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Hong Kong Broadband Network Cuts Price in Half – 100Mbps Service for $13 A Month

Phillip Dampier November 2, 2009 Broadband Speed, Competition, Video 9 Comments

Hong Kong Broadband Network, the wholly owned subsidiary of City Telecom, has just slashed the price for its 100Mbps “bb100” fiber optic broadband service.  When a customer finds a friend willing to sign up, both will receive the broadband service for $13 US per month for 24 months, which represents a 50% discount for each customer.

At this price, Hong Kong residents pay just $0.06/megabit-per-second, which includes a speed guarantee that customers will receive at least 80% of advertised speed when surfing domestic websites.

William Yeung, Chief Executive Officer of HKBN noted that at least 32% of Internet users in Hong Kong suffer from broadband speeds below 10Mbps, and the Hong Kong special administrative region of the People’s Republic of China lags behind Korea and Japan in terms of fiber to the home service, something Yeung would like to see changed.

He considers Hong Kong’s broadband development rating “comfortably enjoying today’s applications” to be inadequate, and wants to see Hong Kong have universal access to 100Mbps or greater speed broadband.

“Being the second largest broadband service provider, we have a duty to improve Hong Kong’s global standings,” Yeung said.

HKBN provides speeds up to 1Gbps in Hong Kong over its fiber optic network.  Hong Kong’s broadband ranking is important to the region for economic reasons, attracting new industry and high paying technology jobs with fast, affordable broadband service.

What Hong Kong considers inadequate is still well ahead of the United States, which continues to lag behind several Asian nations in constructing advanced high speed broadband platforms.

Hong Kong’s population density, which poses a challenge for some services, is actually a benefit for telecommunications, because construction costs are lower when wiring densely populated multi-dwelling units and apartments.

The company currently has 391,000 broadband customers, attracted to the company in part by their creative advertising campaigns.

[flv]http://www.phillipdampier.com/video/HKBN Member Get Member Promotion.flv[/flv]

HKBN makes Hong Kong’s population density a net plus for fast, affordable broadband.  William Yeung announces “Member Get Member Promotion” from HKBN and unveils new advertising campaign. (3 minutes)

Several weeks ago, Stop the Cap! included several HKBN ads for your review.  We’ve now obtained English subtitled copies to share, below the jump.

… Continue Reading

Cable In Denial: Phooey on FiOS – Cable Industry Downplays Fiber Optics At Cable Expo

Phillip Dampier October 29, 2009 Broadband Speed, Data Caps, Video 3 Comments

It’s appropriate that it is snowing heavily in Denver as attendees of the Society of Cable Telecommunications Engineers meet at Cable-Tec Expo ’09, under the banner “Touch the Technology.”

Yesterday’s Technology Leadership Roundtable, according to Lightwave’s Steven Hardy, was reserved for out of touch Verizon fiber bashing:

The title of this morning’s Technology Leadership Roundtable was “Enough Already!” “Enough of what?” you ask. Answers the roundtable description: “Growing a little weary of all that FiOS in your face?” The short answer, not surprisingly, is yes. Roundtable moderator Leslie Ellis (Ellis Edits LLC) opened the discussion by asking whether the cable-TV community should be defensive about the fact that it hasn’t fully embraced FTTH — particularly since the industry invented video over fiber and carries more video over fiber than anyone else.

Much pooh-poohing of FTTH and telcos ensued. Paul Liao, president and CEO of CableLabs, said that the MSOs are the big dogs when it comes to video and becoming big dogs in voice delivery — and when you’re a big dog, you’re going to attract competitive attention.

Dermot O’Carroll, SVP, engineering and network operations, at Rogers Cable Communications up in Canada, asserted that fiber “doesn’t do much” for voice or video (I assume he meant fiber access versus HFC) and perhaps only a little bit when it comes to Internet access. This last shortfall should go away with deployment of DOCSIS 3.0, he said.

Liao agreed that DOCSIS 3.0-enabled HFC should prove more than adequate for customer needs today and into the future, adding that DOCSIS 3.0 should enable more bandwidth than anyone will ever need. (This sounds like one of those “eat your words in 10 years or less” statements, but Liao is certainly smarter than I am and more versed in DOCSIS 3.0 capabilities.)

