Where dinosaurs still roam

Martha Abbott, chair of Vermont’s Progressive Party, argues that the state Public Service Board should

look at the option of land-based service being a publicly owned and operated utility, part of the telecommunications utility which the Vermont Legislature is establishing to bring high-speed Internet service to the state.

That is, the state should take over a dying industry and use it to subsidize and support a growing industry. I’m, as usual, confused as to how that is supposed to work.

Land lines telecommunications (the ones that hook your phone up to a wire—you know, the kind us old folks grew up with courtesy of Ma Bell) represent a dying industry. More and more people are simply giving up their land lines and going cellular. Verizon is losing land line customers in Vermont and elsewhere. Most people under the age of about 25 or 30 (that is, a good chunk of the Progressive Party’s base) grew up with cell phones and see no need to be tethered to a wire.

Ms. Abbott wants the state to take over this business from Verizon. Verizon recognizes where their business is going and wants to get out of a declining business and devote its resources to the future—wireless telephones and high-speed wired broadband in urban areas.

 Fairpoint Communications, the small company that is trying to buy Verizon’s northern New England land lines, thinks it can make a go of it. I’m not sure how they can manage this, especially given their goal of increasing Vermonters’ access to high speed internet service, but some history tells me what they must do.

Before about 1980, large parts of the U.S.economy were heavily regulated. The result was high prices and low levels of innovation. Since then, we’ve deregulated airlines, trucks, railroads, telecommunications (remember up through the 1970s, when you could only buy rent a phone (your choice of black or white) and there was no such thing as an answering machine?), parts of the electricity industry, and more. The result has been an explosion of choices, new technologies, and benefits to consumers.

Under regulation, costs were high since there was little incentive for firms to try to control them—regulators (or the lack of competition) just allowed them to pass on higher costs to consumers in the form of higher prices (also think the auto or steel industry before international competition forced them to compete). We still see that in the land line business. My guess is that however much they protest that it won’t happen, the pressures of competition (from wireless services) will force Fairpoint to reduce labor costs to their competitive level, which means wages less than Verizon’s employees earn today.

Given that organized, and unorganized, labor is who the Progressive Party tries to attract and support, it’s not surprising that the Party’s line is opposed to Fairpoint’s purchase of Verizon.   But how Ms. Abbott thinks that state ownership can deliver better and cheaper phone service to Vermonters with land lines is beyond me. All over the world nations have been privatizing their telephone services, benefiting consumers and business users.  To paraphrase the old saying, as goes the world, so doesn’t go Vermont.

Comments

[Mike Oltedal]

Recently the state of Vermont has been informing town and county officials as to what options
are being offered under The Vermont Way Forward, The Nations First E-state. I am sending
this e-mail to inform all of you ( town and county officials as well as members of the VLCT)
one option was not mentioned. That option would be - TOWN OWNERSHIP OF A FIBER
OPTICS TO THE HOME NETWORK (FTTH). Town ownership could generate funds for the TOWN
if done properly.
A town owned network can supply to its citizens an affordable pipe line for high speed Internet , telephone, television,
WiFI hotspots and future FWA (fixed wireless access) or mobile (cellular) services.
Each service that would run over the towns network, would have to "rent" space from the town to provide
a service to an end user.
Future wireless company's that are in operation now may want to join your network as fiber optics
can supply the bandwith needed for their customers needs.
As stated in the Vermont Way Forward: The Nations First E-State. It claims the State will be looking to
cover its costs by State owned networks (fiber and wireless). The towns can do the same and keep
some local control over a network that can provide equal coverage for all its citizens
while keeping services affordable.
To find out more about FTTH look to what the City of Burlington has done !
You will see that this option is working for them , In the smaller Towns and Cities of Vermont, You should
think of combining towns to form a coalition, thus making it a more viable option for your town.
Other towns throughout the state have formally agreed with Burlington
to enter into discussions/negotiations about an FTTH partnership and the list is getting bigger everyday.
The offerings your town can bring are not limited to one provider or service, However the
offerings of Burlington Telecom would be hard to compete with should it go to bid.

Please See the following link
HTTP:// www. burlingtontelecom.com

please e-mail Mike at navigate@sover.net for more information .