Burlington Residents Want To Buy Burlington Telecom

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A group of concerned residents in Burlington wants to create a co-operative to buy the city’s embattled telecommunications utility.

The grassroots idea comes as city officials are hoping to settle a federal lawsuit aimed at reclaiming taxpayer money from the municipally-owned Burlington Telecom.

Business consultant Alan Matson is helping to organize the co-op effort called "Keep Our Telecom Local." He says Burlington Telecom is a tremendous cable and broadband internet service that provides unrivaled value to Vermont’s largest city.

"When you can get the broadband levels up to one gigabit at this point, it’s a great product," Matson says. But beyond its broad technological range, Matson thinks Burlington Telecom is limited as a municipally-owned utility.

"Municipals have open meeting law. There are many bosses. New voters that don’t really allow it to be managed as well as it could be in a competitive environment," Matson says, listing what he sees as major hurdles.

The city faces a significant budget shortfall related to Burlington Telecom. The city spent $17 million of general fund money, which has contributed to a downgrade of the city’s debt by credit ratings agencies.

Mayor Miro Weinberger faces recovering that money and making Burlington Telecom, or "BT," a healthy utility again.

"What we’re doing is managing it competently," Weinberger says. "We have kept subscribers at a stable rate and we have kept the finance stable."

And Weinberger says the city has already begun to get out from under the debt. Last month, voters passed a $9 million fiscal stability bond that will largely help the city refinance.

The other outstanding issue for Burlington is with its lender CitiCapital, which financed the utility’s construction and now wants the equipment back or $33 million to pay for it.

A federal judge has ordered Burlington and CitiCapital to use mediation next month to try to settle the dispute.

Sitting in his corner office, Weinberger promises that the city will be prepared. "We are looking for multiple, multiple ways that we could reach some kind of resolution," Weinberger says.

Weinberger is open to the idea of a public cooperative buying Burlington Telecom, but the mayor says he can’t imagine a future for the telecommunications utility that doesn’t include a private partner. "The entity requires capital infusion for it to continue and compete in this dynamic, competitive telecommunication space," says Weinberger.

"The original idea of starting Burlington Telecom is and was right: a community-owned and driven telecom," says Matson, whose group hopes to return to that idea.

The concept of a co-op, Matson says, is not a panacea for Burlington Telecom’s financial woes. But if its resident-subscriber members were more actively involved, he argues the co-op rather than city officials could better deal with other obstacles.

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