BURLINGTON — Input for selling the Burlington Telecom fiber-optic network has fallen largely into two camps: those who want to retain city or public ownership and those who want it sold to the highest bidder.
That’s how David Provost, chair of the Burlington Telecom Advisory Board, described what he has heard from residents after the third and final public meeting to gather input on what criteria the city should follow in the sale.
“The highest bidder is presumed in this discussion to be Comcast,” Provost said. For those who want to keep Burlington Telecom’s ownership local, selling to Comcast or some other large corporation is the worst possible outcome.
“We’ve heard very little to date about the $17 million,” Provost said, which is the amount of taxpayer money that was spent without authorization during Mayor Bob Kiss’ tenure to prop up Burlington Telecom. Provost said that’s come as a surprise, given the angry reaction from the public when that was revealed in 2009.
But at Wednesday’s meeting, participants weren’t evenly split on the issue. Most said they would like to see the city or residents retain some level of ownership in Burlington Telecom. One resident explained that, as a taxpayer, she would rather be able to use the asset than recoup the loss.
The input gathered by the advisory board will be drafted into a set of criteria presented to the City Council, which will then vote on whether to amend or adopt those recommendations. People can still weigh in via an online survey through Friday.
In 2014, Mayor Miro Weinberger settled a $33 million lawsuit brought by Citibank, Burlington Telecom’s main creditor, that requires the utility be sold after four years. The settlement relied on money from Blue Water Holdings, LLC, an entity created by local businessman Trey Pecor with backing from Merchants Bank. Blue Water bought Burlington Telecom and leased it back to the city, which has continued to operate it as a utility.
Under the settlement, Burlington is allowed to pick the eventual buyer as long as an undisclosed financial threshold is met. Weinberger has declined to say what that amount is, because it would weaken the city’s negotiating position with prospective buyers.
Lenore Broughton, a conservative political donor, said she favors selling Burlington Telecom for a price that recoups as much of the $17 million as possible.
“The city is obligated to seek out the highest bidder and bring as much money to the treasury of Burlington, to the taxpayers, as possible. It needs to go to a private buyer,” Broughton said.
Bill Keogh, a former City Councilor, said it’s unrealistic to think that the city can recoup the full $17 million. The way the settlement is structured Burlington will only receive a percentage of the sale price. However, he cautioned that retaining local control comes with financial risk.
The eventual buyer, whether it is a local or public entity, will be held responsible if Burlington Telecom goes “belly up.” While he would like to see public ownership, the purchaser will still need to find a way to make money, he said.
Keogh suggested that regardless of who purchases the fiber-optic network, the sale should include a provision giving the city or the state first right of refusal to buy it back should it ever be sold again.
Steve Goodkind, a longtime public employee and former mayoral candidate, said he doesn’t believe the city has to choose between retaining local control and recouping the $17 million.
Burlington Telecom should be sold at the lowest allowable price to a “subscriber owned co-op” or a different city department, he said. Doing so would allow the new owner to reinvest in the network. Then an arrangement could be reached in which the buyer would pay the $17 million back slowly over time using proceeds from services.