Meanwhile, at least two workshops later in the week will discuss how to migrate HFC networks to FTTH. It doesn’t hurt to hedge your bets, apparently. Getting a better understanding of how MSOs really feel about FTTH is one of my goals here.

The cable industry has routinely confronted the threat of fiber optics by dismissing it as irrelevant wizardry until they are forced to upgrade their networks to try and match the capabilities a well run fiber to the home system can provide.  Broadband service with equal upload and download speeds on cable?  Not so much.  The sheer bandwidth potential of fiber optics?  Quite nice, thank you.  The potential for Verizon FiOS to be positioned to meet the current and future needs of customers without a lot of expensive upgrades?  Very high, assuming it’s priced competitively.


Fiber bashing snowjob from Time Warner Cable

Rogers Cable has a point when they dismiss fiber’s potential for broadband.  That’s because the company treats its customers to a host of Internet Overcharging schemes which provide blazing fast speeds that customers can’t use for very long without facing overlimit charges on next month’s bill.  Few companies want to provide robust video broadband service in a country where such usage limits and other schemes prevail from Vancouver to St. John’s.

Municipalities: If You Threaten to Build It Yourself, Your Faster Speeds Will Come

LUS Fiber - Lafayette, Louisiana's public utility municipal broadband provider, offers fast speeds with great rates

LUS Fiber - Lafayette, Louisiana's public utility municipal broadband provider, offers fast speeds with great rates

Frustrated communities across America, take note.

If your town or city government starts making serious noises about constructing your own, municipally-owned broadband network (especially one built with fiber optics to the home), existing providers who have repeatedly said “no” to requests for faster service at more reasonable prices have a track record of quickly turning around and saying, “yes — why didn’t you ask us before?”

Big existing telecommunications players loathe the thought of facing a new competitor in their midst.  They are accustomed to the usual arrangement of one cable operator and one phone company.  Cable companies provide cable modem service, phone companies mostly provide DSL.  In smaller cities, and where a competitor is missing (or provides a lower quality service), there is almost no drive to upgrade.  Cable will set speeds just above what the phone company is offering, and both will co-exist happily ever after.

For communities being bypassed by the fiber revolution now underway by Verizon, and to a lesser degree AT&T, requests from civic leaders, businesses, and consumers for upgraded service fall on deaf ears.  ‘What you have now is good enough for this market, so be quiet and be lucky we give you what you’ve got now.  Oh, and we’re raising rates, too.’

In Rochester, the one upstate New York city not on the “to-do” list of Verizon (which is merrily wiring urban and suburban communities across their service areas with fiber optic cable FiOS), Time Warner Cable sees little incentive to raise speeds or upgrade to DOCSIS 3 with a phone company competitor that has no apparent plans to move beyond traditional old school DSL service.  Where FiOS does threaten, Time Warner Cable is in a hurry to provide “wideband” broadband as quickly as possible.

In Wilson, North Carolina, years of pleading from local officials to provide something beyond anemic broadband in their community was met with yawns from Time Warner Cable and Embarq, the local phone company.  Wilson decided to build their own municipal fiber network, offering faster speeds at better pricing.  Time Warner and Embarq did what most existing competitors do — they moved through the Four Stages of Telecommunications Competition Grief:

1) Behind the Scenes Threats and Anger: Companies work the phones with local officials trying to browbeat them into dropping the plans to construct municipal broadband, try to gin up partisan opposition, issue overinflated cost estimates, issue warnings about the trouble they’ll cause local politicians who support such initiatives, and snow a blizzard of documents illustrating how wonderful and reasonable their existing service is;

2) Stall Tactics Through Negotiation: Once home office is notified, a series of negotiations to attempt to forestall the project begins, such as throwing crumbs for incrementally better service, offers to build showcase mini-projects that represent a “win” for local politicians, or “looks good on paper” concessions that end up amounting to far less.  Most of these discussions are designed simply to stall to allow the company to prepare for stage three.

3) PR and Legal Blitzkrieg: Assuming local officials haven’t been discouraged away from their idea, or dropped it after starring in a company-sponsored press event – ribbon cutting a small wi-fi or school connectivity project, the next stage is a multi-front battle involving company legal teams filing lawsuits to delay or kill projects, public relations and astroturf lobbying efforts to distort issues and build public opposition, legislative maneuverings to make such projects untenable through industry-friendly laws, and often vague promises about impending upgrades making the entire project unnecessary.

