Submitted by acohill on Wed, 12/22/2010 - 10:16
The always excellent Muni Networks has an article that sheds additional light on Burlington Telecom. The article includes a response from Tim Nulty, who helped start the BT venture.
Nulty sheds some light on the early take rate targets; BT had financial plan pegged to meeting take rate projections, and the network was meeting those take rates. The financial pro formas Nulty was using shows that BT was on track not only to cover operating expenses but to begin paying back the borrowed funds. But inexplicably, after Nulty left, the marketing effort that was in place and was meeting take rate targets was dropped. Predictably, the number of new customers being added also dropped, and at that point, the project began sliding downhill financially.
This is Nulty's side of the story, and there are still several other points of view. But Nulty's explanation rings true and sheds some light on what may have happened. A good marketing effort is critical, and it has to be sustained over time. Community networks that take a field of dreams approach to marketing, "If we build it and then just sit back and wait for customers" will have trouble meeting financial targets, just as any other business.
Community-owned telecom infrastructure cannot be treated like sidewalks--you build and let it sit for thirty years. Governing boards and senior staff have to have a solid business plan and demonstrated experience managing substantial business enterprises. A community broadband network cannot be treated like a typical nonprofit-- which typically have a narrow mission and no paying customers.
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