David Provost, chair of the Burlington Telecom Advisory Board, read a statement at Monday’s City Council meeting saying the board “unanimously expressed serious concerns about the sustainability” of Keep Burlington Telecom Local’s financing plan and its “lack of operating experience.”
Alan Matson, chair of the Keep Burlington Telecom Local co-op, said Provost’s remarks made the group “feel like an underdog.” Matson dismissed the concerns about a lack of experience, saying the co-op board would be able to hire a veteran general manager to run the fiber network.
He also expressed frustration about the lack of transparency around the other bids. Keep Burlington Telecom Local is the only identified bidder of the four offers the city is still considering. The co-op had announced it was making an offer.
Despite the concerns Provost highlighted, the co-op appears to enjoy strong community support, with more than a half-dozen residents speaking out in favor of its bid at Monday’s council meeting. Most cited City Market as evidence that a co-op can thrive in a competitive field.
Several of them echoed Matson’s frustration that the other bidders haven’t been identified. Alex Chaffee, who reported being a longtime Burlington Telecom customer, decried “secrecy … in the open government we’re supposed to have.”
Provost released some additional details about the three other offers, saying that two cash offers from established telecommunications businesses are within a few million dollars of each other and each is “significantly more than double the lowest offer.” Provost did not identify any dollar amounts or which offer was the lowest.
Neither cash offer would require “financing contingencies” or long-term debt, he said.
A third offer from a private equity investor “has some of the attributes of the established business offers, has a lower valuation and includes other benefits for the community and local tech economy,” Provost said without elaboration.
Provost said the city wants to keep Burlington Telecom from having substantial debt, adding that when the company defaulted on payments years ago it owed too much.
All four offers are still being negotiated, but Provost said they are all expected to include restrictions on resale, limits on customer price increases for content costs — such as cable television — and requirements that the new owner be committed to net neutrality.
Net neutrality is the principle that internet service providers, like Burlington Telecom, should not favor or block certain content or products and provide equal access to all websites and applications.
The city has fallen behind its self-imposed timeline for selecting an offer, which it originally expected to do by the end of July. The sale must be completed by the end of the year for Burlington to maximize its share of the sale proceeds.
