Tag: "Vermont"

Posted July 26, 2010 by christopher

The East Central Vermont Fiber Network is launching a pilot project to start connecting rural customers with a FTTH network. EC Fiber has long labored to find funding -- it was one of many projects to see funding avenues disappear with the economic collapse following the fall of Lehman Brothers. The Feds also failed to fund them (instead opting to fund middle mile after middle mile of projects that were less offensive to powerful incumbent companies.

But they have returned to the private markets and feel sufficiently confident about financing options to build this pilot project.

The pilot project will provide a solid foundation for the capital lease used to build out the rest of the network, providing 100% coverage in 23 towns in East Central Vermont. While the intent of the project is to prove that the larger project is viable, according to Nulty, “it will be able to stand on its own if we don’t raise another dime of capital.”

The project is expected to cost some $80 million in total to cover the 23 participating towns. ECFiber has already obtained the necessary permissions from the State to offer video and telecommunications services. The Pilot Project targets the town of Bethel, where the central hub for the entire network is located.

ECFiber is one of many groups that are using a nonprofit ownership model to build the network. The towns work together to create a nonprofit that will finance, own, and operate the network to ensure community needs are put before profits -- now and in the future.

Update: The pilot project will only offer broadband and phone services due to the high fixed cost of trying to offer video services for such a small population.

Posted February 19, 2010 by christopher

Tim Nulty describes the "most rural" FTTH project in America - a large multi-community build in Vermont, the state with the largest percentage of people living outside metropolitan statistical areas. This is more of a technical article, explaining why the network is necessary, who they have contracted with, and the topology of the network.

Beginning in early 2008, ECFiber developed a project to bring fiber to every single premises in its area: “universal service -- no exceptions, no excuses” without any assistance from the State. This project was completely self-sustaining from the revenues of subscribers alone. A public offering of $90 million of Certificates of Participation, fully compliant with SEC requirements, was prepared by Oppenheimer Company and was on the verge of closing when Lehman Brothers collapsed and with it the entire municipal debt market.

ECFiber had to start again from scratch. Fortunately, the Stimulus Bill passed about this time and ECFiber redirected its financing efforts to that source. It was not a difficult matter to recast its Public Offering documents into an application for a BIP loan. No grants are needed by the ECFiber project and none are asked for. Vermonters generally don’t approve of free taxpayer handouts except in extreme circumstances. ECFiber is completely viable and requesting grants would be, in our view, unnecessary and, hence, improper.

We continue hoping the RUS will stop wasting time with lesser projects and direct a loan to these folks in Vermont.

Posted December 11, 2009 by christopher

As someone who has long researched and followed developments in Burlington Telecom (BT), the city-owned triple-play full fiber-to-the-home network in Vermont, recent developments between BT and the Mayor's office have been deeply disappointing. For those who haven't heard, BT is in the middle of a major controversy -- and it is hard to tell just what is going on (for background prior to current problems, read my Burlington Telecom Case Study and Fact Sheet).

I have wanted to comment on the situation for many weeks but have been waiting as each day seems offer another piece of the BT puzzle. I'll be offering more commentary about it in the future. However, I do not want to the let the current problems lend any credence to the idea that BT has failed. BT is caught in the middle of a political controversy around the Mayor but should continue providing the best telecom services available in the community.

BT has two main problems currently:

  1. It has not passed the entire city within the timeline to which it agreed in receiving its Certificate of Public Good (CPG)
  2. BT has, apparently, borrowed $17 million from the city's pool (used generally for short-term financing of projects) in contravention of its CPG which states that any money borrowed from the City must be paid back within 60 days.

    This CPG condition makes running a network more difficult for BT than it would for a company like Comcast - who can readily self-finance short-term borrowing. Across the U.S., communities have to deal with laws and regulations that benefit private companies over public networks.

    When the economy fell apart, BT was unable to refinance its debt to continue its expansion and chose to borrow from the City to continue connecting new customers. This was the right decision - the CPG did not anticipate such conditions and the terms for outside financing in late 2008 were wretched.

I say "apparently" borrowed above because it is far from clear if all of those funds actually went to BT. As Steve Ross explains here, it is not even clear if BT really required all that it borrowed from the City. Until the Mayor can produce a thorough explanation, I think it prudent to...

