Name: Victor Colantonio
Age: 51
Position: Founder and President NorthEast Optic Network, Inc
Backround: More than 20 years experience in creating multiple businesses leveraging of “technology rich” inventions and advanced telecommunications applications. Before founding NEON, in 1991, Colantonio was the founder of FiveCom Associates, a Competitive Access Provider, licensed to operate in western Massachusetts, Connecticut and Rhode Island. In 1994, Colantonio sold the FiveCom assets to Brooks Fiber Properties (now MCI/WorldCom), to provide seed capital for NEON.
Education: University of Massachusetts at Amherst
Family: Married, two daughters
Residence: Newton, Mass.
PBN: Describe NorthEast Optic Network, Inc.
COLANTONIO: NorthEast Optic became a public company on July 30, 1998 by issuing an equity and high yield debt offering. In the process of that exercise, we raised $250 million to advance our business as a carrier’s carrier. Our company builds, owns and operates fiber optic communication networks and leases the facilities to carriers who serve the general public. We have no retail product. We make no offer to the general public or to small or large businesses.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
What are fiber optic cables, or carrier systems?
Fiber optic cables contain pieces of glass filaments that are the size of a human hair. They are made out of sand and they have the carrying capacity to support hundreds of thousands of simultaneous telephone calls that have always been carried on copper cables. When one looks at their home, they see telephone wire coming in. It’s copper cable that carries their voice communications from the handset and their Internet communications from their computer. In the 1960s tremendous advances were brought to light, including the ability of glass filaments to carry pulses of light that transport voice communications. Because it is light and is carried on glass, there is no electrical component to the communication vehicle. Telephone wires have electricity in them. With fiber optics, light waves carry the voice signal.
In terms of fiber optics, how dramatic have the technological advances been in recent years?
The advances have been a quantum leap. In communications, fiber optics are the equivalent of landing a man on the moon. The invention of fiber optics for communication purposes had its start on the Massachusetts/Rhode Island border in Blackstone Valley. American Optical was the name of the company. They were among the leaders in advancing fiber optic communications.
What time frame are we talking?
Well, I got involved with fiber optics in the 1970s, so I would say the inventive juices were flowing in the 1960s and maybe late 1950s. There was tremendous opposition from companies that had a huge investment in everything from copper mines to processing wires and manufacturing conventional copper cable. People thought the advancing technology was going to eliminate jobs and diminish the price of copper cable. But the technology has been so compelling, it has become the standard commodity in communications today.
When NEON went public, was the infusion of capital what you hoped it would be?
We raised $20 million more than we had anticipated. The reception in the marketplace was very strong.
Why was that the case?
There were a couple of reasons. The first was that New England is known for being a knowledge-creation part of the country. We’re very high-tech. We have a high density of people and a high living standard. It is nationally recognized that we here in New England are one of the most telecommunication-starved regions of the country. So any company that can go to market with new rights of way and high technology for installing fiber optic facilities in an area that is recognized as being starved for this type of facility – it’s a pretty strong story.
You talk about the qualities of this region — I’m wondering why such a window of opportunity was open?
Look at the history of New England and compare it to other parts of the country, and it’s a pretty obvious set of circumstance that brings one to the conclusion that we were the right company at the right time. The first is that New England, unlike the West Coast, or Midwest or West or South, has had a continual subdivision of its land since the Pilgrims landed. There are very few areas where a communication company can acquire and obtain rights of way that are contiguous and cover a large sector of the population. In the West, you can operate in Dallas or Houston or Phoenix and you’ve got a clear shot of everything because the land is flat and there are large tracks of property. Zoning does not have a 150-year history. It still has a bit of a cowboy mentality. In New England, we’ve got the opposite. We’ve got incredibly dense land ownership, very small parcels. Rights of way are extremely difficult to get. We have another phenomena here. Rhode Island is probably one of the exceptions, but the phenomena is Home Rule. To operate in a community and put wires up on the city streets, you’ve got to go community to community, city by city and obtain a permit. And any one community could actually prevent the process from happening or at least slow it down. So the mega-carriers – now it’s Bell Atlantic NYNEX, Ameritech, MCI, Sprint — have found it a difficult road to go here in New England installing the advanced telecommunications and getting distribution into the population. We will take the risk through our utility partners and install the cable, bring it to the proper destination and put in enough cable so that all the carriers can lease from us. We put one in, very large cable.
Is that underground?
Every place we can go underground, we go underground.
What percentage of your lines are underground, versus aerial?
That’s a tough number; let me tell you why. We are using a tremendous amount of the high voltage electric utility high lines. They’re 80, 90, 100-foot towers. We’re on top of those for our interstate system. That’s all aerial. When we get into urban areas and suburban areas, we are about 85 percent underground.
