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Institute for Local Self-Reliance
1313 Fifth Street SE, Suite 303, Minneapolis, MN 55414
www.newrules.org
CONTACT: Christopher Mitchell, 612-379-3815 x209
christopher@ilsr.org
by Christopher Mitchell, Director, Telecommunications as Commons Initiative, August 2007
Executive Summary
In the modern world, broadband information networks are essential infrastructure, a combination of the past’s canals, telegraph wires, interstate highways, and airports. Unfortunately, other developed countries offer faster networks at cheaper prices to their businesses and citizens. Few disagree that the United States must solve this broadband problem.
This case study shows how one city did it. No private company was willing to build the high-speed information network Burlington, Vermont, needed on the timeline it wanted. Rather than hope and wait, they’re building it themselves. After their original plan collapsed, they persevered and developed a different model, using a tax-exempt municipal capital lease arrangement with an outside investor. The City will have direct ownership within 15 years; they already have complete control.
By mid 2008, all residents will be able to connect to a citywide fiber-optic network run by Burlington Telecom, a new city department. All government buildings and 1,800 other subscribers already use the network.
The publicly owned network is open access. As with roads, any service provider can use the network on the same terms, enabling true competition. It is universal; no neighborhoods were deemed unworthy for being connected. BT’s services come ala carte or in packages, from symmetrical high speed Internet access to an affordable triple play package (TV, voice, and Internet) for $45/month.
Perhaps most importantly, the community controls the network. It will be maintained and upgraded to fit the needs of Burlingtonians, not distant shareholders. The City projects that the net income from the network will provide 20 percent of its general fund after the debt is retired. Schools are already benefiting; they now pay nothing for their bandwidth. Businesses are paying less for faster connections. And BT is talking with nearby towns about partnering with them to solve their own broadband problems.
Building a fiber network is well within the competency of local governments. Hundreds of communities already own networks. Hundreds more are considering their options; each would do well to examine Burlington’s model.
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