Burlington Officials Choose Final Bidders For Burlington Telecom

Oct 17, 2017

The Burlington City Council narrowed the number of bidders seeking to buy Burlington Telecom to two on Monday night.  The council faced an auditorium filled with residents supporting the only local bidder – a co-op that councilors and the mayor have expressed some hesitancy over.

In 2009 it was revealed that Burlington Telecom, the city telecommunications utility, had spent $17 million in taxpayer money without authorization for operations costs.  A settlement with City Bank included a requirement that Burlington Telecom be sold.

Monday night, three of the original eight bidders remained.  City councilors were set to eliminate one. Schurtz Communications, based in Indiana, bid nearly $31 million.  Ting, out of Toronto and owned by Tucows, bid $27.5 million.  The local co-op KBTL, or Keep Burlington Telecom Local, submitted a bid of $12 million.  

The public forum prior to the city council’s deliberation was dominated by residents pleading with leaders to keep the local bid in the running.   “Hi there Dave Mahr, I live in the new North End. You will hear a number of emotional pleas in support of Keep Burlington Telecom Local. But I urge you to take the advice of a Nobel Prize winning economist, Richard Thaler, and base your decision on the facts and figures versus your emotions.”
Council President Jane Knodell:   “Dean Corren.”
Corren:  “Not only is the coop a very viable offer but it is the only one that meets the key criterion of keeping control local.”
Knodell:  “John Caulo.”
Caulo:  “I wanted to speak in favor of the Schurtz and Ting proposals. We’ve got two proposals that are fairly equally valued. Contrast that with the local option which is somewhat undervalued. This transaction and whom you select will have a bearing on the future vitality of our community.”
“So I’m Tom Hyde, I’m from Ward 6 and I think it’s really important that the reason that we’ve been told that City Bank would sue the city if the Keep BT Local bid is accepted, that should be disclosed.”

After more than an hour of comment, the council moved to its agenda.   For about two hours the dozen city representatives discussed  the resolution to narrow the Burlington Telecom sales candidates.  It became obvious that the local co-op had the votes to move forward to the final round despite reservations.

Ward 8 Independent Adam Roof addressed the emotion that has been swirling over the deliberations.  “I am not fearful or scared or intimidated by the CitiBank potential lawsuit.  Nor am I intimidated or fearful or directed by the mayor and his opinions.  I do think that KBTL for me has a long way to go to mitigate the concerns that I have especially around the financial dynamics.”

East District Democrat Richard Deane emphasized that this is not the final vote the council will make regarding the sale of Burlington Telecom.  “I think we need to be certain of four critical points. That those two candidates that we choose are financially stable, that the chosen firm must have proven managerial and technical expertise. Third they have to have the best chance to be favorably evaluated by the Public Utility Commission. Finally they must offer the best assurance the $16.9 million of taxpayer funds that were inappropriately allocated by a previous administration are returned.”

City Council Pro-Tem Beth Anderson announced the result of the vote.  “The vote has resulted in six votes for Keep Burlington Telecom Local, five votes for Ting and one vote for Schurtz.  So we will go forward with Keep Burlington Telecom Local and Ting.”

The city council will take a final vote in two weeks to decide which of the two bids will be forwarded to the Vermont Public Utility Commission.