4) Acceptance, Competition, and Better Service: The final stage is the realization consumers don’t always get suckered by astroturf groups and company scare tactics.  They accept the project is moving forward, and send out the press release saying they welcome the competition and are announcing their own significant service upgrade because “customers asked for it.”  Price increases slow, speeds increase, and service improves, all because of the reality that an aggressive competitor is in their future.

Wilson city officials tried negotiations for better service, got nowhere, and had to fight back against a blizzard of nonsense from the telecommunications industry trying to legislate such projects out of existence with changes to state law.  Americans for Prosperity, an astroturf group, even hassled residents in other nearby communities with robocalls to try and stop similar projects.

The arrival of Wilson’s Greenlight service, which offers speeds far faster than Time Warner and Embarq ever did, at lower prices, was a shock to Time Warner’s call centers.  As customers canceled, representatives taking those calls were in denial residents were actually achieving the speeds Time Warner failed to deliver.

[flv]http://www.phillipdampier.com/video/Chattanooga Builds Fiber Network.flv[/flv]

Chattanooga’s public power utility fought back against telecommunication company propaganda to construct fiber to the home service across the city, which launched this year. (5 minutes)

In Monticello, Minnesota, local telephone company TDS had spent years refusing requests to improve service in the city.  Speed and access issues plagued the community, northwest of Minneapolis.  Local officials had enough and voted to construct their own fiber to the home municipal network.

Enter the four stages.  TDS started by telling city officials the company’s network was state of the art for Monticello, and couldn’t be immediately improved because there was insufficient return on investment.  Companies want to be assured they are paid back for investments they make, and because Monticello is a relatively small city, there were questions whether the costs for a fiber network would be paid back quickly enough through revenues.

When that didn’t work, the company sued the city as a stalling tactic.  Despite the fact Monticello won case after case, TDS kept filing.  A full assault by large telecommunications interests also began, trying to gin up public opposition.  While the project was approved by voters, and Monticello was tied up in court, TDS quickly moved to stage four and started rapidly building their own fiber network in Monticello, actually putting down fiber the city was prohibited to wire themselves as the lawsuits dragged through the courts.

The company told Ars Technica that despite its earlier refusals to provide fiber service, TDS didn’t act earlier because it didn’t actually know that people really, really wanted fiber; once the referendum was a success, the company moved quickly to give people what it now knew they wanted.

Then, in June, the company said with the advent of its own fiber network, the city of Monticello should back away from constructing theirs, because its economic viability report was partly premised on the fact TDS refused to provide that service.

To underline that, TDS’ new fiber network doubled customer speeds to 50Mbps, trying to keep customers from taking their business to  FiberNet Monticello.

[flv]http://www.phillipdampier.com/video/Vote Yes on Fiber.mp4[/flv]

Lafayette staged a multi-year battle with Cox and other providers to bring municipal fiber broadband to it’s corner of Louisiana.  This 30 second ad promoted a “yes” vote on the project.

In Louisiana, Cox Cable is facing accusations it’s engaged in predatory pricing to kill Lafayette Utility System’s fiber to the home network and EATel’s fiber network in Ascension Parish.  Cox Cable froze rates and moved in with DOCSIS 3 upgrades, delivering up to 50Mbps service.  Cox chose to upgrade Lafayette before any other Cox-served community.

The Lafayette Pro-Fiber Blog found this EATel billboard taunting Cox

The Lafayette Pro-Fiber Blog found this EATel billboard taunting Cox

EATel, an independent phone company that wired fiber across Ascension Parish, also faced down Cox.  When the cable company began promoting cut-rate pricing in Ascension, EATel took out advertising promoting Cox’s special prices — in other cities, much to Cox’s consternation.  EATel’s ads, much like those run by Novus against Shaw in British Columbia, tell Cox’s customers to call the company and ask for the lower price they are advertising elsewhere.

“Cox came in with an incredibly aggressive promotion for TV service with every bell and whistle you could imagine. We couldn’t figure out how they could even make money on it. So we took out an ad in the Lafayette newspaper that basically said, ‘Hey Lafayette, look at the great prices you are going to get from Cox.’ Cox was not amused,” Trae Russell, communications manager for EATel told Telephony Online.

