Stakeholders cautiously hopeful for ‘new’ CoverageCo

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Stakeholders cautiously hopeful for ‘new’ CoverageCo

Sun, 10/14/2018 - 11:05am -- tim

by Timothy McQuiston, Vermont Business Magazine CoverageCo seemed like a good idea when the state partnered with Vanu Bose in 2012. But it didn’t work out for several reasons. Bose died nearly a year ago. It financially failed last spring. And the Vermont Public Service Department terminated the CoverageCo contract in August. On October 30 the PSD is scheduled to unseal bids on who will take over the rural cell service. That date was pushed back from October 1. RFP responses will now be accepted until October 29.

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None of the CoverageCo cell sites are active, according to Clay Purvis, Director of the PSD’s Telecommunications and Connectivity Division. This includes the solar-powered ones installed following Tropical Storm Irene.

“My understanding is that CoverageCo is not operating,” Purvis told VBM in late September.

There is no switching activity on any of the sites, he said, which indicates that none are working. “CoverageCo is unable to cover any traffic,” he said.

“We’ve issued a termination letter and we’re waiting for who might take it over,” Purvis said.

“We’re in a boring period right now,” Purvis said, as they wait for bids to come in and be unsealed.

That termination letter was sent by PSD Commissioner June Tierney to CoverageCo on August 22. Tierney terminated the department’s three master lease agreements with the company, and the next day informed the Legislature.

The PSD then issued a request for proposal seeking a new vendor to operate the network. This past session the Legislature appropriated $900,000 in capital funding for the purpose of completing the network.

The PSD hopes this funding will attract an alternative operator, build out the network, and upgrade equipment where necessary.

“The Department anticipates having a vendor in place as soon as possible,” Tierney said in her letter.

A CoverageCo radio. The microcells have about a half-mile range. CoverageCo file photo.

The PSD RFP states in part: “The Department of Public Service seeks a qualified vendor to operate a state-owned wireless network of compact radio units that provide cellular mobile radio service along Vermont highways. The vendor will work in partnership with the state to operate the existing wireless network and expand wireless coverage in unserved areas. The Department is open to creative solutions to address the lack of wireless coverage. While the Department cannot offer financial support for operational costs, capital funding is available to expand and improve the network.”

That will take some doing.

Purvis acknowledged that the plan going forward to replace CoverageCo is subject to change.

The $900,000 appropriated by the state is only for capital equipment, he said. “It’s not a lot of money.”

The radio-based microcell equipment that the state bought is 2G only. There are about 400 radios, Purvis said, with many “still in the box.” They are available to any winning bidder, he said. Fewer than half were ever activated.

CoverageCo never could keep up with its many vendors, including what it owed the PSD. The state had bought the equipment and then leased it back to CoverageCo, which did not keep up with payments.

CoverageCo also owed money to the various electric companies and DSL backhaul providers (to enable calls and data to get into the wider telecom and Internet systems).

Green Mountain Power and FairPoint were major vendors. GMP was willing to forego terminating service, but FairPoint’s successor, Consolidated Communications based in Illinois did not, and cut off service in May and with it CoverageCo lost most of what was left of its system, including cell phone, data and 911 service.

The state was also supporting continued e-911 geolocation service, which by statute is available through the end of this fiscal year, Purvis said. It allows first responders to find someone simply by tracking their cell phone. But since the cell sites are all down and cell calls cannot be made, including 911 calls, the geolocation is not available.

Vanu Bose formed Vanu Inc, and conceived of the modestly priced, low-tech rural cell service as a way to get around the cost and regulatory hurdles of erecting large cell phone towers. The Vanu radios were hung on telephone poles.

Even those big cell towers are not fully reliable in the nooks and crannies of state’s topography, as every Vermonter knows.

Vanu Inc still has a stake in the outcome of CoverageCo, or what it might be called going forward, because they manufacture and support the 2G radios, Purvis said. Those radios, which cover about a half-mile, cannot simply be upgraded to 3G or 4G.

Representative Laura Sibilia (I-Windham/Bennington) has been on the front lines of rural cell coverage.

