PSB questions city officials on Burlington Telecom sale

The offices of Burlington Telecom. Photo by Anne Galloway/VTDigger

The offices of Burlington Telecom. Photo by Anne Galloway/VTDigger

The Public Service Board has posed a series of questions to city officials regarding the pending sale of Burlington Telecom to a private investor.

The city has proposed selling Burlington Telecom, a cable and telephone utility, to Trey Pecor and Merchants Bank in order to help settle a pending $33.5 million lawsuit brought by Citibank for nonpayment of borrowed funds. Under the tentative agreement, the investors would find a buyer within three years and the proceeds would be divided between Pecor, the two banks and the city.

In February, Burlington Mayor Miro Weinberger announced that Citibank had agreed to drop the lawsuit in exchange for $10.5 million and a share of BT’s future value. The city’s outstanding debt of $16.9 million for funds diverted to support Burlington Telecom also remains unpaid.

Approval from the Public Service Board is required before the sale and associated settlement can go through. Last week, the three-member board issued 16 pages of questions about the deal to the city, the city’s law firm and Burlington Telecom.

The Public Service Board is considering city officials’ request for relief from a few key conditions of Burlington Telecom’s original certificate of public good, which was issued by the state regulator in September 2005.

First among the conditions in question is the requirement that the utility serve every residence, building and institution in the city.

Universal services was supposed to have been achieved within 36 months, and Burlington Telecom has been in violation of this aspect of its certificate of public good for years. As of the March 28 petition, the utility had extended its network to about 82 percent of service addresses; remaining locations in the city can obtain service from Comcast or FairPoint Communications.

Burlington Telecom is now asking to be relieved of the 100 percent network service burden. That unsettles some members of the public, who remain unconvinced the city should shed the enterprise.

At a public hearing held by the PSB on July 8, people in attendance asked for more public involvement in the settlement process and a clear line of local control for the utility’s future.

Vince Brennan, a Progressive City Council member from Ward 3, said he was amazed by the turnout. “I was definitely a little overwhelmed with the support from the community who came for local ownership,” he said.

Brennan said he doesn’t know how much local involvement in the utility’s planning process is realistic; the terms of the tentative settlement require the city to reduce its stake to minority status.

Lauren-Glenn Davitian, the executive director of Channel 17, said the PSB inquiry asks how city taxpayers are going to be repaid, and whether the city’s proposal is really the best possible deal.

“They’re pushing the city on these assumptions they’ve made,” Davitian said.

Karen Paul, a Democratic Burlington City Council member for Ward 6, said the PSB’s detailed questions reflect the seriousness with which the members are approaching concerns about Burlington Telecom.

“I think there are going be a lot of people working really hard this weekend to answer those questions,” Paul said.

Responses are due to the PSB on July 15, and some City Council members have said they’re hoping to see an advance copy before the final submission.

A group of locals has formed a co-op to pursue ownership, but it’s not clear whether it will be able to raise enough capital.

An evidentiary hearing is scheduled for 9:30 a.m. on July 22, in Montpelier. The PSB members then will choose whether to ask for additional filings from the parties. There is no definite timetable for a final decision.

Though the sole public hearing scheduled on the docket is now complete, public comments are accepted by the PSB as long as the case is open. Public comments can be made online; mailed to: Clerk of the Board, Vermont Public Service Board, 112 State Street, Montpelier, VT 05620-2701; or faxed to 828-3351.

Hilary Niles

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  • Jim Barrett

    I find it very interesting that the PSB has so many questions now when they stood back and watched illegal activity taking place for years. They never filed any charges against anyone while the massive ripoff was well known to everyone. The residents were ripped off for millions and not one person has paid a dime!

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