The 2017 KBTL Annual Meeting took place on Tuesday, December 19 at 7:00 PM at the Community Room of the Robert Miller Community and Recreation Center. The Board wishes to thank the Center for the efforts of their staff to ensure that the meeting went smoothly. The Board also wishes to thank City Market  for their generous donation of coffee and members who donated refreshments.

Board Members Present: Alan Matson, Andy Montroll, Al Wagener, David Lansky, Megan Epler Wood


1. Welcome – Alan Matson

a. Call to Order – 7:21 PM

b. Alan Matson acknowledged efforts of

1. KBTL Board Members, including Dave Mount who was not present.

2. In the spirit of Cooperatives helping cooperatives, Alan introduced John Tashiro, GM of City

Market and suggested that KBTL investors may want to consider City Market’s loan offering.

City Market has been a staunch supporter of KBTL throughout our campaign to acquire BT.

3. Vermont State Employees Credit Union was highly supportive, and had we been successful,

would have been a source of capital for us.

4. Milk Money Vermont did a lot of extra work to help us craft our public offering.

5. Peter Jewett and Burlington Bytes hosted and helped design our website, along with Casey

Lyon, of Data Systems, who programmed our online membership and elections platforms and

Alex Chaffee, who created a much needed “makeover” for our Home Page.

6. The Cooperative Fund of New England and Co-Bank, which spent a lot of time talking with us

and, as with VSECU, had we been successful, would have been a source of capital for us.

7. Shay Totten, of Rights and Democracy, and the rest of the KBTL Outreach Group

2. Summary of Bidding Process

Alan Matson summarized key events in the bidding process, including one that occurred on the weekend after Labor Day, when we were asked to drop out by Mayor, BTAB, and some City Council members. We refused. The constantly strengthening support from the Community was vital in keeping our offer active.

Megan Epler Wood noted that there were frequent instances where certain disparaging terminology (“debt-laden bid”) was used repeatedly to attack the credibility of our bid, which forced the Board to repeatedly organize to defend our bid against mis-characterizations.

Alan Matson noted that shortly after we refused to drop out, the threat of a Citibank lawsuit was being emphasized.

Andy Montroll – The goalposts of what was asked for by the Council seemed to change almost daily.

Alan Matson – There should have been a candidate selected well before October 1. By that time, we needed to start moving on to transition.

Andy Montroll – When it came down to us and Ting and we were asked to have talks with them, we found a place where we might have been able to work together, but it wouldn’t have been a co-op and we wouldn’t have been able to buy into it due to our Maine Fiber funds relying on the collateral of the business, which, in that situation, would be owned by Ting. We had similar talks with Schurz, ZRF, and several other groups prior, all with the same general issues. In each case we would have lost both cooperative ownership and local control.

David Lansky – The Co-op comes to the table with a lot of value in community equity, a lot of value in community participation. Other parties come to the table with equity (money).

Andy Montroll – Lots of money.

David Lansky – All decisions come down to what percentage of equity do you bring to the table. If the conversation is “ what percentage of equity do you bring to the table?”, and the co-op isn’t bringing equity (money), the co-op is bringing something that’s measured in other ways, the conversation doesn’t turn into a partnership.

Andy Montroll – So, ultimately, what we needed was the loan. The only way to fund this was through a loan, which is what Main Fiber gave us, and we were never able to improve on the interest rate, which was something that was a big issue for many and realistically we couldn’t raise significantly more funds to be able to match with the others and frankly…

Alan Wagener – The business would not have supported it. It would not have been prudent.

Andy Montroll – When you look at it from our perspective, our bid was $12 M plus the $17 M of, in essence, community equity ($29M), because it’s staying here, within the community. But when you look at it in strict financial terms, it was just a $12M bid trying to compete against the $30M bids and we could never get there.

Megan Epler Wood – In the end, it came down to “corporate social responsibility” bids that got support even from the progressives, like Jane Knodell vs. genuine community equity. No matter how we tried to position the idea of community equity, the current City Council and the Mayor were not buying that as a concept.

Open Discussion

There was lively discussion on this topic, with many comments and some questions from KBTL members.

Q. KBTL member: Was a City-Co-op partnership off the table?

A: Andy Montroll. – That was off the table because of the Settlement.

A: Alan Matson. We did make overtures to BED, but those didn’t lead to anything.

Comment, KBTL member: When I saw our bid I was so proud of what you had done and so proud to be a member of the co-op. To me, $12M vs $30 M was a slam dunk. We were the only one that met the criteria. The City was hostile to public involvement from the beginning and throughout. I’ve never been more ashamed of the City Council.

Comment, KBTL member: I think it was not from lack of effort. You worked really, really hard. But I think even if you had worked 10 times as hard, it wouldn’t have happened, because the Mayor and the City Council didn’t understand what cooperatives are all about. Some of us tried to educate our City councillors all through the summer, in the public forums, but I didn’t see any learning happening on the City Council. We need to do a better job of educating our citizens and public officials about co-ops.

Comment, Andy Montroll – In the same vein, the other 2 bids had guarantees that they wouldn’t raise rates over a certain period of time. Ours didn’t and we heard a lot of complaints about that. They couldn’t grasp the idea that it would not make sense for us to raise rates on ourselves, unless it was necessary. So, a promise to not raise rates would be both unnecessary and foolhardy.

Comment, KBTL member: Or do you think that there was an element of wanting to break the model of the Sanders era, a feeling of , “We’re going to run the City more professionally, now.”?

Comment, KBTL member: I don’t think it was a lack of understanding of co-ops. I think there was something else going on, either what what the last comment said or some pre-determined decision.

