Vermonters Angry at Wireless Broadband Stimulus Grant Instead of Fiber Loan

Vermonters are asking some hard questions about the federal broadband stimulus decision to throw money at a wireless network for Vermont rather than loaning money to an organization dedicated to delivering real broadband.

Senator Bernie Sanders convened a meeting to discuss the awards toward the end of October.

Senator Bernie Sanders led off his “broadband town meeting” Saturday morning at Vermont Technical College with a ringing affirmation of the need for better broadband coverage in Vermont and the nation.

However, nobody in the crowd of nearly 300 people needed to be convinced of that. What they wanted to know was whether a huge new federal grant to a private company was the right way to do it.

VTel, a small private telephone company, received a $116 million grant to build a FTTH network to serve their existing 18,000 footprint as well as a wireless network that is intended to serve the entire state.

In contrast, the East Central Vermont Fiber Network (which we have covered previously), applied for a loan to build a FTTH network to everyone in the 24 communities that have joined together to form the network. The ECFiber network would be run by a nonprofit and would repay the loan from revenue generated by selling triple-play services on the network.

Vermonters have a strong fiscal conservatism streak, which has shown up strongly in the discussions around this situation, something noted in a story leading up to the Sanders meeting:

He will get plenty of both from representatives of ECFiber, the consortium of 23 towns that has been planning a network of fiber-optic broadband to virtually every home in the White River Valley and beyond.

The organization was stung recently when its own request for a loan was not funded by RUS, which instead awarded a much larger outright grant to VTel, which is located in Springfield.

Our position at MuniNetworks, is quite similar to that of the these Vermonters: loans would be better policy than grants for broadband infrastructure.

Supporters of the wireless network, including VTel's CEO, Michel Guite, have suggested the $116 million grant will put Vermont at the head of the broadband pack (from story quoted above):

“The funding is in (this grant) to allow Vermont to make broadband available to everyone,” he said. “We would be the first state in the union” to do that.

“We’re not going to be behind any more; we’re going to be leading,” he proclaimed.

Unfortunately, this appears to be yet another case of wireless hype vastly exceeding the likely outcomes. A skeptical editorial from the Vermont Standard echoes the concerns of many more Vermonters with a rather understated fact:

Vermont

Vermont’s mountains and valleys are a significant barrier to universal wireless service.

Senator Sanders appeared to push VTel's CEO on the question, but reporter Dickie Drysdale caught the important qualifications in the exchange:

His first question was, “Will you bring broadband to every citizen in Vermont?” From Guité, the answer to this one was “Yes, but …”

Sanders quickly rephrased the question: “I want you to say, will you provide universal broadband service to every single unserved community in Vermont?”

Responding to this quite different question, Guité happily said “Yes, I will.”

Dickie goes on to quote David O'Brien, the Commissioner of Vermont's Public Service Department:

“This is a positive story for Vermont,” he said. This grant will help us.” Bringing fiber optic service to every point in Vermont “is not a possibility,” he said.

For those unfamiliar, O'Brien's record on broadband is hardly impressive. He allowed the disastrous Verizon-Fairpoint fiasco that has resulted in a marked decline in telephone reliability while customers were regularly overcharged.

We should be thankful O'Brien was not in a position of authority one hundred years ago, to assure everyone that universal electrical grids were "not a possibility." The reality is that FTTH to everyone in Vermont is not only a possibility, it is a certainty barring the end of human civilization. The idea that Vermonters will use copper in 50 years to communicate is absurd.

The question is when Vermonters will have access to fiber-optic networks -- and policy decisions to shower private companies with grants to build wireless networks rather than using loans to allow communities to build FTTH networks (that will be directly accountable them) will only delay the inevitable. An almost universal wireless network is a step forward for a state so far behind in communications infrastructure; but it will not be the envy of the nation and its pathetic reliable and speeds will not drive economic development.

Overblown claims about the capabilities of wireless led to a press release and white paper from ECFiber, which admitted "Wireless is 'Better than Dial-up,'" while admonishing "Fiber is 'Future Proof.'"

Wireless fixed broadband is simply not good enough. It has been tried in Vermont and it doesn’t work very well (just ask any user) – the gap between wireless and fiber will only widen in the future.

The white paper is real reality check for those who believe wireless will solve America's broadband problems:

Vermont’s mountainous topography presents real challenges to wireless broadband (both fixed and mobile.) Many cell sites will be required to achieve reasonable theoretical coverage rates using standard propagation models. (N.B., DO most Vermonters want hundreds of new ridgeline cell sites 30 feet above treeline? And how will all these cells in remote locales be connected with fiber to the Internet?) This theoretical coverage will be significantly reduced by local factors, especially foliage.

There are many ECFiber pre-registrants that live in areas nominally “covered” by fixed wireless Internet service providers (“WISPs”) but are unable to access their services because of local topography or foliage constraints. Those that have access to fixed wireless acknowledge that it is “better than dial-up” but are not happy with the service’s reliability or speed. Advertised speeds are often not achieved (particularly for users on the edge of a cell site or without line-of-sight) and speeds drop significantly during busy hours.

Many have noted that they both need and desire to stream video over their broadband connection -- especially at the Vermont Law School. But the wireless broadband from VTel will almost certainly fail to do that reliably.

VTel's CEO told Vermont Public Radio that he would have loved to run fiber-optics through all of Vermont:

"But all of Vermont would cost a billion dollars and nobody was offering that."

No one should offer that!! We aren't talking about charity here. This is infrastructure! This is exactly how the private-sector mindset that fails to understand the nature of infrastructure. Broadband networks are not the product, they enable all other products. They are essential for commerce, as well as education, and soon for health care. Infrastructure should be paid for the public that benefits from it, as the roads are. And when the costs are too large for the community, the federal government can help with long term loans, and perhaps grants where essential.

ECFiber understands this. And while ECFiber would not have connected all of Vermont with a single broadband stimulus award, it would have solved the communications infrastructure problem for these 24 towns for at least one, and probably several more, generations. It would have expanded to cover more Vermonters, as we have seen community fiber networks do elsewhere recently (often with stimulus awards).

The supreme irony of the massive federal grant to VTel is that it may result in Vermonters having to wait longer to get universal access to real broadband. Any entity, public or private, will find it more difficult to pay for the costs of building a network in Vermont because the wireless network will provide good enough service for those with good line-of-sight to the towers. Having lost those customers, a proper network will have fewer potential takers, making it more difficult to justify the costs.

This was our concern when we first learned of the broadband stimulus program. Giving out grants to private companies who will provide "better than dial-up" service is an extremely poor use of our tax dollars. It solves no long term problem; it really makes the longer term problems more difficult to solve.

But what does VTel care? No one was going to pay them to build fiber to everyone anyway, right?

Fortunately, ECFiber is moving forward with a pilot project expected to break ground in the spring.

Photo courtesy of chensiyuan, used under Creative Commons license