At around 12:30 this morning, the City Council unanimously gave the okay to sell the city’s troubled telecom to Comcast for $17 million (all told, they’ve netted the system’s bond holders $15.2 million in the deal). The sale will close Friday.
Voters approved the creation of the telecom a decade ago, apparently with the expectation that it could help support the Island’s electric utility through deregulation (oh, the irony!) and the hope that it would offer an alternative in what was an underserved market. Well, we’ve all got the benefit of hindsight now, eh?
Even with the pre-vote Oscar speeches (“I’d like to thank the general manager, the employees, the subscribers”), the council spent less time closing what has been a very financially painful chapter in Alameda’s history than it did mulling plans for the old Chevy’s (hellooo, offices!). Though it being 12:30, I guess you could say I’m grateful.
Still, the impacts could continue in the form of lawsuits already filed by two bondholders and potentially more to come. The holders of 95 percent of the $33 million in bonds the city took out to finish the telecom system consented to its sale, meaning they’ll take the money they are getting. But they have retained their right to sue.
Some members of the council – hey, they’re not just the outfit that decided the telecom’s future, they’re also customers – said this was a tough decision because they liked having a municipal cable outfit. Except for the part about it maybe draining us dry.
We’re sure we’ll have more to come on this one, so stay tuned.