You’ve said that if it were not for a number of Rhode Islanders, NorthEast Optic would not exist.
NorthEast Optic is a 1998 company – a roll-up of a company called FiveCom Associates. In the late 1980s, FiveCom was the company I founded. We sought at-risk investment to install the first fiber optic facilities that we owned. We were having difficulty until a meeting in 1990 with some visionaries. One of them being J. Joseph Garrahy, the former governor, and the late Ed Burke, who had an illustrious career, not just in Rhode Island but was recognized nationally. He was a colleague and adviser to Judge (Harold H.) Greene when he was in the position of president of the National Utility Regulators Association. Judge Greene (of the federal District Court in Washington D.C.) almost single handedly caused the divestiture of ATT in 1982 that created the Baby Bells. This was landmark decision made by the federal government, which determined that America was not being served by the monopoly of ATT, the Bell system. It caused ATT to divest itself of its operating subsidiaries, one of which was New England Telephone. ATT had to spin those companies off and get out of the local telephone business. Judge Greene was the decision maker on that case. Ed Burke was a very influential individual who helped guide that process along. He was best known in Rhode Island as being the last standing individual who wanted to bring the Braves back to Boston.
He and Joe Garrahy believed that what my company FiveCom was doing was not only vital to New England, but was to become a cornerstone of economic development. In the 1990s there was turmoil in the banking industry, and tremendous frustration and anxiety in the computer industry. Joe Garrahy and Ed Burke believed one of the missing ingredients for New England to become competitive with other parts of the country was a rock solid telecommunication infrastructure. They took steps to involve me with knowledgeable investors in Rhode Island. Foremost among whom were Arnold “Buff” Chace and Malcolm “Kim” Chace, who coincidentally, had David Burke (Ed’s son) working for them. The Chaces actually funded at-risk capital to get our business going. Without Joe Garrahy, Ed Burke, Buff and Kim Chace, and there are a host of other individuals, our company would not exist today.
You’ve mentioned people like Dick Oster, Don Carcieri and Jim Rosati
As the capital came in from the Chaces to start the business we had to make a crucial decision, which was to select fiber optic cable. Not the filament, but the cable that would carry these filaments. We wanted a state-of-the-art design that had never been attempted to get us very high quantities of glass inside the cable jacket. We ran a competition to get cable made specifically for our application. There was one company that rose above all others and that was a company out of Atlanta, called Focas, owned by Cookson America. Dick Oster, Don Carcieri, Jimmy Rosati, Stu Daniels and company (all Cookson America executives) agreed to take a risk and build a cable for us that had never been built.
You’ve said Rhode Island is in an ideal situation to “get wired.”
Rhode Island has the geographic position between Boston and New York. It is a state that has got – through the urging of many people – a tremendous opportunity to utilize the soon-to-be-constructed high speed rail as the connector that runs from New York to Boston and to deploy advanced telecommunications. All along that high speed rail line there is the opportunity to break out fiber optic filaments.
Does New England need a policy on telecommunications?
Rhode Island and the rest of New England need a policy on telecommunications or we will be left aside in this Information Age. A lot of petty differences can prevent our community – the New England community – from emerging and taking its proper place on the world stage. We’ve got a telecommunication system that is really subject to individual states’ rules and regulations.
Are you saying the old New England parochialism is hurting the industry?
There is a sense of parochialism where the unification of New England can’t occur without a multi-state policy. We’ve got all kinds of different rules and regulations for cable television, which is attempting today to become Internet companies and telephone companies. We’ve got telephone companies regulated by state departments of utilities that are attempting (to become) Internet companies and cable companies. Then you’ve got the long-distance carriers like MCI and Sprint that are attempting to become local telephone companies. We’ve got all these pockets of discontinuity. And we’ve got a population that’s got the intelligence and the monetary wherewithal to deploy advanced technologies and become active players on the world stage.
It sounds like there is a lot of work to be done in terms of preparing for life in the millennium?
We’re seeing here in New England predictions from the government of our population. In the next 10 years, 40 percent of our workers will be tele-commuting. I don’t see how that could happen when the most advanced telecommunication service that most consumers in Massachusetts can get to their house is a 9,600-Baud modem. I don’t see how we are going to make the transition from the post-Industrial Age of our economy into the Information Age without a very aggressive program put together by groups like the New England Governors’ Council or a group based in Boston called the New England Council. They’ve got to take the lead in the New England economy and bring people together to try to iron out differences in policies and differences in regulations. Telecommunications in New England should be treated no differently than the interstate highway system. It is as much a core part of our infrastructure for quality of life as is the sewer system, the water supply system, the highway system, good schools, etc. I’m frightened that other parts of the country and other parts of the world are shoulders ahead of our ability to implement a New England-wide policy.
