Carole Monroe is back on Community Broadband Bits for Episode 177 this week, to discuss the East Central Vermont Fiber network and its unique financing model. Carole is now the General Manager for EC Fiber. She previously joined us for episode 36 to discuss FastRoads in New Hampshire. And we previously discussed EC Fiber with Leslie Nulty in episode 9. Years later, EC Fiber is approaching 1,200 subscribers in rural Vermont and is growing much more rapidly with some open access dark fiber connections created by the state in a specific effort to enable last mile connectivity. We discuss the impact on the community, how much people in rural regions desire high quality Internet access rather than slow DSL, and also a brief mention of some progress in New Hampshire to expand the Fast Roads network. Read the transcript from this episode here. We want your feedback and suggestions for the show - please e-mail us or leave a comment below. This show is 21 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed. You can can download this Mp3 file directly from here. Listen to other episodes here or view all episodes in our index. Thanks to Arne Huseby for the music, licensed using Creative Commons. The song is "Warm Duck Shuffle."
Burlingtonians love their municipal network. We have reported in the past that, prior to the sale of the network to Blue Water LLC, a group of locals organized to create the KeepBTLocal cooperative. Recently, the organization reaffirmed its commitment to purchase the network when it goes up for sale, a condition of the Blue Water LLC transaction.
A customer satisfaction survey in April revealed that BT customers are more than twice as satisfied with their provider as those obtaining service from competitors. The VTDigger reported survey results:
· 87% customer satisfaction with BT’s Customer Service;
· 24% of customers chose BT’s services after being recommended by a friend or family member; and
· General impression of BT by non-BT customers saw a 10% “positive” increase over their 2014 impression.
The survey also reported that customers with other providers were 40% satisfied with their service.
BT offers 150 Mbps for $55 per month and gigabit service for $85 per month or $70 per month with a 12 month contract. All speeds are symmetrical.
It has been a long road for BT after prior city leadership covered up years' worth of cost overruns creating serious financial difficulties for the community. Eventually, CitiBank filed suit to recover the $33 million Burlington owed. The two settled and Burlington eventually transferred ownership to Blue Water with the city still leasing. The ultimate goal for the city is to sell the network. Enter KeepBTLocal.
According to a June VTDigger article, the coop has been working with a former telecommunications industry executive now working as a consultant. They are developing business and acquisition plans to purchase the network when it goes up for sale within the next few years.
Andy Mortoll, Chair of the Board of KeepBTLocal told VTDigger:
“It’s just so important for so many of us in Burlington to keep Burlington Telecom a local,...
In April, ECFiber connected it 1,000th customer in Thetford Hill. Users at the First Congregational Church, described as the oldest meeting house in the state, have nothing but kudos for ECFiber and their new high-speed symmetrical Internet access. From the press release [PDF]:
“The service has been great so far,” said David Hooke, Chair of the Board of Trustees, “and we really appreciate that ECFiber is a community owned organization committed to bringing state of the art connectivity to rural east central Vermont. This will be a boon for the whole region.”
To celebrate the milestone, ECFiber Chairman Irv Thomae presented a special certificate to the Church.
This is just the latest accomplishment as ECFiber expands across Vermont. The consortium of 24 towns continues to obtain financing one expansion at a time. According to another press release [PDF], the community owned network just added an expansion to encompass the towns of Chelsea and Tunbridge. This will allow 80 more rural household to subscribe; more will soon be on the way:
“This is the first of several expansions we’ll be opening this summer,” said Irv Thomae, Chairman of ECFiber and Governing Board delegate from Norwich. “We’re pleased that more residents in this area are now able to enjoy the benefits of locally grown, full time, state-of-the-art real broadband.”
Read our previous coverage of EC Fiber here.
UPDATE: Today, ECFiber announced that it is now offering free bandwidth upgrades to local schools, public institutions, and libraries. The announcement, another example of a publicly owned network going the extra mile to improve the quality of life in the community, is published in VermontBiz. From the announcement:
“Thanks to our high speed infrastructure and state-funded dark fiber and grants that have helped interconnect many of our hubs, ECFiber has excess bandwidth (particularly during daytime hours) and we are pleased to be able to offer it...
ECFiber hopes to transform its business model in order to attract investors, reported Valley News in February. The organization is now an "inter-local contract," an entity somewhat unique to Vermont, but seeks to change to a "telecommunications union district." Similar to a municipal utility district, the telecommunications union district is created by two or more municipalities. The new business model would not change ECFiber's governance or require financial support from local towns but officials believe it would attract more outside investors.
