Tar Heel Tattler - October 2005

Progress whitewashes telco's wrong number
By Arthur O. Murray

Remember how Tom Sawyer tricked the neighborhood kids into paying him to let them whitewash his aunt’s fence? Tom got an apple, a kite, a dead rat and a string to swing it with, a key that didn’t unlock anything, a kitten with one eye and several other treasures for allowing the boys to fulfill his obligation to Aunt Polly.

ITC^DeltaCom Inc. did Tom a whole lot better. The West Point, Ga.-based telecommunications provider collected $1.9 million from Progress Energy Inc. this summer for letting the power company negotiate a deal to put its name on what used to be the BTI Center for Performing Arts in Raleigh.

What did ITC^DeltaCom give up? A contract that obliged it to pay the city $500,000 to keep the name of a dead company through 2017 on the downtown complex of theaters and music halls. ITC^DeltaCom inherited the contract two years ago when it bought BTI Telecom Corp., its smaller Raleigh-based rival (Tar Heel Tattler, August 2003).

Six years earlier, big spender Peter Loftin, BTI founder and CEO, had agreed to pay the city $3.1 million — $250,000 a year for 10 years, plus $600,000 in telecommunications services — for 20-year naming rights. The merger had erased BTI as an entity, but the contract didn’t allow ITC^DeltaCom to change the arts complex’s name or sell the rights to it without city approval.

Neither ITC^DeltaCom nor Progress would comment on the negotiations leading to the deal. City Attorney Tom McCormick says ITC^DeltaCom had been shopping the rights. Progress expressed interest after its 19-story Two Progress Plaza opened two blocks from the arts complex.

Lee Kimball, vice president of marketing for ITC^DeltaCom, notes that the company still has about 100 marketing and sales employees in Raleigh and denies that it was eager to get out of the contract. “We’re still doing a $50,000 gift in kind. We’re still very much a part of the Raleigh community. We evaluated potential name changes, but it was a great fit with Progress.”

It also is a great fit for the city, which collected about $2 million from BTI and ITC^DeltaCom under the original contract and got a new 20-year deal for $5.6 million from Progress. Even Progress is happy. “We are delighted to add our name to this world-class performing-arts center,” CEO Bob McGehee says.

Then again, Tom Sawyer’s friends were happy to whitewash Aunt Polly’s fence three times — and they paid far less than $1.9 million for the privilege.