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Posted November 19, 2009 by christopher
  • Communities around Rutland in Vermont are moving forward with a planned universal full fiber-to-the-home network. Interestingly, this network has been spear-headed by the Rutland Redevelopment Authority, not a local City Hall.

  • Back in Tennessee, the Clarksville Fiber Network is running ahead of schedule.

    logo-cdelightband.png

    Having reached the 6,000-customer mark, CDE Lightband's broadband service is slightly ahead of schedule in adding new subscribers, an official of the Clarksville utility said Wednesday — good news for a telecommunications division, which is still in its infancy.

    Initial projections had the utility servicing around 8,000 broadband subscribers by next June.

    ...

    New installations usually have about a six-week wait, primarily because of high demand, Batts said.

    Though demand is high, the goal of profitability is still a ways off — around 4,000 additional customers are needed to push the utility's telecommunications into the black, according to early department projections.

  • Seattle's new mayor campaigned on building a publicly owned, full fiber-to-the-home network. Reclaim the Media asks if Seattle will get its broadband 'public option.'

    As Reclaim the Media noted last summer, the main obstacles to moving forward with next-generation fiber to underserved areas in Seattle are (1) money and (2) political will. The city budget remains in slash-and-burn territory this year; next year's budget would be the earliest that the new Mayor would be able to effectively push a significant new priority. This winter, however, Schrier's office will be able to apply for federal broadband stimulus funds to build out the skeleton of a citywide fiber network (possibly in collaboration with Seattle City Light), and to provide actual door-to-door "fiber to the premises" (FTTP) service to underserved neighborhoods in the Central District and Beacon Hill. McGinn's leadership will be key in making this project happen.

    Following...

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Posted October 12, 2009 by christopher

Vermont's proposed East Central Fiber Network is moving forward, confident that the strength of their application for federal broadband stimulus funding will get them an award. Atlantic Engineering has been surveying pole and prepping so they can get started as soon as possible.

They are also offering network-branded apparel - it reads: ECFiber.Net Community owned Fiber-Optic network. I think this is pretty fricking cool - it shows the enthusiasm these folks have.

Geoff Daily has given EC Fiber his stamp of approval:

First off, compared to the VTel project, I'm immediately inclined to favor ECF's by the simple fact that they're a public project, which the original stimulus language suggested should get priority, and they're looking for a loan rather than a grant, and I think so long as a project will be self-sustaining, it's always better to loan money that you'll get back some day than to just give handouts of free money. I also prefer ECF's project because they're going to be bringing fiber to every home in their service area. They're not going to leave anyone behind, creating second-class digital citizens. Finally, I think that ECF's project has a greater chance of establishing a model that the rest of the country can learn from, proving both that fiber can be economical in rural areas and that open multi-service networks can be financially viable.

Vermont was also one of the four states to receive the first awards for mapping broadband. Vermont is doing the work in-house:

The new federal funds will be managed by the Vermont Center for Geographic Information (VCGI) to implement the Vermont Broadband Mapping Initiative, a collaborative broadband data collection and verification effort involving partners from the public, private and academic sectors.  This team -- VCGI, the Vermont Telecommunications Authority, the Vermont Department of Public Service, the University of Vermont’s Center for Rural Studies, and Vermont’s Enhanced 9-1-1 Board -- will use the latest technology to create a comprehensive and verified broadband availability map. 

...
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Posted September 30, 2009 by christopher

On the Daily Yonder - offering coverage of rural issues - Craig Settles offers advice to community networks on the need to attract institution and business customers because networks rarely generate enough revenue to make debt payments by focusing solely on residential subscribers.

When communities compare the costs of different technologies, they often get too caught up in the upfront costs and ignore the ongoing costs (operating costs, or opex). He offers an example of a modest wireless network:

It’s important to understand that while it costs a lot of money to create a broadband network, over a five-to-ten-year period, it costs even more to operate that network than to build it. Say it costs $1 million to build a wireless network. During the municipal wireless heyday, it was estimated to cost 20% of buildout expense to operate the network annually – to pay for customer service, maintenance, upgrades, etc. That’s $200,000 a year.

This is a great intro article for those who may not be used to thinking about the economics or business plans networks need.

For the rest of us, it is a strong reminder of how many networks start (and a good path for those who want to create a network):

Santa Monica, California, had a legacy PBX phone system and slow connection circuits from incumbents. The city pooled money it was already paying for voice and data services, using this capital to build a fiber network and implement new communication technology.

