The wheeling and dealing that led to the Burlington Telecom deal

Published: Nov. 28, 2017 at 6:02 PM EST
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A late-night deal means Burlington has a final bidder for Burlington Telecom. The winner-- Schurz Communications working with investor ZRF. Councilors say the $31 million bid will help the city avoid some of the legal threats lingering around the sale. But how the deal was done still leaves questions about the future of BT.

Burlington's City Council worked into the early morning hours to reach consensus on who should buy Burlington Telecom, and reviews of how it went are mixed.

"I think that last night was an embarrassment for the Council," said Joan Shannon, D-Burlington City Council

"I'm very excited. I think it's a great deal," said Kurt Wright, R-Burlington City Council.

Councilors struggled-- again-- to agree on a bid. The deep divisions and philosophical differences erupted at times.

Joan Shannon: So you did not meet with President Knodell or Councilor Wright?

David Hartnett: Point of order! Because that needs to be explained.

Kurt Wright: No, there were no more meetings than were any different than you attended, Councilor Shannon.

Some drama in the meeting, but also wheeling and dealing during the recesses. And that's much of the criticism in the aftermath. The final bid winning 8-2 approval from the Council early in the morning was not one of the original bids.

"It was a very messy and sloppy process, there's no question. But, you know, democracy is sloppy and messy sometimes," Wright said.

Ting offered about $32 million and was knocked out in the first round of voting Monday. KBTL offered up to $18 million and got only two votes in the next round of voting. The winning bid was a reconfigured combination of Schurz and ZRF with the partners switching roles, so Schurz could take the lead as the owner-operator, paying about $31 million, and ZRF taking the role of minority investor.

"I can't think of a less transparent process than coming up with-- after years of developing offers and months of bringing finalists to the table-- develop a new offer on the backs of envelopes and napkins after midnight," Shannon said.

Shannon, like her Democratic colleagues and Mayor Miro Weinberger, had been strong supporters of Ting and its innovative entrepreneurial approach.

Schurz is a deep-pocketed family-owned cable company based in Indiana. Supporters say its new bid is just a mix of bids made earlier in the process, combining longtime industry experience with the innovation promised by ZRF, an investment group based in New Jersey.

Schurz CEO Todd Schurz told WCAX News he did not expect this outcome when he first went into the City Council meeting Monday night.

"Our company is deeply honored to be in this position. We will do our very best to help Burlington Telecom fulfill its promise," Schurz said.

The company says it has a history of keeping local management and operating style in place and it wants to keep BT employees, customer service and expansion plans. The exact details of its bid are being pulled together and will be sent to the city later this week.

Mayor Miro Weinberger invested a lot of time in this BT bid process. He declined an on-camera interview, but in a statement said: "In the coming days, I will be working hard on behalf of Burlingtonians and BT employees to negotiate in writing what Todd Schurz and Faisal Nisar verbally committed to at last night's City Council meeting. I will ensure that the final agreement includes clear provisions regarding internet affordability, customer service, net neutrality, bridging the Digital Divide, and other items that reflect our community's values."

The Vermont Public Utility Commission will also have to sign off on the deal.