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p style=”text-align: center;”>Joey Durel, Jr., president of Lafayette parish, testifies before the House Committee on Energy and Commerce on Lafayette’s municipal fiber network on February 27, 2008. (7 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

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p style=”text-align: center;”>

Lesson learned — just threatening to bring in a municipal competitor is often all it takes to turn a persistent “no” from the local cable and phone companies into “yes, Yes, YES!”

Of course, not every project is successful.  Some, such as Burlington Telecom Stop the Cap! reported on yesterday face political and cost challenges.  Others are killed through stage managed opposition and astroturf campaigns paid for by the telecommunications industry before they even get started.

In North St. Paul this year,  “PolarNet,” a planned fiber optic broadband network to stimulate the local economy was killed by an astroturf propaganda campaign undertaken by Qwest, Comcast, and other telecommunications companies that would have to deal with PolarNet as a competitor.  The telecommunications companies claimed it would result in higher local taxes and “more government” where it wasn’t needed.  Citizens defeated the proposal 67-33%.

Windom, Minnesota faced similar challenges and their fiber project was shot down in 1999, but with lessons learned, proponents brought it back up and won in 2000.  To this day, the community of 4500 in western Minnesota face considerable envy from adjacent communities — they want service from the fiber-to-the-home system as well.

Almost universally, opponents to municipal broadband systems claim they are financial failures and saddle communities with debt.  In reality, most have forced those opponents to provide improved service in their competitive communities, or those companies will become the financial failure.

[flv width=”427″ height=”240″]http://www.phillipdampier.com/video/Terry Huval of Lafayette Utility System April 2009.flv[/flv]

Terry Huval of Lafayette Utility System talks with the Fiber Revolution blog about the challenges Lafayette experienced building their own municipal fiber network.  Huval offers excellent advice for other municipalities exploring similar projects.  (April, 2009 – 10 minutes)

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p style=”text-align: left;”>Thanks to Stop the Cap! readers Tim and Matt who suggested this story idea.

The Daily Show Take On Net Neutrality

Phillip Dampier October 27, 2009 Net Neutrality, Video 2 Comments

TelecomGate: City Up In Arms Over Loan Controversy With Municipally Owned Burlington Telecom

Burlington city officials are mired in controversy over the legality of a recently revealed $17 million dollar unpaid loan given to Burlington Telecom, an apparent violation of the terms of its license issued by the Vermont Public Service board.  While the municipally-owned fiber optic network is permitted to borrow money from the city, it must be repaid within 60 days, because the city charter insists that Burlington Telecom be an independently financed venture that does not become a taxpayer liability.

Dubbed by some as TelecomGate, it has become a major media story in Vermont’s largest city.  Some taxpayers are upset by the perceived “bailout” of Burlington Telecom after the company exhausted its commercial loans of almost $34 million dollars to construct a fiber network serving homes and businesses.  The Burlington Free Press has reported the city began quietly funding Burlington Telecom as early as late 2007, for both capital expenditures and some operating costs.  As of today, Burlington Telecom has an accumulated debt of $50 million dollars, $17 million of which is owed to the city.

[flv]http://www.phillipdampier.com/video/WCAX Burlington Telecom Controversy 10-16-09.flv[/flv]

WCAX-TV in Burlington breaks the story about the funding controversy on October 16th. (3 minutes)

Burlington officials admit they underestimated construction costs, in part because they failed to complete a comprehensive engineering study prior to construction.  Installing underground fiber cabling has literally hit a rock ledge, part of the geological character of underground Burlington, that will require an additional $10 million to cope with.

The fact the public is just finding out about it now is a major reason for the controversy.  Jonathan Leopold, the city’s chief administrative officer, said he learned that the financing violated the company’s license terms last November.  The Free Press reports he only informed the city council responsible for overseeing the operation in May of this year, six months later.  The city council itself waited four months until late September before it notified Vermont state officials about the apparent violation, which led to the matter finally going public.

