CUDs Lead Affordable Fiber Revolution in Vermont

When it comes to affordable broadband, Vermont has always been a trailblazer. From early adoption of municipal broadband and cooperatives to more recent experimentation with CUD (Communications Union District) fiber deployments, the state’s efforts are inspiring communities nationwide looking for new, creative solutions for the stubborn digital divide. 

CUDs provide individual communities significantly more power and leverage through cross-community alliances and partnerships, allowing them to accomplish more than they could have by themselves.

Now, they’re a major part of Vermont’s plan to bring affordable access to every resident in the state. 

“It really is perfect for what we're trying to do here, because we want community engagement,  but trying to work with every single community in the state—all 252 of our towns—would be logistically a nightmare,” Vermont Community Broadband Board (VCBB) Executive Director Christine Hallquist told ISLR in a phone interview. 

Hallquist gives ample credit to Vermont lawmakers, who first created a legal framework for CUDs to operate under in 2015. That decision helped pave the way for a series of promising alternative deployments, including the East Central Vermont Fiber-to-the-Home network (EC Fiber), the first ever CUD in Vermont to help deploy more affordable access.

In 2021 the Vermont legislature passed Act 71, which ensured CUDs would play a key role in expanding affordable fiber access. A CUD is defined as a new municipal entity created by two or more towns with a goal of building communication infrastructure. In Vermont, municipally-led CUDs can legally fund needed broadband expansions through debt, grants, and donations—but not taxes, though they themselves are tax-exempt nonprofits.  

 “If you look at government bureaucracies, at both the federal and state level, it just takes too long to get things done,” Halquist said.

She added that despite the scale of what Vermont’s attempting, the CUD model winds up being easier to navigate, more accountable, and far more representative of the public interest. 

CUDs have a representative and alternate from every town on their board, and that ranges from Lamiolle CUD, which is the smallest and has 14 towns, to NEK Broadband, which has 57 towns. Some people would say that 57 people on a governing board becomes unwieldy. But it doesn't because you basically have an executive committee that makes the decisions, and you report monthly to your governing board and if they give you oversight feedback it really holds your feet to the fire. 

In the seven years since the state first took action, more than a dozen CUDs have been established or are currently under development. And those CUDs are well positioned to benefit from the estimated $200 to $300 million Vermont is expected to receive in broadband funding from the American Rescue Plan Act (ARPA) and Infrastructure Investment and Jobs Act (IIJA).

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“Our rural areas average eight passings per mile,” Hallquist said. “There's no financial viability to that. We're lucky to get one provider, let alone multiple providers.”

State leaders say a significant portion of Vermont’s $150 million ARPA-based broadband package will go toward assisting CUDs in a state where 85 percent of municipalities and 90 percent of all underserved locations fall under an existing CUD’s jurisdiction. Over time, the improvements could be transformative, and a model for other states to follow. 

Money Starts To Flow

The Vermont CUD trend is a hard one to miss, yet somehow Vermont’s efforts seem to have escaped the attention of the global telecom press. 

The Act 71 Broadband Construction Grant program has spent much of this year doling out grants to CUDs capable of delivering broadband at speeds of at least 100 Megabits per second (Mbps) to underserved portions of the state. Distribution of the funding is being managed by the VCBB, whose $90.25 million in grant awards are documented at the organization's website. 

The first beneficiary of the program was NEK Broadband, a coalition of 45 Vermont communities across Caledonia, Essex, Orleans and Lamoille Counties in the northeast part of the state. NEK was recently awarded a $16 million grant to expand 215 miles of fiber, bringing affordable access to an estimated 1,500 households in 10 communities. 

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The VCBB also recently approved a $9.1 million grant to Waitsfield and Champlain Valley Telecom (WCVT) to expand fiber access in cooperation with Maple Broadband, a CUD composed of 20 member towns in Addison County, Vermont.

It will expand a 2021 public private-partnership between WCVT and Maple to extend gig service to an additional 2,000 subcribers across seven communities. A separate $8.35 million was awarded to WCVT by the VCBB to begin the first phase of a separate plan to bring broadband to 1,200 underserved addresses in towns not currently part of a CUD.

Elsewhere in the state, CVFiber CUD says it’s on track to light up its first customers by early 2023 after receiving a pre-construction grant of $2.8 million from the VCBB in 2021. All told, city leaders estimate that the new 1200-mile fiber network will cost somewhere around $55 million and bring faster, cheaper connectivity to more than 21 towns including Barre City, Barre Town, Berlin, Cabot, and Calais.

