Public Service Board Seeks Details on Telecom Lease
Burlington officials will update the Vermont Public Service Board about Burlington Telecom next Wednesday in Montpelier. The quasi-judicial board has asked the city to be prepared to answer questions about several key provisions of its now-terminated lease with CitiCapital.
In a memo issued today to city officials, the PSB announced it's holding a status conference on its investigation into Burlington Telecom at 11 a.m. at its offices on State Street in Montpelier.
Since Burlington asked for the status conference, the PSB is asking the city to draft an agenda. However, the PSB wants to be sure the city comes prepared to talk about the effect of its defunct lease agreement with CitiCapital on BT's ability to satisfy its certificate of public good — particularly Condition 4 of its CPG.
Condition 4 reads: "In no event shall BT abandon or curtail its service or abandon all or any part of its facilities, except after receiving approval of the Board."
Aside from that general request, the PSB is seeking specific information about elements of the master lease agreement with CitiCapital.
"Because of its relevance to the subject of the status conference, the board also requests that BT be prepared to discuss the terms, rights, and obligations of the respective parties under the master lease agreement with CitiCapital, including, but not limited to, sections 4 (Termination of Lease Term), 7 (Nonappropriation), 11 (Title; Security Agreement), 20 (Events of Default) and 21 (Remedies) and to provide additional information concerning the equipment subject to the lease (see Exhibit A to Master Lease-Schedule No. 001)," wrote PSB Clerk Susan Hudson in the memo.
The lease agreement and its exhibits can be found here: Download BT Exhibit Response DPS 3-37 12-11-09
Download the PSB memo to the city of Burlington here: Download MemoReBurlTelecomStatusConf
As a result of the termination, CitiCapital can repossess all of the equipment Burlington Telecom purchased with the borrowed $33.5 million, which could include all 180 miles of fiber-optic cable, the technological brains of the network and much more.
CitiCapital has not yet said if it will seek a complete return of all the equipment or leave it in place and lease it to another telecom provider. CitiCapital has also not said what additional remedies it may seek to recoup its money.
Burlington officials claim they are working on a plan to replace any and all equipment it's returning to CitiCapital, though have offered no specifics, and its unclear what financial institution would loan the city money after it's terminated a $33.5 million lease. Mayor Bob Kiss hinted that a second lease agreement with CitiCapital could be possible.
To date, Michel Guite of Vermont Telephone Company (VTel) has offered a small cash infusion and access to the some of the equipment BT needs to remain in business. Also, ReBoot BT has made a second bid to buy Burlington Telecom.
Along with the PSB investigtion, two other probes — one criminal and one financial — are nearing completion.