Burlington’s Sinking Muni Fiber Project

December 1st, 2010 by · Leave a Comment

What the heck is happening up in Burlington, Vermont?  Their municipal fiber effort, Burlington Telecom, is behind on its loan payments and is about to have its equipment repossessed by CitiCapital.  The city has already been scolded for sinking $17M of taxpayer money into the project without telling anyone, so there's not likely to be more coming from that source.  So what does a municipal fiber project do when runs out of money and its equipment gets repossessed?  Install new equipment of course!  According to Mayor Kiss:

"We think we'll be able to actually replace the equipment that will be given to CitiCapital with new equipment, so we can be able to continue Burlington Telecom services"

No money, wary lenders watching CitiCapital cut their losses, pissed off citizens who didn't even know about the last $17M...  This I gotta see.  Maybe routers grow on trees up north. 

If that weren't all, an independent audit that was said to be ready has turned out not to be so, rather they are preparing to redact its supporting information such that the company's competitive position isn't impacted.  It's sort of hard to figure out what protection such redactions can give to a telecom that doesn't have equipment (or soon won't anyway).  But apparently, the usual rules don't apply in the Green Mountain state.  Fairpoint's looking pretty good now, in a relative kind of way.

Sounds to me like there's going to be some muni fiber for sale real soon.

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Categories: Financials · FTTH

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