Council reverses course on FTTH
Fiber to the Home, has a white knight to rescue the floundering company. But before Jeffrey Feldman could be the hero, he needed the Rosemount City Council to change its tune.
On Wednesday night during a special meeting the council did just that and voted 4-0 to grant FTTH a six-month extension on revoking its franchise license for cable television services. Council member Kurt Bills was absent from the special meeting.
Just one week after the council denied a three-month extension request from the company, the council voted to give the longer extension after hearing a presentation by Feldman.
Feldman, the CEO of Everest TV Inc., is interested in purchasing FTTH from its parent company, Rudder Capital. With experience on the operating and financial fronts of the telecommunications business, Feldman said he thinks FTTH could be a viable company under the right ownership.
Executives from FTTH and Everest have been working on a deal for Everest to buy the business but Feldman said the transaction couldn't continue without a good standing cable franchise agreement with the city.
Feldman said his company will pay 80 percent of the cost to acquire FTTH. The other 20 percent will come from investors. While he didn't give specific names, Feldman said there is interest.
The council voted in July to revoke its franchise with FTTH after the company failed to comply with a deal to expand service throughout the city. The council gave the company 90 days to inform customers and find a possible buyer.
Last week the council voted 3-2 to not give FTTH an extension when all city staff could present was scant information about a possible buyer.
FTTH provides cable, internet and telephone services in the Evermoor neighborhood. In its agreement with the city the company had planned to build out services to the rest of the city in phases. Because of financial troubles the company has not completed the rest of the build out.
Extending fiber services to the rest of the community was a key component for council members. Attorney Robert Vose said in a meeting held earlier in the day with the representatives of both companies that the city would like the build out to happen as quickly as possible.
Council member Kim Shoe-Corrigan reiterated that sentiment, saying she wanted to make sure Everest could make an investment in the community and that it could do it in a reasonable time frame.
"I hear loud and clear that you folks aren't happy where things stand," said Feldman. He added that he plans to rectify what FTTH has failed to do in the past.
With the extension, Vose said it would be in the best interest of all three parties to move the sale along as quickly as possible.
Feldman said he hoped to close on the deal sometime around Thanksgiving.
Clyde Alhquist, an attorney with FTTH, said the two companies would put together a purchase agreement quickly. He said with the purchase agreement FTTH could ask for approval of sale from the Minnesota Public Utilities Commission which is necessary for the completion of the transaction.
Alhquist thought it would take until the end of the year to officially close on the purchase.
The council extended the revocation date for FTTH until April 21, 2010. The council requested updates from city staff as progress is made.