Transcript: Community Broadband Bits Episode 177

This is Episode 177 of the Community Broadband Bits Podcast. Carole Monroe of the East Central Vermont Community Fiber Network (EC Fiber) joins the show to talk about how the network got started and the benefits of fiber-to-the-premise networks in rural areas. Listen to this episode here.

 

Carole M.: But this is a network built on community. Everyone investing either for the sake of the project or investing for the construction along their road. It brings people together.

Lisa G.: Hello, and welcome to episode 177 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. In this episode, Chris talks with Carole Monroe, general manager of the East Central Vermont Community Fiber Network, a community-owned network in Vermont. EC Fiber's financing model is different than many of the networks we cover because it relied on individual investment to get the project off the ground. 

Carole describes how EC Fiber has experienced steady growth over the past several years and how, in an area of the state where residents and businesses typically rely on DSL and satellite, fiber to the premise has spurred a number of benefits. EC Fiber also has a new designation as a utility district. Carole addresses how this will affect EC Fiber's operation. Now, here's Chris's interview with Carole Monroe, general manager of EC Fiber.

Chris M.: Welcome to another addition of the Community Broadband Bits Podcast. I'm Chris Mitchell. Today, I'm speaking with Carole Monroe, the general manager of EC Fiber in Vermont. Welcome to the show.

Carole M.: Thank you. It's great to be on.

Chris M.: It's great to talk to you again. We spoke with you about two years ago, maybe two and a half. I was looking back in my notes. It was episode 36, and you were with Fast Roads in New Hampshire. Welcome to Vermont. Welcome back. 

Carole M.: It's great to be here. It's great to be here in Vermont.

Chris M.: We're going to be talking about this thing EC Fiber. People who have been long-time listeners may have heard it all the way back in episode 9, when I talked with Leslie Nolte. That was three years ago or more. I'm hoping that you can just remind us what EC Fiber is. 

Carole M.: Well, EC Fiber is the East Central Vermont Community Fiber Optic Network. It's a community-owned network. It's subscriber-financed. Its mission is to bring fiber to the premise to 24 towns in the central area of Vermont.

Chris M.: We're going to talk about the financing model later on in the show, but for now, for how long has it been going on, and how great is its reach?

Carole M.: Well, it started in 2008 as a concept, and through different challenges, including the downturn in the economy among others, it really did off the ground until 2011. Since 2011, it's been moving forward every year. It's been a great asset to this area.

Chris M.: You've really been building up steam. I was looking back at our coverage. Some of the headlines that we had posted up was "EC Fiber Passes 600th Customer, Connects 600th Customer," and then "Connects the 1000th Customer." You were telling me just a minute ago that you're well on your way to 1200 now. Congratulations! 

Carole M.: It's great. We certainly want it to be even more than that. There's a number of customers unserved, and that's really hard for them.

Chris M.: It seems like your growth is definitely picking up, which we would expect from this model. It’s kind of a model that’s hard to get started, but then should, like a snowball heading down a hill, should be picking up some pretty good mass as it rolls. Let me ask you, first of all, what’s the situation there in East Central Vermont? What kind of services do you offer, and what do people have as options if you weren’t there?

Carole M.: Well, what we offer is certainly fiber to the premise. It’s a GPON technology, and it’s symmetrical service. We do have a very basic package at 7 Mb, but most take the standard package, which is 20, and then of course, we go all the way up to 400 Mb symmetrical. We could offer a gig; we just haven’t had any calls for it. 

Chris M.: For people who are waiting to get connected, what are the kind of options that they’ll typically have in some of the towns that are on your list, but you just haven’t gotten to yet?

Carole M.: It’s very difficult, and so they do have the option of DSL. Most are far from the central office of a DSL or a DSLAM, and so often their speed is poor at best. There aren’t many that get the 15 Mb speed that you can get from DSL. There’s some of that. There are certainly individual homes that still have satellite as their only option. If you’re close to a cell tower, which there are far and few between, but if you were, you could use your cell phone as an access point. 

That’s true for even ... Vermont actually put up some cellular types of wireless as part of their projects, and if you're close to those too, you might be able to get some service. To be honest, with the mountains in Vermont, that wireless is very difficult for cellular as well as for any other kind of access. 

Chris M.: Well, and you, of course, have to deal with the bandwidth caps even if you do have that access in a lot of cases, so it’s one of those things you certainly wouldn’t want to rely on that for your kids having to do homework for every day of the week.

Carole M.: That’s true. For every one hour of high definition download, you're using up a gig of your data.

Chris M.: That's a good reminder of how important it is to have these robust wired connections. It seems like the state of Vermont has been helping you out. I know years back I was concerned that Vermont seemed to be doing a little bit more to help incumbents, but in late they've really been investing in ways that you've been able to take advantage of. Can you tell me about that? 

