Editor’s note: This commentary is by Michael Long, who served more than a decade on the Burlington Development Review Board and has lived in Burlington since 1975. He now teaches English and was a high school teacher in Colchester from 1975 until 2015.
[B]urlington should keep Burlington Telecom local because a co-op owned by members of a community is far more likely to serve that community responsively than any corporate entity. Burlington Telecom was founded on the principle of community control over essential infrastructure. Public ownership of telecom services is directly analogous to public ownership of other utilities such as Burlington Electric. Only KBTL (Keep Burlington Telecom Local) provides a window of opportunity to secure an approximation of BED-like community control.
Those supporting the Toronto-based Ting bid cite Ting’s financial resources and reserves, especially the size of its offer and its ability to pay cash rather than take on high interest debt as KBTL proposes. This is a simple argument that fails to address complex circumstances. Furthermore, it’s wrong.
Ting’s purchase would be heavily leveraged. They have a $140 million line of credit with the Bank of Montreal and others. They tapped $85 million to buy eNom and would dip further into this credit to fund a Burlington Telecom purchase, saddling them with well over $100 million in debt to service. Ting is in pursuit of rapid growth and Burlington Telecom is a means to an end, not a passion or a community based commitment. And ultimately, Ting’s “cash” and “experience” (experience largely in registering domain names and selling cellular services, not in running fiber optic networks) are beside the point anyway.
Burlington Telecom has been run successfully now by Burlington city employees for quite some time. Whoever buys Burlington Telecom, the City of Burlington will no longer own or lease it. Thus whether it’s purchased with cash or credit hardly matters with respect to the city’s or the taxpayers’ interests. These interests should be the same and are distinct from the interests of Citibank, Dorman and Fawcett, or Blue Water Holdings, though these businesses stand to gain more from the larger Ting offer. Their gain would be the taxpayers’ and the community’s loss.
So far Citibank is out some $30 million, which at least they agreed to loan after assessing and accepting the risks, and Burlington taxpayers are out $17 million which they loaned without realizing it after assurances from the city and the Public Service Board that no tax dollars were at risk. This was a monumental breach of the public trust, not a clerical oversight.
Even the highest bid, now eliminated from consideration, would not begin to cover even these defaulted loans. Selling this fiber optic network to a corporation for far less than it could be built for is a good deal for the corporation — but not for the taxpayers still holding the bag. Selling it to a cooperative in which local people can freely participate is the only option that provides the community with the potential to be repaid the misappropriated funds (about $1,500 per taxable property) and to reap further benefits into the future.
Maintaining the original ownership model and retiring restructured loans via the competent management and profitability now in place would have been better still, but city officials locked themselves and us into selling this valuable asset.
Approving the KBTL bid is an opportunity to secure quality telecom service for the community into the future. Corporate ownership puts the quality and the affordability of service at high risk and abandons any possibility of recouping misappropriated funds. KBTL is an opportunity Burlington would be foolish to cast aside.