State officials publicly criticized the Burlington city government for the apparent transgression and for what some have called a cover-up, and State Auditor Thomas Salmon called on Burlington Telecom to have greater openness and transparency.  State Public Service Commissioner David O’Brien called the funding irregularity a potential violation of law and that Burlington Telecom was “in debt beyond their ability to recover,” a charge which brought a hot response from Burlington mayor Bob Kiss:

“Commissioner O’Brien’s statements as quoted in today’s Burlington Free Press are inaccurate, inflammatory and totally inappropriate given there is a present proceeding before the Vermont Public Service Board in which his Department is supposed to be representing the public interest. Commissioner O’Brien knew or should have known of the City’s use of pooled cash to fund BT’s capital expenses and start up costs for almost a year. His comments only serve to undermine the confidence of BT’s customers, the interests of whom his Department is charged by statute to protect.”

O’Brien responded that Kiss was “shooting the messenger.”

[flv]http://www.phillipdampier.com/video/WCAX Burlington Burlington Telecom Scandal 10-20-09.flv[/flv]

WCAX-TV reports Burlington city council members had tough words for Jonathan Leopold at a meeting on October 20th, but Burlington mayor Bob Kiss is standing by Leopold. (3 minutes)

City council members have scurried for cover after the local press revealed they approved Burlington Telecom’s funding 13-1 at a city council meeting held October 5th.  That may serve to back up Leopold’s position that he never hid any details about the loan arrangements — city officials and lawyers were well aware of these transactions, he says.  Several public venting sessions were rapidly scheduled to allow constituents to express their concerns.

The Burlington Free-Press editorialized that the city can no longer keep information about city-owned Burlington Telecom’s problems and violations from residents by saying the secrets are necessary for business reasons and is calling for an independent investigation and audit.

State and local politics have also become deeply ingrained into the debate, with accusations flying between political parties that the flap has now become more about undermining the current administration than ferreting out and resolving issues with Burlington Telecom.

[flv]http://www.phillipdampier.com/video/WPTZ Plattsburgh – Taxpayers Give City Council Piece Of Their Mind 10-22-09.flv[/flv]

WPTZ-TV in Plattsburgh covered the public venting session on October 22 set up by the city council to allow residents to speak their minds.  (2 minutes)

Leopold, whose administration duties involve Burlington Telecom, and who has been the most visible figure in the middle of the dispute, called attacks on him by some local politicians part of a scapegoating witch hunt.

City council voted 8-6 at 1:30am this morning approving a resolution to ask for the suspension of Jonathan Leopold anyway.  So far Mayor Kiss won’t hear of it.  At a press conference he reiterated his full support for Leopold, saying his suspension is “not warranted by the facts and is not in the best interests of the city. As mayor, I will not suspend the CAO from his service to the city.”

Caught in the middle is Burlington Telecom and its 4,600 subscribers.  The provider is in apparent violation of its license for its loan arrangements, needs additional money to complete its buildout, and will likely also be cited for not completing that buildout on the schedule it committed to as part of its license to operate.

Commentary: Our Take

Too often municipal broadband projects end up as political footballs kicked all over town, especially when controversy erupts.

[flv]http://www.phillipdampier.com/video/WPTZ Plattsburgh State Demands Repayment 10-20-09.flv[/flv]

WPTZ-TV covers the political repercussions and damage control operations in full force after news of the controversy erupted. (10/20/2009 – 2 minutes)

Burlington Telecom made a crucial mistake when it failed to undertake a detailed engineering study to determine the true costs of wiring Burlington with fiber optics, something incumbents Comcast and FairPoint have not been willing to undertake.  A true picture of the start-up costs would have resulted in a better understanding of initial construction costs and the financing required to pay for it.

City officials also erred in how they began funding some of the costs to administer the system after initial financing ran out.  Good intentions or not, the fact there is a perceived cover-up makes things much more attractive to a media that often ignores or buries telecommunications stories on the business pages.

A frank and open discussion explaining the challenges and resolutions to them might have brought about temporary city loans with the consent of the community, without melodramatic political theater.  Residents have a unique buy-in with Burlington Telecom because it’s municipally-owned.  Many would be more than willing to see that and some additional investments pay off instead of collapsing with a complete shutdown.