It was just a year ago (September 2017) that she met Vanu Bose at Twin Valley Middle High School in Whitingham to launch the 2G cell service there.

Any place called Twin Valley can be counted on to have tricky cell coverage under the best of circumstances.

Sibilia confirmed to VBM that CoverageCo cell service is not now operating at Twin Valley.

Her district covers the southern Deerfield Valley between ridges of the Green Mountains. It includes towns known for their wind turbines and remoteness, like Searsburg and Readsboro.

“I appreciate that Vanu was entrepreneurial,” Sibilia said, who is an economic development specialist with the Brattleboro Development Credit Corp and previously with the Mount Snow Chamber.

There were financial problems early on, she said. And in any case, Sibilia said, CoverageCo was never the ultimate solution to rural telecom.

“I think it was functioning as an emergency communications system.”

But even at that, “It was better than nothing.”

Like many others, she’s hoping the $25 million FirstNet project contracted to AT&T will greatly expand rural coverage.

Sibilia at least wants the new CoverageCo to at least get to the rural villages, even if it doesn’t get out to all the byways.

“I think there are better ways of doing this and more cost-effective ways of doing this,” she said.

There’s no regulation of the Internet, cable or cell service on the state level because of federal preemption, she said, so there is little the state can do to force telecommunication firms to set up Internet connections.

Because so much more of our information and connection is accessed through the Internet, rural areas, which were already less connected, are losing even more ground, Sibilia said.

Also, as public services are consolidated, they are getting farther away from more remote areas, making access even more difficult.

Sibilia wants the 2G service in the villages restored as soon as possible, which is where the immediate need is.

“I’m hopeful for the CoverageCo RFP,” she said. But the cost to the state does concern her.

“I want to prevent further money from being wasted.”

The service was mainly employed on the eastern side of the Green Mountains in the far south and far north of the state and a few spots in-between.

All told, the state has sunk about $4 million into the project.

Finding what is likely millions more dollars to restart or upgrade the system is not what the state has said it wants to do, which is why many are hopeful for FirstNet.

But not everyone shares that enthusiasm, tepid as it might be, for AT&T.

Stephen Whitaker is an independent advocate and frequent burr under the saddle of the Public Service Department.

He opposed the state’s “give-away” of the $25 million FirstNet money to AT&T (every state eventually went with AT&T rather than keep the money and set up their own network); he has pushed the state to enact a 10-year Telecommunications Plan; and he’s been a vociferous supporter of CoverageCo, or at least something similar, in order to bring cell service and, importantly, 911 service to Vermont’s unserved rural areas.

This is no small deal. According to CoverageCo, in the 12 months ending last March, some 1,215 e911 calls were made on the system, as limited as it was.

One of Whitaker’s points of contention is the need for a propagation study to understand where exactly Vermont needs cell service. Without it, he said, money will continue to be wasted in duplicative service while leaving rural areas without coverage.

In part, Whitaker said in an email: “Salvaging the State's multi-million dollar microcell effort, crippled by both CoverageCo and the Department’s deficient planning, will be a Herculean task and it simply will not work in the absence of a strong, reliable, cooperative state agency partner, a propagation study to accurately determine where the microcells are needed, access to affordable DSL and fiber backhaul and a clear commitment of USF funding by both the state and from its private sector partner.

“As an interim measure, the Governor should consider transferring the entire microcell planning and restoral operation effort to VTRANS or ACCD (Commerce Agency), assign the PSD one task, to make available state-owned fiber backhaul and to petition the PUC for reduced DSL backhaul and pole attachment rates as well as meterless microcell electric installs at state regulated minimal rates. The system must fundamentally be designed and operated in a manner so as to preclude FCC preemption of the Vermont PUC's legal jurisdiction.”

The FirstNet network is being built specifically for public safety. It was conceived of following 9/11. The purpose of the network is to provide broadband wireless communications to police officers, firefighters, paramedics and other public safety and support personnel to meet critical emergency communications.

It would start out as a 3G/4G system and eventually be much more robust than that.

When not being used by first responders, all telecom carriers would be able to use the network, similar to typical roaming agreements among cell providers.

