Editor’s note: This commentary is by Steve May, who is a clinical social worker and a member of the Selectboard in Richmond where he resides. He was a Progressive and Democratic candidate for a House seat in 2016.
[T]he sale of Burlington Telecom and the circumstances that resulted in the sale of a considerable portion of the Vermont telecommunications infrastructure should raise concerns well beyond the Queen City. A major portion of the electronic Commons has gone from public control to private hands. It is a question of some debate as to whether that is a good thing or not.
The Keep Burlington Telecom Local proposal was, at its core, a user’s cooperative where day-to-day control was to have been left in the hands of the consumers who were contracting for services with the utility. By turning to the ZRF/Schurz proposal, the Burlington City Council may have made individual stakeholders whole, but the needs of ratepayers were made secondary. This deal moved concerns for corporate governance from the public square to the smoke-filled room. BT is now a private concern held by a conglomerate whose interests may or may not be similar to those of Burlington residents.
Presumably ZRF/Schurz’s primary concern as a private venture is profitability. Even as a privately held business, it still needs to please its equity partners. By comparison, a co-op or public utility would have been motivated by the needs of its member ratepayers. The distinction could not be more profound.
The stranded assets, the system, the fiber optics and the information technology architecture must be considered in context. In light of the choices made by the Burlington City Council, it is clear that they prioritized paying off their consultants at the expense of their constituents.
Be clear that a piece of the Commons was auctioned off here. This must never be allowed to happen to any Vermonter ever again. This is critical infrastructure. If you think a privately run prison or a privately run highway is a bad idea, why would you ever support the idea of selling the entire IT architecture of the city of Burlington to a concern that says: “You don’t really know us, but we are strangers here and we are taking over.” If there are problems down the line, there is little to no opportunity for the public to affect the business’ behavior.
So we are left hoping for the best. Burlington residents deserve more than just a hope and a prayer.
What recourse does the public have? Go to a public service board which has, over time, shown itself to be incredibly friendly to corporate and business interests in the face of routine advocacy concerns from members of the public and others? The consequences of the Burlington City Council’s choice are precedent-setting.
Utilities are custodians. They are granted authority to provide a service for a period of time. The service is what ratepayers are contracting for. In order to provide that service the utility exercises dominion over the infrastructure necessary to provide the service. The infrastructure itself historically has belonged to the public and remained as part of the Commons as critical infrastructure that is owned collectively by the public.
We need to reaffirm the importance of the Commons, especially as it applies to utilities. These commercial concerns are usually publicly traded corporations. They are by their very nature operating in a failsafe financial environment where they can’t help but make a profit, either having been granted a monopoly or other very favorable financial environment. The lack of competition and the fact that most are publicly traded corporations means that investors are prioritized over ratepayers, due to their fiduciary responsibility to investors.
Swinging the scale back in the public’s direction requires new thinking. Our financial situation should reflect the central role the public plays as owner of the infrastructure facilitating the generation of wealth for large financial concerns like utilities. These corporations should participate in a universal basic income plan by placing 1 percent of their preferred stock into a fund annually, which will deliver a dividend to all Vermonters. Depending on what you consider a utility and market volatility will determine what the actual cost to the utilities on a year-to-year basis would be. What isn’t variable is the concept that ratepayers deserve to be compensated for the role they play in facilitating the financial success of these enterprises.
One percent annually is significant but not onerous; the wealth it would return to ordinary Vermonters, on the other hand, would be deeply meaningful. To that end, seeding a Vermont sovereign wealth fund for the purpose of yielding a universal basic income dividend through the utility companies’ contributions of 1 percent preferred stock annually would return ratepayers to the front of the line as stockholders would affirm the importance of commonly held public infrastructure in the Vermont economy.
A basic income dividend based on the wealth generated by a utility, which then has a fiduciary responsibility to taxpayers, the very same ratepayers who created in some measure the wealth for the utility makes dollars and sense. This model can be used in dealing with utilities across the economy as circumstances might require. But, more importantly, it restores balance. These commodities, like the fiber optic system that has been created in Burlington, are fundamentally public and they again have been entrusted with their care for a set period of time. As a matter of public policy we must recognize that these conveyances are public assets, and the enterprises that exercise control over them do so in the public interest. That public interest should be tangible in the form of an annual payment back to every Vermonter. One percent for Vermont really isn’t too much to ask.