City CIO Jory Wolf states, “By switching to fiber we realized a $500,000 savings in data circuits and $250,000 savings in voice circuits, all of which stayed in our fund. Ongoing savings enabled us to provide our police with video streaming in their vehicles. We have excess bandwidth, so we provide (a) large number of sites with free wireless access.” Wolf said that the city is also selling companies fiber lines that haven't yet been turned on. “Our network budget is self-sustaining,” he said, “and I have $2.5 million in capital.”

I remember Tim Nulty saying that Burlington Telecom started the same way. They figured out how much they were paying each month for telecom as a city. They used that number to compute how much they could spend...

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Posted August 12, 2009 by christopher

What can states do?

Many states want to improve broadband access for their citizens. Some states genuinely want to act and others are content to give some money to industry-front group Connected Nation and form a Task Force in order to give the appearance that they are doing something rather than actually taking action.

However, the problem is difficult because in a time of severe budget crunches, states may not have the funds to invest directly in infrastructure or help communities do so themselves. There are some options - and I recently highlighted one: Virginia's Broadband Infrastructure Loan Fund.

The Virginia Resources Authority (VRA) now has a revolving loan fund to help communities build the broadband infrastructure they need. Unfortunately, the fund has started empty but they are in search of grants to get started until the state can seed it.

Even without the revolving loan fund, which keeps a very low interest rate for loans, the VRA is available to help communities that want to approach the capital markets for infrastructure funds. Communities may not have sufficient experience in this arena or may just benefit by having the VRA combine multiple small needs into a larger package at a better rate.

Elsewhere, the Vermont Telecommunications Authority was supposed to serve a similar function but seemed to be immediately captured by Fairpoint and turned into a tool for private companies.

One of the most basic things a state should do is ensure it has not created barriers to public investments in broadband networks. It may be a few years old, but the American Public Power Association created a list of laws blocking or retarding community broadband networks. These should be repealed. Those arguing that the public sector has too many advantages should read our discussion about the level playing field.

Capitol photo by Rob Pongsajapan

Posted June 30, 2009 by christopher

Last year, Verizon sold all of its landline assets in New England to a tiny company named Fairpoint. Even as Verizon was starting to wire suburban and urban areas with fiber-to-the-home networks, it continued to underinvest in rural communities, where those lucky enough to have DSL generally paid a lot for slow very slow speeds.

Rather than continue ignoring these properties, Verizon sold them to Fairpoint in a deal that some questioned as fraught with problems. Fairpoint has since met expectations: it is woefully unable to provide good service to people living in New England.

More recently, Fairpoint is hinting at future bankruptcy

In a filing with the Securities and Exchange Commission, the company warns that if the offer does not go through, it might not be able to make its interest payments due Oct. 1.

In a worst-case scenario, it said, this could lead to "an alternative restructuring plan (that) may include a bankruptcy."

If this were a publicly owned network, it would be championed by cable and phone companies as proof that those networks fail. We are not suggesting the opposite - that this is proof that all private networks in rural areas are doomed to failure, but it does offer evidence that a purely private sector-based model in rural areas is foolhardy.

Verizon is now getting rid of more rural assets by selling them to Frontier - a company better poised than Fairpoint to handle them, but also a company known for offering slow DSL speeds with a 5GB cap.

Communities that want to keep up with the rest of the world should look to themselves to build the networks they need. The private sector is either unable or unwilling to build the necessary networks to compete in the digital economy.

Posted June 8, 2009 by christopher

This is a transcription of the speech Nulty gave at the 2008 Broadband Properties Summit. Nulty describes the history of the Burlington efforts before and after he joined to build their fiber-to-the-home system. He talks about incumbent obstructionist efforts, the role of consultants, and the economical questions they considered before building.

He goes on to discuss why FTTH is practical in rural areas - and less expensive than most claim. Finally, he frankly discusses some of the tensions involved with running community networks when they are a city department (as opposed to a utility that may be at arm's length or a nonprofit).

Posted April 30, 2009 by christopher

Benoit Felten of FiberEvolution.com interviews Tim Nulty (former GM of Burlington Telecom, currently working on massive rural FTTH network in Vermont) at the Freedom to Connect Conference. Covers many topics, especially the economics of FTTH and why the public sector should invest in these networks.

Other videos from this conference are available here.

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