Carole M.: A couple years ago they started by building a dark fiber route about 30 miles through some of our towns, three or four of our towns. It’s unusual because it's not just middle mile fiber, they actually have put fiber access points for every premise along that route for those customers to connect to easy fiber. They’re rolling out another 80 miles of route that will be lit my guess is early next year. Fiber’s on the poles already, so there's just work to do to light it up. It's about another thousand customers that will have access and there will be access points for those along the way. That's been great. They also have these conductivity initiatives which sort of target these places, homes, or census blocks that are hard to reach, underserved, and then they’re incenting the carriers to serve those. You see fiber has some of those blocks that we’ll be rolling out at the beginning of next year as well. It’s funny, you see fiber here on the poles, through the fields, up to a person's home a mile up a dirt road and another half a mile dirt driveway. It's a great opportunity for Vermont.

Chris M.: Let’s talk about that because I think people know that Vermont is rural, but they may not have a sense of how that changes how one might build a network. When you say the state is not just doing the middle mile, but they're actually adding the last mile drops, can you tell me what that means and why it's important?

Carole M.: It’s important because often the cost to get to a premise, to a homeowner, is a very high cost when you're looking at long driveways and very rural, sparsely populated areas. When they put a fiber access point on the pole, ready for that customer, that cuts down on the cost to get to that customer. I think that's been working for us. It doesn't even count the spur roads. There are a number of these that are dead-end roads off of these routes that then make it easier for us to build out to those locations as well.

Chris M.: If the state wasn't doing that kind of the last mile facilitation for you ... Am I thinking of this correctly in that if they just put a bunch of dark fiber and they just sort of wouldn't allow you to have access to it every 5 miles or something like that, where you could splice into it, then you’d have to basically run a lot of the fiber back along the path that had already been built to then run it up a driveway. Am I conceptualizing that right?

Carole M.: That's exactly right. We have to put in probably more hub type locations along the route. This really helps us to deliver to the homeowner much faster without running a lot more fiber, and backtracking, or going forward and over-lashing.

Chris M.: This fiber, is it available to just any entity that would like to use it as well?

Carole M.: Yes, it is. It's open access, so some of the other carriers are using it to get to point A to point B, what you would normally do on a middle mile network. There are not too many who are interested in dropping fiber to the premise off of these routes, but EC Fiber is the primary carrier for that purpose.

Chris M.: I guess one of the things that we should have covered, and I think one of the key issues is that you have a real community focus. We’re going to be talking about how that’s structured exactly, but you’re a community network combination of multiple towns working together. Let's talk about the impact. What has the impact been of the network? How has it helped the community out?

Carole M.: It’s a rural area, but what we’re really talking about is people who have home businesses, and whether they’re agricultural in nature or some other type of business, so it has encouraged them to participate in a much broader market than they would normally have been able to, and to get supplies in a much more efficient way. Those farms are happy to have these connections to those small businesses that work from a home environment. In addition to that, we provide 400 Mb symmetrical service to our schools. Those schools are moving forward at trying to ... how to incorporate that into their lessons at the schools. Because we’re getting more and more into the community, they can actually send some work home for those students that are fully connected. That changes the educational model as well to some extent. This is about small businesses, and so we’re their small business carrier of choice because it we have products that they appreciate and they can use at a price point they can pay. 

Chris M.: One of the things that I think has not changed very much since the last time you were on our show is I think a lot of people that that aren't from rural areas will often think, well, these are people that don't really understand how to use computers, and they need the trainings and things like that. I'm curious what's your experience been with adoption where you do have the service available? 

Carole M.: It’s a mix. There are certainly some individuals who are concerned about or don't know what they would do with it, but for the most part this is a very educated community in these rural areas. They are familiar with what's needed for their communities to grow and to be able to sustain their standard of living. We meet sometimes with these communities in these small grange halls, those halls are full of people who certainly know that they need to have some sort of broad access to the outside world.

Chris M.: I remember the enthusiasm with which some of the town meeting votes were conducted. There was not a lot of opposition when people were talking about this approach. 

Carole M.: There isn’t, and this is also an area of a lot of second homes. Those individuals that come up for the winter to ski or for the summer, they can stay longer and stay throughout the season because now they can work from those second homes.

Chris M.: One of the things that I think demonstrated the tremendous support for your network is the fact that people have actually invested in it. You wouldn't be the general manager of EC Fiber without the support of so many people within the community. Can you tell us how the network was funded when it was getting started. We've already touched on the state grants, but how's the rest of the money been raised?

Carole M.: The state grants are fairly recent, and so the money has been raised by individual investors in EC Fiber. Anywhere from $2,500 to $800,000. Individuals have invested in this network. There are over 450 investors, many at the lower level. This is truly an investment. They have a return on their investment at about 5% or 6%, depending on when they bought in. EC Fiber has raised over $7 million in that way. That’s what built the network. It wasn’t until the network was viable, moving forward, and active that the state grants came along. 

That’s great, and certainly we appreciate it, and it helps to move it forward faster, but this is a network built on community. Everyone investing either for the sake of the project in general or investing for the construction along their road. It brings people together. There are 24 towns in this inter-local contract is what it’s set up as currently. They all want it to be across all towns. By the beginning of next year, we’ll be in at least 20 of the 24 towns and have some presence. We’d like to be able to determine how to build it out faster. I think we’re moving in that direction.

