Burlington Telecom sold to Schurz, ZRF Partners, in surprise decision

BURLINGTON — If you attended Monday’s Burlington City Council meeting expecting a swift decision on a buyer of Burlington Telecom, you were in for a long and tedious wait.

City councilors, who began filing into Contois Auditorium for the meeting at 5:30 p.m., got around to voting after midnight.

Burlington Telecom is a broadband company that provides Burlington residents with internet, television and telephone services — all on a fiber-optic network.

After a nearly two-hour-long adjournment in which city council members huddled about the Burlington Telecom decision, a surprise conclusion was reached: councilors selected Schurz Communications and ZRF Partners as the new owners of Burlington Telecom. Schurz had been eliminated from the final bidding last month, but returned in a surprise move with a surprise offer.

The 8-2 council vote incorporated an unusual “Hail Mary” option that was introduced to councilors in the hallway during the protracted meeting.

While Schurz had been eliminated as a bidder on Oct. 16, the Indiana-based media corporation charged back into the game with a $30.8 million offer, while joining forces with a little known minority bidder called ZRF Partners.

Schurz CEO Todd Schurz represented Schurz Communications, the majority stakeholder, and Faisal Nisar represented ZRF Partners, the minority stakeholder in the new arrangement with the City of Burlington.

Schurz admitted during the meeting that the deal between Schurz-ZRF and the city had been worked out in about 15 minutes. The deal, which now incorporates ZRF, is essentially the same Schurz offer made in October. There are details, he noted, that “have yet to be ironed out.”

According to Nisar, ZRF would handle the human resources, education and internship programs, and community outreach liaison work. Schurz will manage the business and technical side of the utility.

“This has got to be the best of both worlds,” Councilor Kurt Wright, R-Ward 4, said.

Wright joined the majority of eight councilors in voting in favor of the offer by Schurz-ZRF.

Two councilors, Richard Deane, D-East District, and Joan Shannon, D-South District, abstained in the voting.

Two other councilors, recently elected Ali Dieng, D/P-Ward 7, and Max Tracy, P-Ward 2, voted no, preferring local bidder Keep BT Local (KBTL), a cooperative of local Burlington residents.

The meeting which continued into the early morning hours made attendees and councilors happy or cranky, depending on the bidders they favored or their state of wakefulness.

City Council President Jane Knodell took the lead among the council members, stating that the final decision, a surprise to most in the auditorium, was good for Burlingtonians.

“The KBTL and Tucows/Ting bids … (were) two very opposite proposals and we were getting deadlocked between those two opposites, and I was saying we needed to find something in the middle,” Knodell said. ” … That eventually led to us inviting back Schurz and ZRF.”

But other councilors and residents in the audience weren’t buying Knodell’s or Wright’s positive spin.

“I have never seen a less transparent offer than bringing in a completely new offer when everybody’s asleep,” Councilor Shannon said after the surprise Schurz-ZRF deal was presented and decided.

Shannon, clearly miffed, abstained in the voting round, all the while citing her staunch support of finalist bidder Tucows, a Canadian-based telecom firm.

KBTL, another favored finalist, had offered a bid of $12 million to $18 million but was also turned down.

Burlington residents had an open forum opportunity to ask council members, as well as bidders, questions about the deal or even offer personal opinions prior to the vote. Of concern to several residents was how a private entity would handle customer privacy compared to the telecom’s history of keeping customer details private.

“We are committed,” said Nisar. ” … (We believe) privacy should be respected, and all (online) traffic should be treated the same.”

Lou Varricchio is a freelance reporter for True North Reports. Send him news tips at lvinvt@gmx.com.

Image courtesy of Burlington Telecom
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