[flv]http://www.phillipdampier.com/video/WCAX Burlington Mayor Defends Administration Over Telecom Issue 10-26-09.flv[/flv]

WCAX-TV covers Burlington mayor Bob Kiss who held a press conference yesterday to defend his administration’s role in Burlington Telecom (3 minutes)

When the story broke, the usual and very predictable campaign of finger-pointing, ducking for cover, and scapegoating began.  This time-honored political damage control method is voter approved, if you stick your finger to the wind and see where voter sentiment seems to be blowing.  That’s precisely what state Commissioner O’Brien did, only he overplayed his populist hand.  This is, after all, the same commissioner who initially made excuses on behalf of FairPoint and seemed all too willing to give that company the benefit of the doubt, right up until it became politically untenable.  You cannot be a credible torch-bearer in a populist mob if you helped build the castle you now seek to burn to the ground.

Mayor Kiss was correct in calling O’Brien out, not just for his convenient criticism, but for trying to win the Self-fulfilling Prophecy Award by predicting Burlington Telecom’s demise.  Vermont residents should ask him where his clairvoyance was when he was publicly stating FairPoint was doing “pretty well” a year ago.  O’Brien needs to be part of the solution for a change, not part of the problem.

Leopold appears to be a classic scapegoat.  As he struggled to keep Burlington Telecom afloat, it is inconceivable he was cutting loan deals without the knowledge and consent of others in the city administration.  The same city council now demanding his suspension seemed all too willing to go along just a few weeks ago when it voted almost unanimously with going forward.  That speaks volumes.  But when the media lights fire up, and angry residents start writing and calling, the complete turnaround is a site to behold.  A series of self-serving, concern trolling speeches followed, along with complaints they were never given enough information or were confused by what they heard.  If that is the kind of leadership Burlington has, perhaps residents need to consider making some changes.

[flv]http://www.phillipdampier.com/video/WCAX Burlington City Council Undecided About Burlington Telecom 10-26-09.flv[/flv]

Late last night, WCAX reported city council was still undecided about what to do about the Burlington Telecom controversy.  (3 minutes)

The public has a right to be upset, but are all too often satisfied with the political theater designed to quickly “resolve” the problem by expelling the designated scapegoat from their midst.  Mayor Kiss has remarkably withstood the usual pattern very well thus far.

While the politicians play “not my fault,” Burlington Telecom customers need answers to know if their provider is endangered.  An independent audit and review, free of political know-nothings would be a start.  How about bringing in those with actual expertise in deploying municipal networks.  How about excluding involved, self-interest-protecting elected officials, especially those who had any hand in the FairPoint debacle.

It’s also time to fund that engineering study for the unwired portions of Burlington to get a true cost analysis.  A review as to why Burlington Telecom is not attracting a larger segment of the market is also needed.

In broadband, at least, that’s a no-brainer.  Burlington Telecom’s speeds on the download side are too slow and too expensive.  Comcast offers faster downstream service at lower prices, so why would anyone want to switch?  Burlington Telecom is trying to market their synchronous speed network (your downstream speed and upstream speed is the same), which would normally be appealing to a segment of Internet customers frustrated with cable and DSL shortchanging them on upload speeds.  But the customers who understand and appreciate the difference will not accept a broadband service that tops out at 8Mbps for an enormous $71.80 a month.  That’s far too slow and too expensive when Comcast is offering 12Mbps/2Mbps (upload speed with PowerBoost) for $42.95 per month.  Service for 16Mbps/2Mbps is $10 more, still twenty dollars less than Burlington Telecom is charging for half the speed.  Burlington Telecom can attract a larger base of broadband customers by accelerating speeds on their network beyond what Comcast provides.

Municipal broadband projects can be successful, but should be based on a true and honest appraisal of the costs, a complete understanding of the competitive landscape, a flexibility to respond to changing markets, and a good reason why they should exist in the first place.  Fulfilling the needs residents want, but incumbent providers will not provide is always the best answer.  Customers don’t want anemic broadband at high prices.  Provide that and a municipal broadband project will fail, even without political grandstanding and finger-pointing.

[flv]http://www.phillipdampier.com/video/WPTZ Plattsburgh Kiss Refuses To Punish Leopold Over Telecom Flap 10-27-09.flv[/flv]

This morning Burlington residents learned Burlington mayor Bob Kiss was still standing behind Jonathan Leopold, despite their calls for Leopold to be suspended. (WPTZ) (2 minutes)

Below the jump, find a one hour video interview between The Burlington Free Press and city officials on the Burlington Telecom matter.

… Continue Reading

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