Q: KBTL Member: Have you talked to other co-ops who had gone through this?

A: Alan Matson – We have talked to other telecom co-ops, some of them have acquired private telecoms, but most of them have been established as co-ops to begin with, rather than acquiring a municipal co-op as we are doing.

KBTL Member: I think if we had been able to offer something more in the ballpark of the other offers, like $25 M, it would have been a different story. I had expected that some progressive funders would have stepped up, but they didn’t. Seeing that not happen was discouraging to me. Also, considering that access to those people was withheld from us is telling as well. So, thinking about the future of cooperative projects in town, we need infrastructure that can move on opportunities.

Comment, Alan Matson – I would like to follow up on this, too.

KBTL member: We didn’t adaquately address Seniors and low income people.

KBTL member: I was struck by lack of Council understanding of co-ops. Also, was distressed by the Mayor’s constantly telegraphing that BT would go to a private company. This display of bad government, witnessed by everyone, could be an event that could prompt people to put the City on a better path.

KBTL member: If we’re going to move forward, we need to understand why people like Ben & Jerry wouldn’t support a venture like this. Why didn’t Bernie? And I think we ought to think about going outside of Vermont. There are a lot of people outside of VT who care about these things. We also need to better understand the Mayor’s influence. Also, I think there’s a class issue here: It was mentioned not going out to Seniors, not going out to regular folks. It could be just assuming that a co-op is a good thing. I would put in that you’re not going to raise rates because most people, what they care about is their bill. I think a real sensitivity to where most people are coming from, most working people, would be important in the future. Finally, Schurz is a bad company for Burlington, because they’re aligned with the conservative right.

3. Current Status

a. Financial Report

Over the past 4 years, we’ve raised over $26,000 from about 250 members, which has been used for

consulting fees, Public Offering, legal fees, marketing (signs, flyers, Front Porch Forum, etc.) IT

expenses, and member meeting place rental fees.

We received many hours of pro bono financial and legal assistance from Alan Matson and Andy


b. Board of Directors – Megan Epler Wood and Alan Matson are stepping down, others will stay on.

This means that there will be 3 open seats. We plan to schedule a meeting in January, 2018.

4. What Next?

Open Discussion

Comment, KBTL member: Re the Statement, be clear that no matter what promises are made by Schurz, there is no way to enforce them if Schurz decides to sell in two years. We need to make it clear that none of these promises mean anything. We want to demand these things but we don’t have any illusions that the promises will be kept.

Comment, KBTL member: There’s nothing in the LOI that would provide a monetary penalty if the promises are not kept. The real problem all along has been a conflict of interest. The Mayor has wanted a private owner since before he was elected. I don’t see the value of thanking the Mayor in a statement.

Comment, KBTL member suggested, that in the section on right of first-refusal, consumer co-op first, then worker co-op or ESOP.

Comment, KBTL member : On BTVIgnite (#3 in Statement): Other Ignite cities are assuming more than 1g (gigabits/second) speed i.e., 6g. We should state that we BT should increase as well, not just stay at 1g.

Comment, KBTL member: Related to that, the original vision for BT was that it would be an open network. City Council could make that part of the contract.

David Lansky: I’ve had some conversations with the City outside counsel and Schurz about if the City decides not to exercise its right of first refusal, the City could use its carried interest to take 100% ownership of fiber to the home and the residential equipment, which would put the City in the position of owning and controlling whoever’s operating it.

Comment, KBTL member: I propose that a small group get together and put something together.

Alan Matson: I would add that if that comes together, then the Board would have the authorization to release the statement. We could do this by consensus. Unless there’s strong opposition, the Board could be authorized…

Comment, KBTL member: I’m in full support. I would encourage collapsing these points into a smaller number of suggestions.

Comment, KBTL member: I’m reluctant to do this until we’ve raised certain concerns. 1. There’s now a public Records request for City communications with City Bank. 2. There’s a 7 Days request for emails. 3. Schurz uses same lobbyists as Rupert Murdoch. What does this mean for a progressive community like Burlington? This could bring us help from people elsewhere in the country. This is a fight for the progressive soul of Burlington. We should raise some of these issues.

Megan Epler Wood: How do we manage this as a co-op? How do we want to proceed in formulating positions?

Comment, KBTL member: It sounds like we have a proposal to form a committee to work on tis further. Do we want to move on that?

All present agreed to send an email to members asking for feedback on a shared Google Doc. Deadline: Thursday, 12/21.

A KBTL member noted that some people had expressed interest in exploring the idea of creating some kind of alternative ISP. He invited people to discuss the idea wih him further after the meeting, with a view to presenting some conclusions and recommendations about that at the next member meeting.

A KBTL member asked about a buyer’s club to negotiate terms and whether there’s a role for the co-op to play in the State regulatory process.

Alan Matson: We’ll try to get an understanding of what might be appropriate regarding the regulatory process. We’ll report on this as well on the buyer’s club and the alternative ISP at the January meeting. When we put out something to schedule the January meeting, we’ll try to capture the Timeline ideas, the business ideas, electing new Board members, as well as whether we want to change the nature of KBTL, which was created with a very specific purpose: To acquire BT.

Andy Montroll: There are two possibilities for the co-op to stay in existence: 1. Stand ready to step in if the deal with Schurz goes away. 2. What else there is for us to do. I think that is going to be an important discussion for us to have.

5. New business – None

6. Adjourn – 9:00 PM


By : Alan Wagener /January 15, 2018 /Burlington Telecom Co-op News, Meeting Notes & Agendas /0 Comment

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