Governor Phil Scott signed H513 into law June 20 in Dover. With him is DPS Commissioner June Tierney, left, Representative Tim Briglin (D-Thetford), and Representative Laura Sibilia (I-West Dover), directly behind Scott. Courtesy photo.

by Timothy McQuiston, Vermont Business Magazine The state is no longer counting on an outside force to upgrade the state’s broadband Internet coverage. There is not going to be a single Rural Electrification Act like from the 1930s or an Interstate highway push like from the 1950s. To get high-speed Internet to outlying areas, and even some in-lying ones, several different strategies involving public and private efforts are under way at the state level, but it ultimately will require a local effort to succeed.

“No one is coming to save you,” Representative Laura Sibilia (I-West Dover) told VBM. “This is critical, critical work.”

AT&T’s FirstNet plan to upgrade cell service to benefit first-responders – and by scope assist the public – will likely provide more coverage in Vermont. And commercial investment will also likely expand service.

But it’s clear, Sibilia said, that Vermont needs a local, multi-pronged approach to solving the widespread problem of slow or no Internet.

A new broadband bill (H513) was signed into law by Governor Phil Scott in June that will provide real money, and new financing from the Vermont Economic Development Authority, among other things, to expand or kickstart new programs and businesses.

“Tremendously optimistic,” Sibilia said. “I absolutely believe this is a game changer.”

Sibilia has been a vocal proponent of every effort to get broadband into rural and underserved areas. Her district in Windham County is sprawling and full of mountains and valleys with limited Internet and sketchy cell service. She’s also the Director of Regional Economic Development Strategies at the Brattleboro Development Credit Corporation.

Two years ago, a modest solution to get her district and the surrounding area better connected looked promising.

CoverageCo was a private-public partnership which brought audio entrepreneur Vanu Bose up from Boston with the concept of hanging small radio-based, 2G cell service units on telephone poles. It might have been relatively low tech, but it was relatively low-cost also. It worked. Until Bose unexpectedly died in 2017 and the money ran out. There were many other problems, including AT&T not participating in roaming until near the end.

A lot of utilities, vendors and the state of Vermont were left holding the bag on unpaid bills. Towns like Readsboro, meanwhile, lost cell service and the Internet that went with it.

Sibilia isn’t ruling out a CoverageCo comeback as one small part of the strategy to boost rural coverage. The state owns the equipment and some of it is still sitting never-used in boxes.

“The DPS currently has a survey out to towns regarding their willingness to partner on CoverageCo – has some possibilities, so not dead yet,” Sibilia said. Readsboro could be a candidate, she said.

She said it could be a viable option in some locations and in any case it’s better to get started and not wait and hope for the new broadband law, or something else, to kick in and bring coverage to your town.

Governor Phil Scott signed H513, An act relating to broadband deployment throughout Vermont, in Sibilia’s district. The governor said it invests in expanding broadband connectivity throughout the state.

“While we know it’s not a cure-all to economic challenges, we can all agree reliable broadband is important for economic growth, education, public safety and overall access to information, services and people around the world,” said Governor Scott. “I want to thank the House Energy & Technology and the Senate Finance Committees for their work on this legislation, as well as my team at the Department of Public Service and the Agency of Commerce and Community Development. It was a bill with genuine consensus in Montpelier, which is far too rare.”

Scott signed it at the Dover Town Hall and was accompanied by Representative Sibilia, Public Service Commissioner June Tierney, Representative Tim Briglin (D-Thetford), Representative John Gannon (D-Wilmington), Representative David Durfee (D-Shaftsbury), Representative Kelly Pajala (I-Londonderry), Senator Becca Balint (D-Windham), Karen Horn of the Vermont League of Cities and Towns, and additional members of the Legislature and the administration.

The legislation increases funding to the Connectivity Initiative to provide Internet service in unserved or underserved regions of the state and creates a new Broadband Expansion Loan Program within the Vermont Economic Development Authority (VEDA) to provide implementation capital to start-up broadband providers to develop community-based solutions.

“One of the many things we can celebrate about H513 is that it is a law that doesn’t just contemplate or authorize better connectivity in Vermont. Rather, it is a law that will do things – things that are important for our state,” said Tierney. “More Vermonters will get broadband because of this bill. Vermont communities will have new financing tools and a coach to help with their projects. H513 makes those resources available and so much more.”

Much of the money focus of the broadband law is on the expanded lending authority for a new loan program offered by the Vermont Economic Development Authority.

VEDA President and CEO Cassie Polhemus said, “It’s a public policy initiative.”

She said it doubles VEDA’s lending authority for a single project to $4 million for new or expanding broadband networks. The existing maximum is $2 million for energy loans and $1.5 million on regular commercial loans.

The other big change is that VEDA can be the primary lender, instead of a subordinate one. Typically they work with banks and other financial institutions when financing a larger project.

The annual broadband program limit is $10.8 million. To put that in perspective, VEDA issued a total of about $55 million in 2018.

Because VEDA will be sticking its neck out a bit more, the state is including $540,000 for VEDA’s loan-loss reserves and $6 million more in moral obligation (state guarantee).

As is the case with any loan, Polhemus said they will have to do their due-diligence with their underwriting. They have not received any applications for the new broadband program yet, she said.

“I feel this is a real benefit on an economic and social level,” she said. “It’s really important.”

Polhemus said that while much of the focus has been on the development of a local fiber network, like the group of towns in Orange and Windsor County that created ECFiber in 2011, the program is open to any individual, non-profit or for-profit entity. ECFiber recently surpassed 3,500 customers.

A hospital, for instance, could set up a network that could help its patients, say, through telemedicine, she said.

Photo: ECFiber workers. Courtesy photo.

As for the next ECFiber?

