from each member town (of which there are 23). Investors are purchasing tax exempt 15 year promissory notes that effectively earn 6% interest (due to the one year holiday from interest and principal).

They have raised $340,000 in this round of financing, which will allow the network to pass 60-65% of Barnard's 950 residents. Spokesman Bob Merrill said the network again surpassed its expectations of investor interest and noted that several neighborhoods came on board after one or two interested residents rallied neighbors to invest so they could finally have high-speed connections to the Internet.

The network remains committed to connecting every person in the 23-town area but absent outside financing, it will take another 10 years.

EC Fiber is offering telephone services and Internet access. Though the network does pass some areas where people already have service, ECFiber remains focused on the unserved areas. People in unserved areas presently have to deal with dial-up (over neglected phone lines owned by FairPoint) or satellite connections.

The November-December newsletter offers more details about the network, including the extended battery options that ECFiber offers that will extend the time phones will work in the event of an extended power outage. (FTTH networks do not supply their own power, as do copper telephone lines.)

ECFiber's services and pricing sheet is available here. The prices are higher than those typically found in metro areas, which reflects the higher cost (but not unmanagebly so) of building network in these areas of extremely low density.

Burlington Telecom Partners to Increase Digital Inclusion

On its facebook page, Burlington Telecom has announced a partnership with ReSOURCE, a local nonprofit, that will make refurbished computers available to qualified Burlington families.  

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A Survey of National Private Sector Broadband Providers

When it comes to expanding access to the Internet across the US, the federal government has long looked first to the private sector, ignoring hundreds of years of experience showing that unaccountable private companies cannot be trusted to sufficiently invest in or govern essential infrastructure.

Inevitably, they price access to high and invest too little as they maxmize their profits -- thereby minimizing the profits of all other parts of the economy.

So let's take a little survey of the progress we see from these companies.

We have long railed against the Verizon -> FairPoint fiasco in New England that left Verizon much richer at the expense of residents and businesses in rural Vermont, New Hampshire, and Maine particularly. Well, FairPoint creditors have realized the depth of Verizon's scam and are suing Verizon for $2 billion. Read the complaint [pdf].

According to the complaint (pdf), Verizon not only made out like a financial bandit up front, but took advantage of regulatory delays to strip mine the assets of anything of value, including core IP network components, business services, and localized billing and support assets required to support the three states. Verizon then billed out their support assistance for millions per month during the very rocky transition, during which time 911 and other services saw repeated outages, resulting in millions more in refund penalties.

Karl Bode is right to criticize the state authorities that allowed this fiasco to occur. Their inability to regulate in the public interest has hurt everyone stuck in the mess. While we can expect powerful companies like Verizon to try to game the system at every opportunity, there is no excuse for making it so easy for them.

Frontier Logo

As long as we are talking about Verizon shedding its rural investments, let's take a look at how Frontier is doing since it inherited thousands upon thousands of FiOS customers as part of its recent deal with Verizon. Frontier has decided the best approach is to transition those customers from the next-generation FTTH network to an older, slower, less reliable, DSL alternative. Find me another country where a major company is moving customers away from fiber-optic connections. This is a national embarrassment.

Rather than investing in better technology, Frontier has literally doubled down on DSL by marketing a second DSL line to customers. Connect one computer to one line and the TV/video game unit to another one. Of course, it turns out they are lying (or incompetent) when it comes to how much they are charging for it...

In other words, that $13.50 1.5 Mbps (if you're lucky) DSL line is actually closer to a $50 1.5 Mbps DSL line once Frontier gets done slamming you with additional fees. These kinds of below-the-line fees have been a mainstay at phone companies for decades, essentially allowing them to engage in false advertising and covertly jack up the advertised price post sale. It's a practice that has yet to see any real attention of regulators, even those ceaselessly professing dedication to "transparency." It helps that Frontier serves a lot of uncompetitive markets where users have no other options, resulting in "deals" like this one.

Let's move on to the nation's largest cable company, Comcast. We recently noted Comcast's dubious distinction as the least trusted company in America. It was simultaneously the second least trusted. I'm guessing we won't see that award plastered on the side of the vehicles their poorly compensated contractors drive around.

Comcast Logo

Occupy Philly, the City of Brotherly Love offshoot of Occupy Wall Street, recently demonstrated at the Comcast Center to bring attention to Comcast's corporate tax dodging. Hey -- I thought Comcast routinely said it wasn't fair that non-profit entities don't pay taxes!

Finally, the big cable companies in general have been singled out in a study showing that Americans lost $38 billion in wages last year while waiting for technicians and delivery people. Cable companies were the worst at making people wait - prompting one person to say "SCAMCAST should be their name."