Last year, ECFiber announced it would expand in 2015, seeking large scale funding to help speed up deployment. Since 2008, the organization has raised over $6 million for deployment from individual investors and now serves more than 1,000 subscribers. Unfortunately, this method financing slows expansion. The results are bad for ECFiber and bad for local consumers:
“The worst thing (about ECFiber’s delay) is a lot of the people who wanted to have it weren’t able to get it right away,” said [ECFiber Treasurer John] Roy.
At this point, FairPoint, Northern New England’s provider of land-line service, is able to reach more rural areas than ECFiber with its high-speed Internet service. But, FairPoint’s speeds of up to 30 megabits per second are slower than the 400 megabits per second ECFiber’s cables can provide, said Roy.
“If we’re going to get this job done before the end of this decade, we need to step up the rate,” said [Irv] Thomae [ECFiber's Governing Board Chariman].
It would take another 17 - 18 years to deploy 1,600 miles of fiber, the ECFiber goal. If the organization can raised $40 million from larger investors, that period can be reduced to 3 - 5 years, estimated Roy.
In order to achieve the business model change, ECFiber seeks approval from the State Legislature, which will create a union district via H 353 [PDF]. Local communities served by ECFiber must also approve the measure by ballot at their Town Meetings. Thetford approved the measure in February and ECFiber officials expected other communities to follow...Read more
Recently, we reported that ECFiber in Vermont plans to expand in the near future. To fund that expansion, the consortium will seek out new, larger scale funding to meet the increased demand. ValleyNet, Inc., the company that manages the FTTH network for ECFiber is now searching for a Managing Director. The full posting is listed below and can be viewed at the NTCA Rural Broadband Association Job Center.
In keeping with the community goals of the network, we found value in this particular specification:
Community Foundation: In view of the above, the MD must fully appreciate and embrace the concept of a community-owned public utility and be able to relate successfully to: the individual towns; their governing bodies (“Select Boards”); the ECFiber Governing Board and its members; and with the citizens themselves. Although ECFiber is required by law and constitution to be entirely self-supporting and to “pay its own way”, it is not a purely “profit-maximizing” institution. Balancing the needs of the community with the commercial discipline required to fund all its activities without resorting to taxpayer funding sources is a basic requirement of the MD’s position.
In early December, the East Central Vermont Community Fiber Network (ECFiber) announced that it is once again expanding, bringing the network to 200 miles by the end of 2014. According to the press release, the network will reach into an additional 8 towns in 2015, in part due to dark fiber deployed in cooperation with the Vermont Telecommunications Authority.
From the press release:
“We’re pleased that residents of these areas are now able to enjoy the benefits of locally grown, full time, state-of-the-art real broadband,” said Irv Thomae, Chairman of ECFiber and Governing Board delegate from Norwich.
Over 400 households have invested in the network thus far, but Thomae goes on to note that the consortium will pursue larger scale funding in 2015 in order to obtain the necessary funds to expand at a quicker pace. Currently, local investors fund the network by purchasing tax-exempt promissory notes.
Subscribership has continued to climb. Last spring, we reported on the 600th sign-up but now ECFiber is at nearly 1,000 customers. There are currently 24 member towns in the consortium.
In November, Burlington's City Council approved the much anticipated settlement with Citibank. Burlington Telecom, a nearly citywide gigabit FTTH network owned by the city, was run into the ground by a previous mayor. That Mayor's Administration hid major cost overruns from the public for years, resulting in a challenging situation for the community. In the the world of municipal broadband, this is a significant anomaly.
The City found itself owing CitiBank some $33 million with no clear path on how to pay it. After years of arguing in court, the situation is largely resolved. Early in 2014, Citibank and Burlington reached a settlement [PDF] in which the the city would pay $10.5 million and a share of BT's future value in exchange for Citibank to drop its $33 million lawsuit. The obligation will include funds contributed by the city's codefendant, McNeil, Leddy & Sheahan P.C. law firm.
BT revenues, net cash flow, and the city's insurance carrier will contribute to the city's obligation, but the lion's share will be paid for with bridge financing from a local source. Trey Pecor, a Burlington business owner, has secured funding and created Blue Water LLC. The city will transfer ownership of the network to Blue Water in exchange for $6 million and will continue to lease the network from Blue Water at about $558,500 per year for a maximum period of five years. The goal is to find a partner to purchase the network. At that time, Blue Water and the city will divide any proceeds from the sale.
