BURLINGTON — Several city councilors and the mayor’s chief of staff will travel to Toronto this week to visit the headquarters of Ting, one of two remaining bidders for the Burlington Telecom fiber network.
The City Council is expected to choose between Ting and the Keep BT Local co-op Monday. The final letters of intent from both bidders are due Wednesday evening.
All of the councilors making the trip voted to advance Ting’s bid at the council’s Oct. 16 meeting.
“I’ll be the first to say the optics aren’t ideal,” said Adam Roof, I-Ward 8, one of those going to Toronto.
The others are all Democrats: Chip Mason, Ward 5; Karen Paul, Ward 6; Richard Deane, East District; and Joan Shannon, South District.
Roof said the trip is being paid for by Burlington Telecom. In a Facebook post about the trip, Roof wrote that, “If funding becomes a distraction, however, I will cover the cost out of my Council discretion fund.”
Roof and others said the trip has been in the works for weeks and they feel it’s important to get a sense of the company’s culture and operations before casting their final vote.
“There will be no inappropriate courting,” Roof said. “This is a due diligence trip through and through.”
Roof said Mayor Miro Weinberger and members of the Burlington Telecom Advisory Board made a similar trip to the headquarters of Ting and its parent company, Tucows, several weeks ago.
Mason said he and other councilors have met privately with leaders and board members of Keep BT Local. “We’ve had no such direct access to Ting other than the one presentation in executive session,” Mason said.
The group will leave Thursday night and return Friday, he said.
Roof said he would track and make public how he spends his time on the trip, what questions he asked and how they were answered in addition to itemizing and making public his expenses.
“It would be so unwise for me or any other councilor to go on a junket trip under this type of microscope,” Roof said.
State Rep. Selene Colburn, P-Burlington, a former city councilor, questioned why someone from the mayor’s office was accompanying the group.
Colburn, who supports the co-op, said the trip was available to all city councilors but that the group going is essentially the Democratic caucus and a representative for the Democratic mayor — all of whom have publicly supported Ting over the co-op.
“They didn’t create this dynamic, but now it’s the Democrats and the mayor’s office going to meet with Ting,” Colburn said.
Two council members who listed their affiliation as both Democratic and another party in the last election — Ali Dieng and Dave Hartnett — aren’t going.
Requests for comment from the mayor’s office were not immediately returned Wednesday.
Brian Lowe, the mayor’s chief of staff, said Colburn was applying the wrong frame to the trip. Such due diligence visits are typical when the city is negotiating a major transaction, and it was open to any member of the council, he said.
Lowe said he’s attending only to staff the trip, meaning he will coordinate with Ting representatives to set the itinerary and make sure the councilors are in the right place at the right time.
“It’s not glorious work,” he said.
City leadership would have liked for every councilor to have this opportunity before deciding an issue with “substantial and long-lasting” implications, Lowe said, but recognize that the trip didn’t work for everyone’s schedule.
Roof said he didn’t agree with Colburn that those making the trip have already cast their lot with Ting. He made clear when voting for Ting that he was still undecided as to whom he would ultimately support. “Frankly I think the majority of the City Council is undecided and we’re waiting to see the final bids,” he said.
When the City Council winnowed the field from three bidders to two, the co-op received six votes, Ting received five and Schurz Communications was eliminated with just a single vote.
All five of the councilors who voted for Ting will be making the trip to Toronto. In explaining their votes, all five raised concerns about the Keep BT Local bid, from its debt-financing proposal to legal and regulatory issues the mayor had described.
Ting’s bid is for $27.5 million, with additional money to remove Burlington Telecom’s equipment from Memorial Auditorium if necessary. The company has also offered to put $250,000 toward local tech initiatives including BTV Ignite.
The Keep BT Local bid is for $12 million and requires the city to retain a $1.5 million, or 12.5 percent, stake in the new entity. That offer relies on a $10 million loan from Maine Fiber Co. with a 14 percent interest rate.
Ting’s offer would give the city the option of retaining up to a 20 percent stake in the new company. Both offers include a commitment to net neutrality, or not favoring certain online content.
Ting’s offer would keep phone and internet service rates level for at least 2.5 years and pass on cable content increases at cost. The co-op’s bid doesn’t specifically address pricing, but its leaders have said they will keep the service affordable for members.
A well-organized and vocal group of residents coalesced to support the Keep BT Local bid, arguing that Burlington will be better served in the long run by local ownership than a larger upfront payment for the telecom — only a portion of which will accrue to the city.
Burlington Telecom is owned by the holding company Bluewater Holdings and its assets are leased back to the city, an arrangement reached following a settlement with Citibank. The 2014 settlement with Citibank ended a $33 million lawsuit brought by the bank, which had loaned money to Burlington Telecom.
Burlington’s agreement with the holding company allows the city to select a buyer. If Burlington is to keep the largest possible portion of the proceeds, the sale must be completed by year’s end.
Correction, Nov. 7 at 11:03 a.m.: An earlier version of this story misstated when the city entered an agreement with Bluewater Holdings.