However, AT&T is not required to cover the entire state through FirstNet and there is no guarantee that even over the 25-year length of its contract that it will ever cover the entire state.

CoverageCo, as first reported by VBM in March, fell into deep financial trouble after its founder Vanu Bose, of the Bose audio family, unexpectedly died last November. 

Service rapidly started to fall off across the state. Twin Valley and the surrounding area soon went dark as did the area around Grace Cottage Hospital in Townshend. While the hospital worked with the state and AT&T to set up a mobile site there, nearly all the rest of the CoverageCo sites, initially about 160, went dark.

Contributing to the financial hardship was that AT&T declined to offer roaming on the system. AT&T is the largest cell provider in Vermont. AT&T subsequently joined the network in May 2018.

Generally, the CoverageCo cell sites deliver a half-mile radius of cell service, depending on terrain and location.

There were 157 units operational at its peak.

Consolidated supplied DSL service to about 120 microcells, or the vast majority of the system.

CoverageCo owed Consolidated at least $100,000 when it cut off service on May 23, 2018.

CoverageCo then petitioned the PUC as an emergency order to force Consolidated to restore the DSL it provided to the system.

As a regulator, the PUC has significant power over utilities to maintain the public good. But in this case, it lamented that DSL is a federal issue and the state has no jurisdiction and therefore dismissed the case.

As Consolidated and the DPS noted in their filings, federal law (preemption) places significant limitations on the state’s ability to address the issues related to non-payment for DSL service.

CoverageCo won a contract from the Vermont Telecommunications Authority in 2012 to set up 357 micro cell sites that use proprietary radio signals to allow for cell service in rural areas of the state.

A CoverageCo map of installed sites (green dots). None are currently operational.

The VTA was eventually folded into the Department of Public Service.

The fact that it was a contractual, public-private relationship and not a regulatory one also created issues because there is no requirement on the part of CoverageCo, as there would be with a typical utility, to maintain the service.

To end service, a regulated entity would have to apply to the Public Utilities Commission in order to abandon it. In this case, the various utility and backhaul providers can just cut off the local service, just as they could for anyone not paying, say, their cable bill.

Nor could the state simply require CoverageCo or the vendors to tell them what was going on and reveal who all the vendors were.

The PUC ruling reinforced those regulatory limitations.

This story originally was published in the October issue of Vermont Business Magazine and has been updated to note that the RFP bid date has been extended to October 29 and bids will be unsealed October 30. Responses were originally due September 28 with bids unsealed October 1.

Q&A

Questions and Responses to State of Vermont Request for Proposals “State-Owned Wireless Network Operator” issued August 23, 2018, as provided by the Department of Public Service.

This document, issued September 21, 2018, includes responses to follow-up questions raised during the bidders’ conference. Go to the PSD’s website publicservice.vermont.gov for further information.

1. To whom were the pole attachment licenses for the installed microcell systems issued? Can these licenses be transferred?

The Department inquired with several pole owning utilities and was told that the licenses for the microcell systems were issued to Vanu CoverageCo, and that these licenses can be transferred to other companies. The Department recommends that bidders contact the pole owning utilities for specific information.

2. Are the microcell systems under warranty? Will the manufacturer support the equipment?

The microcell systems were manufactured by Vanu Inc. and are no longer under warranty. The company has expressed to the Department that it desires the continued operation of its products. It is the Department understanding that the company will continue to support the products. The Department recommends that bidders contact the company directly for specific information.

3. Will the lease of the microcell systems include the electric meter bases?

The installed microcell systems incorporate all electric hardware on the poles not owned by the electric utility, including the meter receptacles.

4. What is the make and model of the antennas?

Vanu deployed the Digital Antenna model 1229-PB-15. The specifications are on company website: www.digitalantenna.com/prods/cellantenna_mimo_backhaul-1229.html

5. Would the Department consider extending the RFP response deadline?

The Department has considered the request for an extension and intends to extend the response due date to October 29, 2018 by 4:00pm. The Department will issue an addendum modifying the schedule (which it has since agreed to).