Sunset Digital plans to buy BVU’s OptiNet division

Sunset Digital Communications Inc. in Duffield plans to buy the OptiNet division of Bristol Virginia Utilities Authority (BVU) for $50 million.

BVU’s board of directors has approved the deal, but it still faces review by various regulatory agencies. The Bristol, Va., City Council approved the sale on a 4-1 vote in mid-March.

OptiNet, a nonprofit division launched in 2001, provides telecommunication and information services to customers in Bristol and the surrounding area.

BVU was the first municipal utility in the United States to deploy an all-fiber network offering video, voice and data services.

The transaction would pay off OptiNet’s debt, while positioning Sunset to expand high-speed broadband to many of the region’s rural customers.

Sunset Digital, which currently serves about, 2,300 customers, would pick up 13,500 more and nearly double the geographic area it serves.

In addition to telecommunications, BVU provides electric, water and wastewater services.

Nearly six years ago, the city’s utilities board was succeeded by the BVU Authority Board, making BVU a subdivision of the state government.

A bill passed during this year’s General Assembly session would replace BVU’s nine-member board, most of whom were appointed by the city council, with a seven-member board. Appointment powers for the new board would be divided among the city council, the House speaker, a Senate committee, the Washington County Board of Supervisors and Abingdon Town Council.

The legislation was prompted by a federal corruption investigation begun more than three years ago into the solicitation of gifts and payments from BVU vendors. The probe has resulted in the conviction of seven former BVU officials and contractors.

A federal jury in February convicted former BVU chief financial officer Stacey Pomrenko on 14 charges including wire fraud and making false statements to the IRS. She is scheduled to be sentenced in June.

Former BVU CEO Wes Rosenbalm was sentenced in October to 33 months in prison after pleading guilty last summer to a charge of conspiracy to defraud the Internal Revenue Service.