Another $9 million has been awarded to Southern Vermont Communications Union District (SoVT CUD), a CUD representing 14 towns in Bennington County. That project hopes to deliver affordable fiber to another 6,412 addresses across southern Vermont, 1,300 of which currently lack access to any broadband whatsoever.

Inspired by other communities, 5 municipalities in Chittenden County, Vermont (Essex, Essex Junction, Shelburne, South Burlington and Williston) have formed a new CUD they hope will be the backbone of efforts to deliver affordable fiber to every CUD resident. 

As the FCC improves its broadband mapping and BEAD funding begins to flow in earnest, the state believes it’s well positioned to take full advantage.

“We are going to get every Vermont address connected to fiber optic internet, but that's because of the ARPA and BEAD funding,” Hallquist said, adding that the inclusivity requirements within BEAD would prove to be a “heavy lift.” “I like the heavy lift that BEAD has required for us, especially building a digital equity plan. I like the comment that BEAD without equity is BAD.”

Inspirations From America’s Rural Electrification Efforts

Hallquist, who retired as CEO of Vermont Electric Cooperative in March of 2018 to run for Governor, makes it abundantly clear that Vermont’s CUD broadband push is hugely influenced by the success of U.S. electrical cooperatives, which required a new level of community collaboration to implement meaningful progress and reform. 

“I come from the rural electric cooperative world,” she said. “Forgive my bias but I think one of human kind’s greatest work is getting electricity to rural America.”

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Halquist said she’s now seeing the same community-wide dedication toward rural electrification repeat itself generations later. 

“We have over 400 volunteers working on boards throughout the state, putting a lot of their own sweat, equity, and brains into doing this,” she said. “I'm talking about on boards, representatives on the CUDs and helping the CUDs be successful. There's a lot of passion here to get this done.”

According to the Vermont Department of Public Service, only 29 percent of state residents can currently obtain broadband at symmetrical speeds of 100 Mbps. Four percent of state residents do not have access to any broadband whatsoever, and 16 percent can only obtain speeds of 4 Mbps downstream, 1 Mbps upstream. Countless others simply can’t afford access.

As ILSR has documented in extensive detail, the primary cause for these ongoing coverage gaps is regional monopolization, which stifles competition and deployment, ensures Americans pay some of the highest prices in the developed world for broadband access, resulting in the U.S. broadband industry having some of the lowest satisfaction ratings in America. 

Like most of the country, Hallquist says Covid highlighted the importance of quality broadband access, motivating frustrated communities country-wide to explore more creative alternatives to local monopoly control. She said once Affordable Connectivity Plan (ACP) benefits are applied, Vermont residents could see symmetrical 100 Mbps service for as low as $13 a month. 

This is an important part of Vermont's economic future because we don't have a future in manufacturing. You know, we don't have a future in these other areas because we're a small state and our road infrastructure is poor. Our future relies on high intellectual margin businesses.

What began as an organic grass roots response by individual municipalities to market failure, has fostered an era of unprecedented collaboration. Hallquist explained that the VCBB has three goals: get everybody connected, ensure those connections are affordable, and maximize the beneficial social impact of these investments. 

According to VTDigger, 213 of Vermont’s 252 cities, towns and gores are now part of a CUD. And they’re all working collaboratively to develop quality, local competitive alternatives driven by anger at market failure, and aided by a heavy dose of state and federal broadband funds. 

With billions in additional Broadband Equity, Access, and Deployment (BEAD) funding waiting in the wings, the VCBB has issued a call for Vermonters to directly challenge the FCC’s new broadband maps, which Vermont officials say still dramatically overstate broadband coverage, and is missing or incorrectly lists the location of over 60,000 broadband-serviceable locations. (See our how-to videos and guide on how to file a challange to the FCC maps here.)

“States have until mid-January to challenge locations incorrectly classified on the new FCC Map,” the VCBB said. “The better the map reflects the true number of unserved and underserved addresses, the more money Vermont will get, meaning more affordable internet service for Vermonters.”

Entrenched monopolies have routinely used this inaccurate data to overstate coverage, downplay telecom industry competitive shortcomings, and mire state grant applicants in costly bureaucracy. CUDs are hopeful that multi-municipality collaboration will help them weather such challenges in a way that going it alone never could. 

“Vermont is 26th in the nation right now in terms of its broadband connectivity. Once we do all this, we'll be number one in the nation.” Hallquist said.

Header image courtesy of Flickr user Ken Lund, Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0)

Inline image of the Quechee Antique Mall courtesy of Mattia Panciroli, Attribution-NonCommercial-NoDerivs 3.0 Unported (CC BY-NC-ND 3.0)