The legacy of Bob Kiss, the former mayor of Burlington, VT, is becoming more deeply etched in stone as the years go by. The fine work done under his administration in the funneling $17,000,000 of taxpayer dollars to the failing municipal telecom, Burlington Telecom, has rippled into levels of blowback that put the city’s bond rating at risk of being downgraded to “junk” status.
Now that’s something to celebrate, Burlington! From Bloomberg:
With a mediator unable last month to settle a lawsuit by a Citigroup Inc. unit over the Internet project, Moody’s Investors Service is warning that the city of 42,000 risks being downgraded to junk. Dean Sandros at Meridian, Idaho-based United Heritage Life Insurance is considering parting with his Burlington holdings.
“It might be time to take a gain and be done with them,” said Sandros, who oversees $400 million in munis.
It might also be time to be done with Progressive experimentalism involving millions of dollars that those in office did not earn themselves. City administrations do not exist to enter into markets, they exist to pave the roads, manage the schools, fire, police – but building a municipal telecom does not seem to rise to the level of an answer to a question no one was asking, other than Progressives themselves.
Unfortunately for Mayor Miro Weinberger, he’s left to deal with it, but even a little more honesty here would go a long way to earning the taxpayers’ support:
“Considerably more was spent to build out the system than had been initially projected,” said Mayor Miro Weinberger, a 43-year-old Democrat elected last year. “There’s been real criticism about how that spending was done.” Subscriber levels never met forecasts, he said, while declining to provide details.
I disagree. The details are not that complicated. In fact, someone who is good at estimating costs, like a cost estimator, for example, could have projected the installation and operating costs quite accurately. It’s not like cable infrastructure deployment is a brand-new activity whose cost can’t be easily modeled. The same goes for the revenue stream.
What Weinberger is missing is not so much the cost issues, but the revenues that never materialized. The City couldn’t get enough subscribers to BT’s service. It’s that simple. BT could not seem to entice the market to switch to its substitute product at almost the exact same price point as their current telecom providers. Which shouldn’t be surprising, because if you’re offering a similar product at the same price, why switch?
The idea behind BT was that if the profits could be removed from the pricing structure, the lower price would bring in more subscribers (because obviously profits are enormous, obscene, and to be avoided at all non-
taxpayer-supported costs). BT was never able to do that, even with massive cash infusions from the City. Simply put, BT could not compete.
Neither can Progressive ideas in the marketplace, which is why the bulk of Progressivism is bound up tightly in subsidies and transfer payments, which skew markets, and are the hallmark of 19th-century thinking.
So, why, again, do they call themselves “Progressives”?