Chris M.: When you say that the money was raised by the outside ... I guess I think of it as both outside and inside investors to some extent given some of the people. You’ve actually had, I think, people that  lived close to each other organizing together to raise the money to make sure that you’d be able to get down their street, right?

Carole M.: That's correct. They'll pull together. We'll price out a project for them, and they will get their neighbors together and try to find the investment dollars to make that happen. It costs about $30,000 a mile to build, including the drop. That's been consistent for the last several years, and so it's not unusual for an area or a street to be able to find within their own residences of businesses the ability to do that.

Chris M.: You noted that that it's long been an inter-local contractor, which means I think all the towns are basically working together as a single entity that preserves the same legal rights as being a town, but that's about to change in another six or seven weeks. What's going on?

Carole M.: Well, the state of Vermont voted last year to allow for they call them communication utility districts or municipal utility districts, and so the organization of this will be reformed into a utility district. In all those cases, the towns do not, by the way, provide any financing for this network. That is not their responsibility to do that. They are prohibited from doing that. They will reap the benefits once the network is 100% built out. Then any excess revenues will go back to the towns. They do facilitate our path, so to speak, where they can, working with property owners for easements and so on and so forth, where we have to put in poles or conduit. I think that helps, but they’re very engaged in EC Fiber. There are two delegates. One voting, one alternate, from every town. They meet monthly. It’s a group that’s very cohesive. It helps to set the direction of the network.

Chris M.: Can you tell me the main difference in terms of what a telecommunications district will allow EC Fiber to do that it would not be able to do under the inter-local contract?

Carole M.: There really isn’t very much difference, but I can say that in the municipal investment markets, they’re much more familiar with the municipal utility district, whether it’s a water district, or a sewer district, or something along those lines. A municipal utility district is a common language for them. Inter-local contracts, not so much. 

Chris M.: Okay.

Carole M.: It just really sort of puts a structure around this organization that’s much more familiar to the outside world. 

Chris M.: That makes sense. I think a lot of times investors are may be suspicious if they just run across terms they’re not comfortable with, so you want to use their language.

Carole M.: Right, that’s true. That’s where we want to go.

Chris M.: You came over six months ago from Fast Roads. Can you just give us a little update on what’s been happening with the Fast Roads Network?

Carole M.: New Hampshire fast roads is still up and running, and they’re connecting customers every day. It’s been a slow process for them. Monadnock Economic Development Corporation is running New Hampshire Fast Roads and has a group of contractors who are assisting with that effort in terms of doing the drops and so on and so forth, and doing the builds where we're connecting to new customers there. There are some towns along the route who are looking for ways in which they can bring fiber throughout their town and in New Hampshire that’s a little difficult without municipal bonding. There’s a new model in New Hampshire called Special Assessment Districts that may allow them to move that forward in some way. There are some towns up by the Hanover region who are looking to do that. They will connect into the New Hampshire Fast Roads district.

Chris M.: Terrific. 

Carole M.: It's going to stimulate some growth.

Chris M.: That’s good. Sometimes it’s so important just to get it started. It might take a few years, and you might be sitting there thinking we’re not getting everything done, but once you have something like Fast Roads or EC Fiber moving forward even modestly, then you have the ability to take advantage of these things like when the state of Vermont makes some dark fiber available or when there might be this opportunity to fund things a little differently in New Hampshire. Without having Fast Roads there already, I don't think they would necessarily have the same opportunities to use that special assessment district to move forward.

Carole M.: Well, I think that there’s a model that’s been proven, and so they take advantage of that. There’s also a great deal of middle mile fiber that’s accessible that didn’t use to be. It’s not so unusual, as you know now, to talk about fiber to the premise. 

Chris M.: Right, absolutely. It’s one of those things that I think about a lot because sometimes people think, well, we can't do something really grand. We’re not going to do anything at all. These incremental efforts over time ... and time passes much more quickly than you realize ... They really give you opportunities you would not have if you don’t just get something started.

Carole M.: That’s true. You and I have been following this for quite some time now. I follow you your programs and your podcast, and it's incredible the energy and the growth to fiber to the premise projects across this country. I don't know that we can say it was the stimulus packages. I'm not sure it was Google Fiber, but it's all of that coming together to make it feasible and to seem feasible, so people understand and can get a grasp as to what that can do.

Chris M.: Yes, I absolutely agree. Thank you so much for coming on the show and updating us on the EC Fiber network, and I think reminding people that there are some different models for community broadband. It doesn't have to come out of municipal borrowing.

Carole M.: It’s true. It’s not happening here right now. It’s all individual investment.

Chris M.: Great, well thank you so much. 

Carole M.: Thank you. Take care.

Lisa G.: That was Carole Monroe, general manager of EC Fiber Network in Vermont visiting with Chris. We've covered the network since 2009, so take a look at our stories at MuniNetworks.org. Follow us on Twitter. Our handle is @CommunityNets. Send us your ideas for the show. E-mail us at Podcast@MuniNetworks.org. We want to thank Arne Huseby for the song Warm Duck Shuffle, licensed through Creative Commons. Thank you for listening. This was episode 177 of the Community Broadband Bits Podcast.

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