The sale of Burlington Telecom to businessman Raymond “Trey” Pecor has been approved. The green light is a crucial step toward resolving a longstanding $33.5 million lawsuit by Citibank that has dragged down the city’s bond rating.
Blue Water LLC, a firm created by Pecor for the transaction, will acquire BT and lease it back to the city, which will continue operating the cable television and Internet provider.
The transaction essentially serves as a “bridge loan” until a permanent buyer can be found for the now public enterprise. The city will use proceeds from Blue Water to fund most of a $10.5 million settlement with Citibank that was announced in January.
Public Service Board members James Volz, John Burke and Margaret Cheney unanimously approved the Blue Water transaction on Nov. 3. They said no parties to the case had objected to the sale.
A group of public access media organizations had asked for certain conditions to be added to the utility’s certificate of public good, while the city requested it be cleared of all current CPG violations.
Channel 17/Town Meeting TV, operated by the Center for Media and Democracy, the Regional Educational Television Network and Vermont Community Access Media comprise the Burlington Access Management Organizations, known as BAMOs. The group is worried that a future private owner, likely an out-of-state corporation, may not be as community-minded as Burlington Telecom has been under the direction of the city.
The BAMOs sought a six-month public engagement process “to help ensure a meaningful public ownership interest in BT to influence BT’s management, policy, and decisions in the future,” according to the PSB’s ruling. They also asked that the BT Advisory Board be expanded with the addition of three to five new members with experience in telecommunications, alternative corporate structures and public engagement.
The Public Service Board did not agree to the request. The board said it would be premature to impose conditions on a prospective sale, and that any future owner will be expected to comply with the same public access obligations the city must meet now.
“While the conditions requested by BAMOs may provide a useful mechanism to explore issues in connection with a prospective future sale of BT’s Assets, the Board declines to impose such conditions,” the PSB wrote.
The city had asked for an indefinite reprieve from a condition that BT reach every building in Burlington by 2008. The Vermont Department of Public Service supported the city in this request, and the Public Service Board agreed.
Of 18,882 service addresses within Burlington, the BT network currently does not pass within 300 feet of 3,257 service addresses, according to the final ruling. Of those, 1,913 are located on public rights-of-way, and city officials say it would cost about $3.7 million to bring the BT network to them.
All addresses can be served by another cable television provider, according to the state.
Burlington Mayor Miro Weinberger praised the PSB’s decision to approve the transaction and wipe BT’s slate clean of any violations, thereby making the system more attractive to future buyers. He said the city will move quickly to implement all the terms of the lawsuit settlement agreement.
