BURLINGTON — The City Council tabled a vote on the selection of a buyer for Burlington Telecom following one councilor’s 11th hour recusal.
Councilors were expected to decide between a $30.5 million offer from mobile phone and internet provider Ting and a $12 million offer from the Keep Burlington Telecom Local co-operative.
That decision is now likely to be made at a Nov. 6 meeting.
City Councilor Karen Paul, D-Ward 6, recused herself, citing a previously undisclosed conflict of interest. Her announcement derailed a hotly anticipated vote on the future internet, cable and phone provider.
“I have a professional conflict of interest that came to light over the weekend,” Paul said. “I’m not able to speak directly to this conflict, but I would like to state that my conflict has nothing whatsoever to do with the parties seeking to buy Burlington Telecom.”
Paul’s disclosure led City Councilor Dave Hartnett, R/D-North District, to call for the delay, saying he was uncomfortable with Paul having cast previous votes in the sale process. “I have a huge issue with that, and I’m not so sure where we stand on that legally,” Hartnett said.
Hartnett said he believed councilors should also have more time to sift through developments that emerged over the weekend, including the threat of a lawsuit brought by Citibank should Burlington Telecom be sold to the co-op.
Other councilors said they already knew about the likelihood of a Citibank suit and felt an obligation to vote Monday. City Councilor Ali Dieng, D-Ward 7, supported the delay, saying it’s worth taking more time to get the best outcome.
City Attorney Eileen Blackwood said she was aware of no legal ramifications to Paul’s recusal, and the motion to delay initially failed. As the night dragged on, with councilors questioning Ting’s CEO and the co-op’s board chair, City Councilor Kurt Wright, R-Ward 4, called for councilors to reconsider tabling the vote.
Mayor Miro Weinberger insisted that the council take action and end a decade of turmoil brought on by Burlington Telecom’s financial struggles.
“The strange thing that’s happening is the supporters for Ting are sitting here ready to vote, and the KBTL supporters are not, and what is going on? It’s time for a vote,” Weinberger said.
Wright asked the mayor if he would overrule the council with a veto should they select KBTL.
Weinberger ducked the question. “I’d have to look really carefully at that should it make it to my desk,” Weinberger said.
The mayor has made his preference for Ting clear, citing legal and regulatory challenges faced by the co-op. He has said he favors Ting because the company has stronger financial backing.
To override a mayoral veto, the City Council would need a two-thirds majority. If the veto were to be sustained, the council would have to take another vote on the sale.
During several hours of comment from the public, input was decidedly more mixed than at previous meetings where KBTL supporters had dominated the discussion. Supporters of Ting characterized the company’s bid as the safer option.
Ted Adler, founder and president of Union Street Media, said selling Burlington Telecom to Keep BT Local, a group with no experience with operating a fiber network, would create uncertainty for tech companies and other businesses in the city.
“It’s very clear if you’re looking at a balance sheet. It’s not clear if your looking at it through emotion,” Adler said.
Union Street Media was Burlington Telecom’s first commercial customer. Adler said the service got off to a rocky start, but eventually leveled out. Reliable internet service is essential for businesses like his, he said.
“If you sell to the KBTL co-op, I’m done,” Adler said.
The co-op’s supporters countered that KBTL will have the opportunity to hire competent managers with the help of an experienced board. Concerns raised about the co-op’s debt-financing ignore the viable debt-service ratio, conservative financial projections in its bid, they said.
Despite assurances from Ting CEO Elliot Noss that his company would be good stewards of Burlington Telecom’s local impact, KBTL supporters said without community ownership there’s no way to guard against a future sale to a cable giant.
“Selling this to a corporation is selling this to Comcast,” one speaker said. “(Ting) can say anything it wants in the moment, but its fiduciary responsibility is to its stockholders.”