As part of the agreement, the City Council and the Vermont Public Service Board (PSB) needed to approve the terms. The PSB is the state entity tasked with regulating utility rates and related financial matters in Vermont. On November 3rd, the PSB approved the transaction unanimously [PDF of the Order].Read more
Burlington Telecom customers love their local muni. Throughout the community's political, legal, and financial challenges, residents and businesses have rallied behind the ability to control their access locally. As part of their efforts to educate the community, Code for BTV and Keep BT Local brought Chris to town to discuss community ownership. The video of his presentation is now available online at Burlington's Town Meeting Television.
Chris discussed a variety of community ownership and said of Burlington:
"When it comes down to getting community support to raising capital and understanding the value of a cooperative, Burlington's about the best place in the country to be trying to do that."
Keep BT Local began officially organizing in late 2012. Their goal is to transform the municipal network into a cooperative structure on order to protect local interest in the service. The gigabit network has won awards, partnered with local nonprofits to improve digital inclusion, and offered local services such as computer repair, setting it apart from the distant corporate providers with no interest in local communities.
No wonder Burlingtonians want to keep their network! This is an informative conversation that touches on a variety of topics including how to fire up potential cooperative members, strategies to entice community anchors, and promoting the unique characteristics of a local network.
The video runs about one hour and twenty minutes.
Last week, we criticized the draft version of the Vermont Telecommunications Plan for its conflicting goals, misplaced priorities, and all-around lack of vision. Fortunately for Vermonters, there are good things happening in the state as well: the Vermont Telecommunications Authority (VTA) and EC Fiber are partnering on a new 51 mile run of dark fiber that will bring new connection options to over 1,000 businesses and residences.
VTA will be building the central fiber lien, which runs North-South along the I-91/I-89 corridor, and will be open to any carrier. EC Fiber, a nonprofit, community-owned open access network, will be an anchor tenant on the new fiber optic line, and will contribute $200,000 to project costs and be responsible for making last mile connections to the premises of homes and businesses that purchase them.
The new fiber line will connect designated “Broadband Business Improvement Districts” in the towns of Braintree, Pomfret, Brookfield, North Randolph, and Sharon, making speeds of up to 400 mbps symmetrical available along the way. The project is expected to be completed in the first half of 2015, along with dark fiber projects in Reading, Stockbridge, Rochester and Hancock.
These projects show that at least some in Vermont are aware of the need for fiber, and why the focus on new investments in last generation technologies embodied in the draft Vermont Telecommunications Plan are so misguided.
Last week, the Vermont Department of Public Service began a series of public hearings on the public comment draft of its State Telecommunications Plan. The plan is intended to asses the current state of the telecom landscape in Vermont, map out goals and benchmarks for the next 10 years, and provide recommendations for how to achieve them. The plan sets a target of 100 megabit per second symmetrical connections for every home and business in the state by 2024.
Oddly enough, achieving that even today would put them behind many metropolitan areas across the United States. The technology needed to deliver 100 Mbps connections is essentially the same that would be used to deliver 1 Gbps, begging the question why such a limited goal?
The 100/100 mbps symmetrical target is for 10 years into the future, but in the nearer term the plan calls for universal 4/1 Mbps coverage, raised to 10/1 Mbps coverage by 2020. While it may at first glance seem reasonable to set gradually rising targets, these long and short term goals actually have the potential to conflict with each other.
As pointed out by Vermont Public Radio, the 100/100 Mbps standard would likely require universal FTTH, or at least fiber to the node combined with other technological advances and investments. Meeting this goal would require a huge investment in next generation fiber optic infrastructure, yet the Telecommunications Plan calls for funding priorities to be focused on achieving universal 4/1 mbps coverage for the next 6 years. This lower standard will likely be met with a combination of last generation technologies like copper wire DSL and wireless that are incapable of meeting the 100/100 standard.
Continuing to build out older systems while deferring investments in fiber, which is adaptable to meet just about any future need, seems illogical. It’s a bit like saying you’re going to put all your expendable income for the next six years into repairing your VCR and buying tapes, while promising you’ll buy a DVD player immediately after.
While the goal of first guaranteeing all Vermonters some basic level of coverage is admirable, Vermont can do better by setting higher goals for...Read more