Thoughts on Burlington Telecom Crisis

Burlington Telecom

I believe that Burlington Telecom’s current financial situation is a concern for the City of Burlington’s economic health.  The city already has so much on it’s plate, I don’t think that it needs the extra burden of trying to keep a risky upstart afloat in an extremely competitive industry such as telecommunications.
 
As the telecommunications industry seems to be an ever-changing one with many players crossing into each other’s markets (increasing competition from other phone, traditional cable, satellite tv, wireless phone, and even internet companies).  How can a small local firm be expected to continue making the huge investments needed to keep up and why is it necessary to the city’s future?
 
There are two options I can see that would be fair to everyone involved…
 
1. Burlington Telecom should repay the loan back to the city of Burlington.  Burlington Telecom could then issue bonds to the public market and then use the money to both pay of the loan and continue their work.  Then, Burlington Telecom could be spun off to become a completely private entity… perhaps even allow the current users of Burlington Telecom to take stakes in it to possibly become a COOP like City Market.
 
2. Alternatively, if Burlington Telecom must stay as part of the city government, they should meet their obligations as they agreed to.  They should repay the loan, seek financing outside the city government and continue to build out within Burlington first. If they succeed there, then they could be given permission to expand their services beyond Burlington.  If Burlington taxpayers or city employees/elected officials time are going to be used for the benefit of Burlington Telecom, then ALL residents of Burlington that are paying taxes to the benefit of BT should have access to BT’s services before residents of other towns do.  It’s only fair.
 
Either solution should require the risk to be shifted from the city government to outside private interests and most likely should involve an increase in the service rates that customers pay to allow Burlington Telecom to have some chance of being sustainable.

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2 Responses to Thoughts on Burlington Telecom Crisis

  • The numbers speak for them selves. BT will not be able to stay in business with the current financing or the new financing.

    Competition and capital improvements in the next ten year will be overwhelming for BT. Ben Webers recent my turns article in the free press is an example of someone who is in the business and knows the numbers.

    We need more people like Ben looking at the business before any new financing is approved.
    David G

  • It certainly looks like BT will have difficulty competing, as any telecom does. However, there are many that are intent on continuing with it. Whatever happens, it’s important to try to shield the taxpayers and others that don’t want to be a part of it from any potential loss.

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