Maple Broadband Sets the Table for FTTH Network

Vermont’s nine Communication Union Districts (CUDs) were formed to build communication infrastructure to deliver reliable and affordable high-speed Internet access across one of the most rural states in the nation.

The East Central CUD, which owns and operates EC Fiber, has led the charge since its founding in 2011. But over the last few years other CUDs have launched their own plans to build fiber-to-the-home (FTTH) networks in their respective districts with each at various stages of planning or building.

Addison County is situated on the western border of the state about 35 miles west of the state capital (Montpelier), tucked between Lake Champlain and the Green Mountains. The region has long been served, or rather underserved, by Comcast, as the area’s primary Internet Service Provider does not cover the most rural parts of the county, leaving many of the county’s approximately 36,200 residents with outdated DSL service.

Poor connectivity at a time when high-speed Internet access is a must for most led to the establishment of the Addison County Communications Union District (ACCUD). Headquartered in the county seat in the town of Middlebury, over the past year, the fledgling CUD has grown to include 20 adjacent towns: Addison, Bridport, Bristol, Cornwall, Ferrisburgh, Leicester, Lincoln, Middlebury, Monkton, New Haven, Orwell Panton, Ripton, Salisbury, Shoreham, Starksboro, Vergennes, Waltham, Weybridge, and Whiting. The CUD has taken on the name Maple Broadband and is now setting the table to provide fiber-fed Internet service for broadband-hungry residents living in some of the hardest parts of the state to reach and serve.

New Public-Private Partnership Announced

Just two weeks ago – with an eye toward bringing fiber connectivity to every address in its territory – Maple Broadband announced a partnership with Vermont-based Waitsfield and Champlain Valley Telecom (WCVT), to build and operate a district-wide fiber network. The incumbent telephone company already serves several towns in Addison County and also offers limited fiber Internet service in a handful of those towns’ centers.

It’s a unique public-private partnership that calls for Maple Broadband to finance, engineer, construct, and own the network in its member towns outside of WCVT’s regulated territory. WCVT will retain ownership of the network assets in approximately half the 20 towns that comprise the ACCUD service area (see map below). And, once built, WCVT will operate the network across the entire footprint. 

The 10-year agreement (with the option of two additional 10-year terms) stipulates that Maple Broadband will determine the location, timing, and scope of network construction; set the rates and terms and conditions for retail services and wholesale users; as well as oversee the operating and capital budgets.

WCVT’s role will be twofold: first, to serve as the network manager, acting on behalf of Maple Broadband, which includes maintaining the network, connecting residential and business subscribers, and providing access to the network for wholesale customers.

Second, WCVT will also operate as the designated Internet Service Provider (ISP) for Maple Broadband, and be responsible for installing, monitoring, and maintaining all equipment inside of subscriber’s premises and handling all of the support functions, including billing.

Hailing the agreement as “a critical foundational move,” Maple Broadband Chairman Steve Huffaker elaborated on the public-private partnership in a press release when the partnership was announced:

A first step in deploying our fiber network was to identify a qualified organization to manage and deliver services over the network. When seeking an agreement with a potential term of 30 years, proper alignment of goals was critical to identifying the right partner. We found a perfect match in Waitsfield and Champlain Valley Telecom (WCVT); a local Vermont telecommunications operator that has extensive experience in building and operating a rural broadband network.

Even before this Network Management Agreement was signed, WCVT has been an invaluable resource in support of Maple Broadband’s efforts. Through our collaboration, we will be able to leverage the deep well of experience and the many operational assets that WCVT already has in place.

Funding a Key Challenge

With a total number of housing units, including second homes, in the region estimated to be approximately 16,800 and a year-round population of about 36,200, the key challenge for Maple Broadband is a financial one. And that, according to a feasibility study published in December 2020, is largely because of two factors: the low population density of the region (the average number of buildings per mile is 17.8 in the Addison County Region); and because “construction and materials costs have gone up appreciably even in the past few months, driven largely by increased demand for skilled broadband construction labor, the pandemic’s reduction of factory capacity, and tariffs on Chinese goods.”

While the feasibility study, which assumes a 22 percent take rate, found that “the Addison region presents no major technical challenges to building a fiber network (and) that building a network in the region could eventually comprise 5,000 customers, achieving a scale that would make it attractive to an operator . . . the combination of increased construction costs and low density means that the average cost to reach a customer is too high to build a financially sustainable network with a high cost of capital. However, the project becomes feasible in a few scenarios.”

The study laid out three paths forward: either securing “low-interest or favorable loans” from the state and federal government; forming an “operational partnership” by merging with a neighboring CUD; or by “partnering with an existing provider in the same region – for example, Waitsfield Champlain Valley Telecom.”

Maple Broadband opted for the latter and is currently engaged in “pre-construction tasks,” which include: network design; a utility pole survey; and make-ready work to make space on utility poles to hang fiber cable.

Although in an emailed response to an ILSR inquiry Huffaker said “the high-level estimate (of what it would cost to build-out the network) is preliminary,” the Addison County Independent reported in April the estimated price tag “could reach close to $30 million.”

Local leaders and advocates have at least two funding pots to draw from in the near term. In June, Gov. Phil Scott signed into law legislation that allocates $150 million for accelerated community broadband deployment. And in August, the state of Vermont received half of its $121 million in federal ARP funds, which on Sept. 2 Gov. Scott announced, would be distributed to municipalities “over the next several days.” It’s not clear to us whether the money will be allocated directly to CUDs or if the CUDs will have to apply for a portion of the available funds.

Huffaker is hoping Maple Broadband can tap into those funds to help pay for at least the initial network construction costs, while leveraging future subscriber revenue to complete the buildout.

“That’s really what’s going to pay for the $20 or $30 million of construction work,” Huffaker told the Addison County Independent.

When we recently connected with Huffaker, he said, “if the stars align, we will be connecting our first subscribers next autumn,” adding that “our current schedule contemplates our network to be complete in 2-3 construction seasons.”

Header image of downtown Middlebury, courtesy of Wikimedia Commons, Attribution-ShareAlike 3.0 Unported (CC BY-SA 3.0)

Inline image of service territory map courtesty of Maple Broadband

Inline image of Vermont State House, courtesy of Wikimedia Commons, Attribution-ShareAlike 4.0 International (CC BY-SA 4.0)