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Tuesday, October 3, 2017

Dorman & Fawcett Won't Operate Burlington Telecom After Sale

Posted By on Tue, Oct 3, 2017 at 12:03 AM

click to enlarge Stephen Barraclough, left, and Terry Dorman - KATIE JICKLING
  • Katie Jickling
  • Stephen Barraclough, left, and Terry Dorman
The consulting company Dorman & Fawcett will not operate Burlington Telecom once the utility is sold, the firm's founder told the Burlington City Council Monday.

Questions about the company's future role with the telecom had arisen in recent weeks. All three potential buyers still in the running had previously expressed interest in keeping the firm on after the purchase.

Terry Dorman did not elaborate on the decision, which he announced as councilors peppered him and BT general manager Stephen Barraclough with questions about the remaining three bidders during a public forum at City Hall.

The city hired Dorman & Fawcett in 2009 to help resuscitate the failing telecom and to facilitate a sale. Barraclough came on as general manager in 2010. The firm stands to receive 10 percent of the BT sale price.

Within the coming weeks, the council must choose between a $12 million offer from the Keep BT Local co-op, a $30.8 million offer from Schurz Communications and a $27.5 million bid from Ting, which is based in Toronto.

A fourth bidder, ZRF Partners, withdrew for good last week after Dorman relayed concerns over a possible conflict of interest.

The council originally intended to use Monday's meeting to whittle the three bidders down to two. But the decision has been put off for two weeks and is now scheduled for October 16. The city must complete the sale by the end of the year to maximize its share of the profits.

Much of Monday's forum centered on KBTL. Councilors posed questions about risks to the city if it accepted the co-op's bid, or whether the co-op could meet standards set by the Public Utility Commission — even though the grassroots entity has never operated a telecom. Meanwhile, attendees offered strong words of support for the co-op during public comment; some held signs saying "Hands Off Our Internet, Keep BT Local."

The council also accepted a host of letters — almost all of which were in support of keeping the telecom locally owned.

But it wasn't all good news for the co-op. Burlington could face legal risk if it selects the $12 million bid proffered by KBTL , according to city attorney Eileen Blackwood.

"We are definitely confirming that there is risk" that the city's creditor, Citibank, could take legal action if Burlington doesn't select a bid that would allow the bank to maximize its share of the sales profit, according to Blackwood. The co-op's bid is the lowest of the three remaining potential buyers.

Blackwood said she could not specify how risky it might be. She also mentioned the co-op's lack of experience in the telecom field could be a potential "hurdle" when the PUC examines the sale.

Councilors also had questions for Dorman about selling BT to the other, higher bidders. Of particular interest: Would the profit interests of Schurz and Ting trump the needs and desires of Burlington taxpayers?

Dorman assured councilors that they can control the terms of the sale and write those terms into the contract. "I think the city has the opportunity to get whatever is important to the city in writing," he said.

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Katie Jickling

Katie Jickling

Katie Jickling is a Seven Days staff writer.

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