Who Will Build 'Last Mile' Broadband

Front Page / Jul. 22, 2010 1:28pm EDT

By M.D. Drysdale

Aided by grants from the federal stimulus package, two telecommunications companies will embark on a $62 million commitment to bring high-speed broadband to southern, central, and northeastern Vermont.

The lightning-fast service will be extended to institutions such as schools and hospitals, but critics say it won’t do much for homeowners who need it most.

Sovernet Communications of Bellows Falls will receive $33.2 million grant and put up $11 million of its own money as part of a public-private partnership with the Vermont Telecommunications Authority (VTA). The joint partnershp will be called Vermont FiberConnect.

Springfield-based Vermont Telephone Co. (VTel) received a grant of $12.2 million and will put up $5.5 million of its own. VTel’s projects will largely be within its own current service area in southern Windsor County, but FiberConnect will run broadband throughout large parts of the state, including the White River Valley.

More than 500 schools, hospitals, and other institutions will receive broadband connections, according to the announcement.

The new networks are called “middle-mile” extensions of the system and are likened to a skeletal infrastructure. This network can be tapped later by companies which will run broadband to individual homes in the hills and valleys of Vermont. That’s called the “last mile” network.

The question this week appeared to be when the “last mile” lines will be constructed and who will construct them. That part of the puzzle has yet to be solved, and the new federal stimulus funds are not intended to solve them.

That drew some biting criticism this week from Loredo Sola, governing board chair of ECFiber, Inc. a consortium of 23 towns dedicated to bringing “last mile” service to the White River Valley and elsewhere.

‘Redundant’ Project?

The “middle mile” customers are already being served by the big commercial carriers like Fairpoint and Comcast, Sola said, and the $62-million project will largely be supplying “redundant capacity.”

For instance, he said, Vermont Law School already has plenty of capacity, but “there’s no broadband to the students homes.

“We don’t need another provider to VLS,” he said. What we need is a provider to the home network.”

He noted that the contract with Sovernet is “very lucrative.”

“This is a grant, it doesn’t have to be repaid,” he pointed out. “It’s a handout to SoverNet.

“This is lousy public power policy. It’s not serving the real needs of Vermont, not providing economic jobs and incentives.”

Chris Campbell, the executive director of the Vermont Telecom Authority defended the grant, while admitting that “last mile” service is still a problem.

The new “middle mile” system to be built with the stimulus grant, he said, will indeed serve institutions that already have broadband. But the new network will be far faster, he said.

“Few of the institutions have broadband of the type that we’re talking about. We’re talking about gigabite levels of capacity.”

It’s also important that the new networks will connect institutions to each other, not just plug them in, he said.

“I don’t agree that it’s redundant capacity,” Campbell said.

Sovernet was chosen as a partner, he explained after a “request for proposals” was sent out to the industry. Three companies responded, he said. The unsuccessful bidders were Fairpoint and LevelThree.

Who Will Build It?

The VTA executive director admitted that “last mile” service is essential. “This project is not the entire (telecommunications) strategy,” he told The Herald.

Asked just who will be providing the “last mile,” he agreed that it’s a good question.

“It’s hard to point to just one solution,” he said. “There are really a wide range of service providers that have the potential to be part of the solution.”

Loredo Sola of ECFiber pointed out that Comcast and Fairpoint, which have installed “middle mile” trunk lines, haven’t followed through with service to homes and small customers.

Campbell agreed. “I don’t see them (Fairpoint and Comcast) proceeding in a way that they will be the entire solution,” he said.

In the White River Valley, ECFiber would like to be that solution, but it was turned down in an application for stimulus money and is now hoping for financing through investment banks.

It’s uncertain whether ECFiber would be allowed use the new “middle mile” network when it’s put up, Sola said. Sovernet is “not required to deal with us” to make its publicly-financed network available, he charged.

Campbell wouldn’t deny that, but he stated that SoverNet had “made commitments” to assist other companies provide last-mile hook-ups.

“We would expect them to follow through,” he added.

In any case the VTA isn’t set up to fund major last-mile projects. VTA may have about $2.8 million to give out later this year, but that’s just a drop in the proverbial bucket.

ECFiber Moving Ahead

While awaiting word from the financial markets for the private loans that would make possible its $60 million “last mile” build-out in central Vermont, ECFiber wants to start work on a small scale this summer.

The firm has obtained a pre-sale agreement on an empty industrial building near Exit 3 in Royalton and wants to turn it into a communications “hub” that could serve up to 1000 customers with high-speed fiber broadband transmission.

Loredo Sola, governing board chair of ECFiber, has already approached the town of Royalton, about applying for a community development grant that would help finance the hub. The selectboard agreed to submit the application (which would not require funding from the town). An explanatory meeting for Royalton residents will take place July 27.

Even if the grant is approved, the pilot project still would require a considerable bank loan, Sola said. He wasn’t sure what the pilot project would cost in all.

The company hopes to get started on the pilot this summer, to help demonstrate the benefits of ECFiber’s model.

“The thing that drives economic growth is fiber to the home,” he insisted. “How do you sell a house if you don’t have broadband? That’s our focus.”

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