There is plenty more of examples like the above, but I'm done writing about them today. Just recall that the federal government prefers that this group of unaccountable corporations build, own, and operate the most important utility of the 21st century. We prefer local ownership that is accountable to communities. Time Warner Cable has actually been sued for its terrible customer service!

Citibank Finally Files Suit Against Burlington Telecom

After more than a year of expecting Citibank to file suit against Burlington, they finally did. Burlington Telecom, a muni FTTH network, now illustrates the worst case scenario for muni broadband. After the founder of the network left following disagreements with the Mayor, the Mayor's Administration ran the network into the ground (leading us to recently publish the report "Learning from Burlington Telecom: Some Lessons for Community Networks."

Burlington had financed its network with a municipal capital lease, rather than the more commonly used revenue bonds, meaning that the actual network secures the loan. In this arrangement, the network is technically owned by the lender (Citi) and Burlington leased it. So when Burlington decided to stop paying the lease for the network, it became Citi's problem.

And Citi had a lot of problems due to the games massive banks were playing having killed the economy. BT became just one more non-performing asset. They did nothing while the City continued to run the network without making lease payments. Now Citi is suing for the world (this is how these things work) but it isn't clear that Citi can actually get what it demands (the State has a say in whether the network simply gets shut down, which Citi is presently asking for). And if the network did get shut down, Citi would be in a worse position to recover any of its losses because the value of the network is far greater than the sum of its parts.

State law says that losses from a public telecom venture cannot be carried by taxpayers, which is where we return to an interesting document prepared by the Mayor's Administration. As reported by Blurt:

In its lawsuit, Citibank notes that a letter written by attorney Joe McNeil on behalf of Burlington "expressly warranted to Citibank that at least 40 percent of Burlington's revenues were derived from sources other than taxpayers' funds and would be available to fund payments to Citibank, and further, that Burlington had the financial resources and ability to make all payments to Citibank for the full term of the agreement."

I read that document last year and remember being fairly surprised as it appeared to be incorrect from my non-lawyer reading of the law. This is just another case in which the Mayor's Administration played too fast and loose with essential infrastructure.

We have watched in dismay as Burlington Telecom transitioned over the past four years from a model community network to the worst case scenario. This situation proves only that community networks can suffer from bad management in some of the many ways private telecom companies can suffer from bad management (resulting in anything from bankruptcy to prison).

Communities can learn lessons from Burlington's situation -- chief among them that transparency is important. As with other public enterprise funds, the operation should be regularly audited and oversight must be in place to catch errors early, when corrections are easier and less costly.

Unfortunately, Burlington Telecom is in a very bad position presently. The actions of the Mayor's Administration made that position worse than it could have been. Time will tell if it can be saved. Given its important positive contributions to the city (millions of dollars in community savings, increased economic development), the City would benefit from its continued operation.

EC Fiber is Officially Live in Vermont

This has been a great month for communities building their own high capacity broadband networks in New England. Wired West in rural Massachusetts has formalized its coop of communities. Just last Friday, we wrote about the East Central Vermont Community Fiber network in beta. As of last night, EC Fiber is out of beta and officially live! Those interested can sign up at MyECFiber.net. Last night, they issued this press release:

SOUTH ROYALTON – Having completed its beta testing, and with the Phase I project nearly complete, ECFiber began connecting its first customers today. Eight customers have been beta-testing the system for the past two weeks, getting sustained 5Mbps symmetrical service.

The Barnard General Store, one of the beta sites, has been offering the experience to customers via WI-FI, and has been finding folks on their doorstep at all hours, trying out the system.

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“It’s been amazing,” says Kim Furlong, one of the store’s proprietors. “Because so much more of what we do is online, it is truly a joy to reap the reward of high-speed internet. Dial-up, and even satellite, is such a time-robber. Fiber is very different – you can be more efficient, and that is exciting. At the same time, I have some trepidation. People are going to relocate here more permanently because of what is available, and that is probably going to change the fabric of the community.”

According to Project Coordinator Leslie Nulty, 15 new accounts were opened within the first 24 hours after the doorstep delivery of information packets. Barnard Academy, another beta site, is also very excited about the service. They are planning an open house and community celebration of ECFiber’s arrival in mid-October.

Barnard was chosen for the Phase I project because of its proximity to the central office and its large number of unserved users. Pre-registrations topped 90% before the project started. Phase II, to build out the rest of the town of Barnard, is in the planning stages, with an informational meeting set for Thursday night at 7PM at the Barnard Town Hall.