At least $175 million in federal money has been spent in Vermont to improve broadband service.
While it has helped expand coverage and improve speeds, Vermont still has a long way to go to reach its stated goal, which would essentially require fiber optic service to every Vermont address by 2024.
Now FairPoint Communications stands to receive nearly $53 million in federal money over a six-year period to improve broadband service in Vermont.
The money is for speeds that don’t meet the current definition of broadband, but some argue that it will make a significant difference.
The money is part of Phase II of the Federal Communications Commission’s Connect America funding — also called CAF II.
FairPoint has the right of first refusal for the money and Vermont was anxious for the company, as a statewide broadband provider, to accept the funds, which it has agreed to do as part of a settlement of in a service quality investigation before the Public Service Board.
FairPoint Vermont President Beth Fastiggi says to cover the 28,399 Vermont addressesrequired by the CAF II funding, the company will also have to invest a significant amount of its own money.
The company isn’t releasing a figure, but Fastiggi characterizes the investment as a ‘risk’.
“It was actually a very difficult decision because we knew going in, even before we did the analysis based on other projects that we’ve done, that it would be much more expensive than we would have the funding for,” she says.
The state has its own program using public funds to improve broadband, but at about $1 million per year, it’s a fraction of the federal money coming to FairPoint.
FairPoint can provide fiber optic speeds to business and institutional customers, but the company's residential subscribers receive DSL broadband service. The technology uses a fiber optic backbone that feeds into the copper telephone lines that run to homes.
“This program allows us to bring fiber deeper into neighborhoods, closer to the homes," Fastiggi says of the CAF II money. "The closer we have fiber to the home that enables us to deliver faster speeds to the individual homes and businesses.”
"This program allows us to bring fiber... closer to the homes. The closer we have fiber to the home, that enables us to deliver faster speeds." - Beth Fastiggi, FairPoint Vermont President
The DSL technology FairPoint uses to serve residential customers has its limits.
Currently only the fastest residential speeds offered by FairPoint meet or exceed the FCC definition of broadband, which is 25 megabits per second (Mbps) download and 3 Mbps upload.
The state’s ten-year telecommunications goal is 1000 Mbps - or 1 gigabit - down and up, speeds that generally require fiber-to-home service. About 9 percent of Vermont addresses presently have access to those speeds.
Oddly, to receive the federal money, FairPoint and other providers only have to meet or exceed speeds of 10 Mbps down and 1 up — not even half of the FCC’s own definition of broadband.
"That to me is the great inconsistency with what is happening with that program now," says Chris Campbell who was head of the Vermont Telecommunications Authority until its functions were absorbed by the Department of Public Service this year.
"25/3 is the type of web that applications are being written for," Campbell says. He questions whether money should be devoted to projects that don’t achieve the national standard.
But state regulators like Public Service Commissioner Chris Recchia say the money going to FairPoint will make a significant difference.
“I think it helps a lot because to the extent that they invest in fiber and improve that, that will be capable of going to our [1 gagabit],” says Recchia. “The issue is that there is always some copper going to the home and those can be replaced over time.”
The question remains: Who will run fiber directly into homes to provide the speeds the state needs to reach its goal?
There are currently several fiber-to-home networks in the state, including Springfield-based VTel, Burlington Telecom and EC Fiber in central Vermont.
Each of those providers covers a limited geographic area and none of the statewide broadband services like Comcast or FairPoint has expressed an interest in extending fiber to homes.
One option is an entity created by the legislature earlier this year, called a Communications Union District. It makes it easier for neighboring towns to join together to create their own broadband systems — similar to EC Fiber, which is a community-owned system.
The systems can’t use tax revenues to raise money.
EC Fiber Chairman Irv Thomae pushed for the legislation and believes municipally owned entities can provide more Vermonters with fiber-to-home service.
“Community-based organizations like EC Fiber have already proven that its’s possible to do a lot more than one might have imagined,” Thomae says.
Thomae says he’s disappointed that the state pushed FairPoint to apply for the federal CAF II funds. Had the company not done so, the money would have gone out to bid to providers like EC Fiber, which Thomae says would have better served Vermonters’ future broadband needs.
“It’s obviously speculative, but I think had FairPoint not gone for the CAF II funding, a significant amount of that CAF II funding would have been allocated for much better technology across a very significant swath of Vermont,” he says.
"I think had FairPoint not gone for the (federal) funding, a significant amount of that (money) would have been allocated for much better technology across a very significant swath of Vermont." - Irv Thomae, EC Fiber Chair
So far no other Communications Union Districts have been formed and in much of the state there’s no one offering residential fiber service.
The speeds delivered by VTel’s statewide Wireless Open World network, which is supposed to be fully online by the end of the month will vary, depending on distance from a wireless tower and factors like buildings and terrain that may block the signal.
Comcast has announced that in the next few years it will be providing its residential customers with broadband speeds of more than 1 gigabit. A company spokesperson says the upgrade will include Comcast’s Vermont customers.
New advances like this may help bring the state’s 100 Mbps upload and download goal within reach, but for now, according to the state’s 10 year Telecommunications plan, “fiber optic cable to the premises provides the best available opportunity to meet the 2024 goal.”
Campbell, the former head of the Vermont Telecommunications Authority says Vermont should invest in building fiber that providers can then lease - as it did in several instances under the VTA.
While he stops short of saying all public money should be devoted to fiber, he says government can't afford to spend money on technologies that will have to be replaced once they become obsolete.
An earlier version of this story referred to the state's ten year broadband goal as 100 Mbps. The goal is 1000 Mbps (1 gigibit). It also referred to Irv Thomae as EC Fiber president. Thomae is chairman of EC Fiber.
