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Burlington City Councilors Choose Burlington Telecom Buyer

Burlington City Council meeting 11-6-17
Pat Bradley/WAMC
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Burlington City Council (file photo)

After weeks of twists and turns, Burlington city councilors made their final decision on which of four bidders will buy the city’s cable and broadband provider. Monday’s marathon meeting lasted into the early morning hours.
In 2009 it was revealed that Burlington Telecom, the city-owned telecommunications utility, had spent $17 million in taxpayer money without authorization for operations costs.  A settlement with CitiBank and other entities required that Burlington Telecom be sold.

Two weeks ago, the council failed to choose between two finalists and decided to return two previous bidders to consideration.  
The council on Monday held an early work session to allow councilors to quiz the bidders.  The duration was spent examining returned bidders ZRF and Schurz Communications.  ZRF founder Faisal Nisar explained that the two companies had submitted a Letter of Intent based on a partnership with ZRF the dominant partner.  “We had the same vision. There were aspects in our proposal which Schurz became part of our vision. And that is how the tech development, community development and how what I would say the two plans worked very well together.”

In an effort to keep on schedule Council President Jane Knodell closed the work session and opened the regular session.  After routine business public comment was taken.   While some spoke about local control or fears a corporate owner would sell Burlington Telecom again in a few years, the key theme that emerged was net neutrality concerns. Resident Richard Bragg said the federal rollback of net neutrality must be considered during the sale.  “Have you thought about that really?  This is a complete uncertainty that we’re heading into here. The only stability that we’ll have, any voice that we’ll have is to have it in a cooperative.”
City Council President Jane Knodell:  “Thank you. Lynn Martin.”
Martin:  “We need to consider the current political climate and understand that net neutrality may fall nationally. Probably will. If net neutrality is lost Burlington Telecom will become even more valuable to those who might want to sell it off.”

Following just over an hour of public comment and other items of city business, the council turned its attention to selecting a final buyer.  A short recess was intended, but it stretched on and President Knodell apologized, noting members were “exploring different options.”  The panel discussed and eventually approved the voting process. Then another lengthy recess occurred.  When the council reconvened the representatives from Schurz and ZRF were brought back.  President Todd Schurz explained that the two companies had modified their bid.  “We’re coming back with still a partnership between us but our partnership is switched. What we’re proposing is basically taking elements out of Schurz’ last LOI and melding them with the LOI that you received from us Monday of last week and the updated one today. So it would be the old Schurz price of 30.8 million, all of the elements of the ZRF bid. It would be Schurz as the owner.”

The revised proposal confused, pleased and angered councilors.  Ward 7 Democrat/Progressive Ali Dieng wanted clarification before any vote was taken. “This is a question for the attorney. When were the LOI’s due?”
Attorney:  “Last Monday at 9 a.m.”
Dieng:  “And today we are one week after and it sounds like this is a total new LOI presenting to us.”
City Council ProTem Beth Anderson:  “Councilor Tracy.”
Ward 2 Progressive Max Tracy:   “We came into this meeting thinking that we were going to be debating one LOI and midstream out of the view of the public we got a completely different LOI that was negotiated out there in the hall out of public view. I haven’t even had a chance to look at it in any way. It’s just a slap in the face to the public process that’s happened here.”
City Council ProTem Beth Anderson:  “Councilor Wright”
Ward 4 Republican Kurt Wright: “I’m excited as hell about this change.  I think it gives us the best of both worlds in this. And I hope that we have found the sweet spot with a proposal that a majority of the council can once and for all get behind and move us forward.”

By 1 a.m. the mayor and councilors had the revised LOI. Mayor Miro Weinberger said it was the most challenging decision brought before the council in his five and a half years leading the city.  “I know everyone sitting here at this table has worked extremely hard on this issue and has had the interest of  Burlington in mind in trying to bring this to as good a resolution as possible. And as painful as this process has been the bids have gotten substantially better over the last couple months.”

Councilors voted in two rounds.  In the first they eliminated the highest bidder, Ting.  The next vote eliminated the local coop KBTL — Keep Burlington Telecom Local — to choose the Schurz-ZRF partnership.  “Two for KBTL and eight for Schurz. So the final vote is for Schurz as the party to move forward.”

The mayor must approve the choice and then forward it to the Vermont Public Utility Commission for review.  

Audio of the city council meeting is courtesy of the live webstream from Channel 17 Town Meeting Television.

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