The Massachusetts Attorney General released a boring press release recently. Not her fault. Not every story can have rabid weasels loose in a car full of clowns.
This one was about contract fraud and false claims.
Pursuant to the contract between the parties, Level 3’s annual rent
obligation is based on, among other things, the number and length of
fiber optic cables it installed and is subject to potential offset
for certain in-kind benefits to MassDOT. Level 3 is also required to
provide MassDOT annual certifications reflecting the number of fiber
optic cables it installed in the conduits.
What this means is, Massachusetts allowed a company to rent space along highways, charged rent based on how many tiny glass fibers ran through the conduit, and acted shocked when the company lied how many photons were flowing through those fibers.
The first part of this is good.
Railroads and highways rely on eminent domain. So does modern communication. They all need a line between point A and point B, and a few stubborn landowners could hold up the whole process.
Luckily, the land taken for railroads and highways can be reused for telecommunications. The cables need not take any extra space. Ideally there would be a 10 foot clear zone beside the pavement anyway.
So departments of transportation rent space along and under highways to companies that need a place to bury cables. So far, win-win.
The second part is bad.
The rent could have been based on the space occupied, so many dollars per foot per year. The accounting would have been simple. Instead the company was billed based on what it did with fibers in the conduits, and that’s easy to lie about.
Massachusetts was betting on a company’s business success as well as its honesty. Reminds me of its attempt to fund the Turnpike by gambling on interest rates.
If a state wants to run government like a business, it should try to emulate Main Street rather than Wall Street.
Just charge rent like a normal landlord.
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