Leopold staunchly defends Burlington Telecom, creditor extends deadline

first_imgby Kevin Kelley. The City of Burlington announced September 30 that an agreement had been reached with CitiCapital to extend the period of forbearance ‘ set to expire on the 30th ‘ to October 29, 2010, with respect to payments under Burlington’s lease-purchase agreement with CitiCapital for Burlington Telecom. Negotiations between Burlington and CitiCapital are ongoing and will continue during the forbearance period, according to a statement from Joe Reinert, Assistant to the Mayor.As Burlington Telecom conducts these life-or-death negotiations with its creditor, the city official at the center of the drama says he is optimistic about BT’s future and is unapologetic about the decision to build a publicly owned fiber optic network. ‘We’re laying the groundwork for increases in customers, revenue and profitability for Burlington Telecom,’ Chief Administrative Officer Jonathan Leopold said in a September 21 interview.Asked if that means the city is likely to retain control of BT, Leopold said ‘not necessarily,’ but declined to comment further about the status of talks with CitiCapital. He also would not reveal the contents of a proposal that Burlington has made to CitiCapital for stabilizing the finances of the city-owned telecom system.The lender agreed in July to a 90-day period of ‘forbearance’ in regard to the nearly $1.8 million in principal and interest payments that the city has failed to make over the past nine months. That deadline now has been extended another 30 days in an attempt to make a deal.BT owes CitiCapital a total of $33.5 million. The creditor could move to take control of the telecom system if the city remains unable to make good on that debt.Burlington Telecom also owes a city cash pool $16.9 million that was borrowed over the course of two years in order to keep the operation afloat. That arrangement ignited a political firestorm. State officials said BT violated its licensing conditions by failing to repay that money and by leaving Burlington taxpayers potentially liable for a debt that the city was prohibited from incurring in the first place.In a September filing with the state Public Service Board, Burlington admits it failed to honor its obligation to repay the cash pool within two months. The city also acknowledges that it violated another state licensing condition by not putting the full BT fiber-optic network in place by mid-September 2008. Nearly 2,000 addresses in the city are still outside the reach of the BT system.‘In hindsight, there definitely were mistakes,’ Leopold said in the interview in his City Hall office. But he strongly defended the city’s decision to establish its own telecom network, arguing that the private sector has shown itself unwilling to invest in top-quality networks in small states such as Vermont.The city was ‘very successful,’ Leopold said, in installing ‘state-of-the-art fiber-optic technology’ in most of BT’s potential service territory. The city was less successful, however, in making BT a viable enterprise, partly because attention was focused until late in 2007 on building the telecom network.‘We’ve seen in the years since then that there is a steep learning curve’ for city officials without extensive experience in running a profitable telecom business, Leopold added.A private company might have been better run, but it would never have made the sort of investment that put BT on a par with the most advanced telecom operations, Leopold continued.‘If you’re a private telecom firm with $50 million to invest, are you going to put it in a place like Manhattan or Boston, or are you going to put it in a thinly populated state like Vermont?’ Leopold asked rhetorically. ‘If government doesn’t get involved, it just won’t happen here.‘The private sector model [for telecom expansion and upgrades] has been demonstrably unsuccessful over the past 20 years,’ he declared, citing studies showing telecom networks in the United States lagging far behind those in some European and Asian countries that have committed public funds to network development.High-speed telecom systems should be seen as ‘the critical infrastructure of the 21st century,’ Leopold suggested. And he drew an analogy to the interstate highway system that was critical to US economic development in the 20th century. Government built that nationwide road network because the private sector would not or could not, Leopold noted.He also sees irony in the $171 million federal subsidy recently provided to three private telecom companies in Vermont for broadband development. (See accompanying story.) ‘Burlington taxpayers are prohibited from subsidizing BT, but it’s perfectly all right to take $171 million in public money and give it to private enterprise,’ Leopold observed. ‘How does that make sense?’Source: Vermont Business Magazine.last_img read more

SBA to resume accepting PPP loan applications 10:30 ET Monday

first_imgAdministrator of the U.S. Small Business Administration Jovita Carranza and Treasury Secretary Steven Mnuchin said the SBA will resume accepting Paycheck Protection Program (PPP) loan applications Monday, April 27 at 10:30 a.m. (ET) from approved lenders on behalf of any eligible borrower. President Donald Trump signed legislation Friday authorizing an additional $310 billion for the PPP.“We encourage all approved lenders to process loan applications previously submitted by eligible borrowers and disburse funds expeditiously. All eligible borrowers who need these funds should work with an approved lender to apply,” Carranza and Mnuchin said in a joint statement.According to the SBA, the PPP has supported more than 1.66 million small businesses and protected over 30 million jobs since it began accepting loan applications April 3. Those loans include tens of thousands from credit unions, with early estimates indicating that credit union loans averaged around $64,000 per loan. continue reading » ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img read more