[B]URLINGTON — Burlington Telecom is for sale, and local residents want a say in what company buys the city-owned fiber optic system.
The Burlington Telecom Advisory Board met Tuesday to take public comment and discuss the timeline for the sale.
Under a plan developed by the advisory board, potential buyers must meet certain criteria. Qualified buyers would make presentations to the Burlington City Council, which would then approve one buyer. The board plans to launch the sale process in March and select a buyer by July.
“An alternative process would be like a ‘for sale’ sign,” Advisory Board Chair David Provost said. “We’re not looking for a buyer with the most money, or a big national and international footprint. There’s (public) fear of selling to a huge conglomerate, but I don’t think the criteria will allow that to happen.”
The sale criteria was developed by the board with public comment, and approved by the City Council in April 2016. The purchaser must be financially sound and have experience running a broadband company, for example. The buyer must go through a certificate of public good process to operate as a cable provider.
Mayor Miro Weinberger settled a $33 million lawsuit brought by Burlington Telecom’s main creditor, Citibank, in 2014, which requires the utility be sold after four years. Under the settlement, the city is allowed to pick the buyer as long as an undisclosed financial threshold is met.
Settlement money came from Blue Water Holdings LLC, an entity backed by the Merchants Bank and created by Burlington businessman Trey Pecor. Blue Water bought the company and leased it back to the City of Burlington, which continued to operate it as a municipal utility. The sale must be finalized by January 2019, or Blue Water can pick the buyer.
The longer a sale takes, the more money Blue Water gets to keep from the eventual proceeds. If a sale isn’t finalized by January 2018, Burlington’s share drops from 50 percent to 35 percent. Regardless of when Burlington Telecom is sold, half the city’s portion of the proceeds will go to Citibank.
With the January 2018 deadline for the sale fast approaching, the public weighed in on the board’s projected sale process and timeline.
Burlington resident and business owner Carol Bates said she relies on Burlington Telecom’s service for her photography business and doesn’t want to see the business sold at all.
“I don’t want to this sold under any circumstances,” Bates said. “We don’t want a big player to come in from out of state. Let’s keep Burlington local.”
Other residents echoed those sentiments, including Lauren-Glenn Davitian, who suggested the city be offered first right of refusal, if the future buyer ever decided to sell, be added to the criteria for finding the right purchaser.
City Councilor Joan Shannon, who spoke via phone at the meeting, said she was concerned that working a first right of refusal into the criteria could result in no buyer.
“Let’s find out who’s interested and then let’s talk about that,” Provost concluded.
While some citizens called for ownership of the telecommunications company to fall back into the hands of the city, Provost said that’s just not possible.
“The Citibank agreement prevents us from buying from Blue Water,” he said. “And it’s not possible not to sell.”
But some residents have offered an alternative.
Alan Matson is a founding member of the Keep Burlington Telecom Local Cooperative, an incorporated entity formed at the time of the settlement with the sole intention of acquiring the company when it was time to sell.
The co-op is made up of 200 Burlington Telecom subscribers and has interest from at least 300 more, Matson said. Members of the co-op have been active in gauging interest from community members and financiers for the past four years.
“In the world of telecom and utilities there’s a history of them being run successfully as co-ops,” Matson said. “We’ve been staying on top of the process waiting for this year. We hope to be one of those finalists in July.”
At this time the co-op is the only publicly known interested buyer.
The Advisory Board scheduled another meeting to take public comment on its sale process and timeline before its presented to the City Council. The meeting will be held Feb. 8, at 5:30 at City Hall.
Editor’s Note: Lauren-Glenn Davitian is married to VTDigger reporter Mark Johnson.
