[T]he Indiana-based company will build out the Burlington Telecom network in the city and outlying areas over the next four years.
Schurz Communications has agreed to freeze rates for broadband service as part of a deal to purchase Burlington Telecom. The company pledges to keep rates level for a five-year period.
Those details are part of a purchase agreement that was released on Friday afternoon, just five days before the Burlington City Council takes a final vote on the deal.
Schurz Communications in a contract with the city and Blue Water Holdings has agreed to pay $30.8 million for the broadband company and to spend $6.2 million to $8.84 million on capital improvements to build out infrastructure in the city of Burlington and outlying areas, as previously planned, over the next four years. Under the agreement, the telecom network in the city would be completed by 2019.
The deal preserves net neutrality on the Burlington Telecom system. Customers will have free and equal access to the internet, under the plan and will not have to pay a fee for access to content.
The agreement allows the city to purchase one or two members seats on the seven-member Burlington Telecom Advisory Board, which oversees the city system. It is not clear how much the slots would cost. The members must be expert in telecom, communications or finance, according to the contract.
Schurz would lease BT buildings owned by the city in all six locations.
A financing partner, ZRF Partners, would work with the city to finalize details for community investments. Schurz has agreed to give BTV Ignite $250,000 annually over 10 years for seed capital to local startups. In addition, Schurz would give away another $50,000 a year for high school tech training and workforce development.
ZRF Partners had originally bid with Schurz for Burlington Telecom, but in the waning hours of a marathon Burlington City Council meeting that ended at 1:40 a.m., Schurz became the primary buyer.
The Burlington Telecom sale has dragged on for months. The Burlington City Council initially rejected the Schurz offer, then deadlocked over two other potential buyers in October. Afterward, the city invited Schurz back to the table.
Under the deal released on Friday, Schurz would be prohibited from selling Burlington Telecom if the deal meant that the new buyer would own 75 percent of the broadband market. This clause could prohibit a current provider that dominates the market, such as Comcast, from purchasing the city network. The city retains a first right of refusal on any sale and would have 90 days to respond.
Schurz has formed a subsidiary, Champlain Broadband, a Vermont limited liability company, for Burlington Telecom.
The addenda for the contract, including details regarding the allocation schedule for purchase payments to Blue Water Holdings, the owner of Burlington Telecom, were not released.
The Burlington City Council is voting on the contract Wednesday.
If the deal is OK’d, Schurz will submit a petition for state approval to the Public Utility Commission within 60 days.