“CV Fiber and Jeremy Hansen will probably be first. Kingdom Fiber and Michael Birnbaum may be second,” Sibilia said. CV is centered in Montpelier and surrounding towns. Kingdom Fiber is based in Hardwick.

“In my district, my town of Dover actually has put out an RFP for a build a few years ago, so they are probably closest. I certainly have interested folks in Readsboro and Wardsboro, but they need the next step of figuring out who they will partner with, planning the build and financing.

“Southern Vermont has no organized structured current effort at this time, and by that I mean an effort that has undergone planning and is ready to go. I’m actually just finishing up a draft release from the Windham County Delegation to our towns about our intention to host a public forum with the DPS new staff person and outlining the requirements of the new Broadband Innovation Grant program as soon as those details are finalized.”

Key to this program are volunteers, or towns stepping forward to lead, she said.

H531 raises the Universal Service Fund fee from 2.0 percent to 2.4 percent (and requires retailers to collect and remit the fee in connection with selling prepaid calling plans). The resulting $1.2-1.4 million in additional annual revenue would largely go to the Connectivity Initiative, which provides grants for the deployment of broadband infrastructure.

The bill also appropriates almost $1 million from the General Fund for studies concerning the feasibility of contemplated new Intermunicipal Communications Union Districts similar to ECFiber, for Connectivity Initiative Grants, and for studying the idea of electric utilities providing broadband connectivity.

Finally, H513 establishes a PEG Access Study Committee charged with considering changes to the state’s cable franchising authority and developing alternative regulatory and funding mechanisms to support public, educational, and government (PEG) access channels.             

In total, the state invested an additional $1.5 million to initiatives, which includes:

• Support for rural broadband solutions through a new Broadband Innovation Grant Program;
• Creation of a new Broadband Expansion Loan Program to provide alternative broadband providers with capital that recognizes start-ups in this field;
• Investment in the Connectivity Initiative to provide access to Internet service in unserved or underserved locations;
• Support for municipalities with technical assistance grants through the ThinkVT Innovation Program; and
• Creation of a new Broadband Technical Assistance Specialist to provide outreach and support to rural communities with broadband projects.

The bill passed the House March 26 on a vote of 139-2. It was signed into law by Governor Scott June 20, 2019.

Sibilia put together her own list of  bullet points:

• The new bill is really a radical shift in Vermont broadband policy, she said.
• It starts from a place of acknowledging broadband is critical infrastructure, and accepting that national providers will not cover the least profitable parts of towns and they will continue to invest hundreds of millions to prevent states from being able to force them to provide that coverage.
• It shifts power away from the national providers, which is the regulatory environment the national providers have been fighting to maintain.
• It recognizes that the state does not have $600 million to invest in a state fiber system.
• It empowers communities to solve the broadband problem for 100% of their residents through a mix of technical assistance, planning requirements and multiple types of financial tools.
• It deregulates pole attachment processes, incentivizing faster deployment of fiber.
• It looks to the future and compels DPS to study feasibility of electric utility infrastructure being used to expand broadband access, the Treasurer and Bond Bank to work with the Scott Administration on recommendations for general obligation bonding, and establishes a commission to consider the future of public access television.

Tim Briglin, Chair of the House Energy and Technology Committee said: “Access to high-speed broadband service is a fundamental requirement for growing our rural economy. If we are serious about creating a Vermont that works for everyone, we must empower communities with the tools they need to solve deficiencies in broadband connectivity.”

House Speaker Mitzi Johnson said, “This bill invests approximately $1.5 million in Fiscal year 2020 into three areas of need: the Broadband Innovation Grant Program, Connectivity Initiative grants, and increased funding for the Department of Public Service. These investments are targeted at the 17,000 Vermont households that lack access to even the most basic Internet service. If we are marketing Vermont as a place you can work remotely, Vermonters must have reliable Internet access. Vermonters across the state, especially in rural communities, benefit when they can tap into the commerce, educational opportunities, and resources available on the web.”

In also supporting this effort, Greg Marchildon, AARP Vermont State Director, said: "AARP is pleased to see H.513 signed into law and congratulates lawmakers for making broadband expansion into rural Vermont a top priority. Broadband is the electricity of the 21st century. Communities, families and businesses that lack broadband service are falling behind and this legislation gives towns and cities the tools to plan for and deploy fast and reliable broadband service. For older Vermonters, broadband is essential for reducing social isolation and improving access to civic engagement, telehealth and their communities. Being able to send emails and engage in social media allows older Vermonters to stay connected to family and friends, access online newspapers and magazines and be a part of the digital world we all live in today. AARP Vermont was a vigorous advocate for this bill and continues to focus efforts to connect older Vermonters with the outside world.”

Another new broadband initiative is a Request for Proposal to study whether electric companies also might get into offering broadband Internet to the public.

The Department of Public Service wants to sign a contract with a company that can provide a Feasibility Study of Electric Companies Offering Broadband Service in Vermont. RFP responses were due July 1, 2019. The contract arising from this RFP will be for a period of 12-months with an option to renew for one additional 12-month period. The state anticipates the start date will be on or around August 1, 2019, with a report ready for the Legislature by January 2020.

The study will show the DPS whether it is feasible for Vermont electric companies to provide broadband service using the electric distribution and transmission infrastructure.

Among other things, a feasibility determination will address potential advantages of serving utilities’ internal data needs and expanding fiber for providing broadband service, the compatibility of broadband service with existing electric service, the financial investment necessary to undertake the provision of broadband service, identification of the unserved and underserved areas of the state where the provision of broadband service by an electric company appears feasible; the impact on electric rates, the financial risk to electric companies, and any differences that may exist between electric companies.

The DPS also will address any financial consequences and any technical or safety issues resulting from attaching communications facilities in the electric safety space as opposed to the communications space of distribution infrastructure.