Tim and Leslie Nulty: It’s time for Vermont to do broadband well
This commentary is written by Tim and Leslie Nulty, who were senior executives at ValleyNet and played a key role in the organization and development of ECFiber. Tim designed and built the original Burlington Telecom. They now own and manage Mansfield Community Fiber Inc. in rural northwest Vermont.
A tsunami of broadband funding is about to strike Vermont. Let’s not repeat the mistakes of the past and don’t waste this opportunity.
The Senate is studying two different bills intended to guide the use of the expected funds: H.360 from the house and S.118 of a multi-party group of senators. Each has its strengths and weaknesses. The intentions of both are good, but as worded neither is likely to achieve the desired results.
H.360 is considering $ 160 million in funding under the US federal bailout law, of which only $ 10 million is for loans. This is a big mistake. Loans have major advantages over grants. A loan fund is replenished as loans are repaid, so financing does not require annual appropriations.
The loans oblige the beneficiaries to “take seriously” their projects by choosing the best technologies and by carrying out their projects with a maximum of frugality and care. Grants, on the other hand, invite both donors and recipients to be wary of costs and long-term sustainability. Grants are “free” to their beneficiaries, but they are not free to society. On the contrary, their invitation to neglect and waste imposes substantial societal damage when real resources and time are wasted on unachievable or too expensive projects. Vermont has seen far too much of both.
Requiring beneficiaries to repay their funding, with interest, is the best way to ensure that beneficiaries only undertake projects that they themselves consider viable.
A number of companies are currently deploying REAL broadband networks – that is, fiber-to-the-home (FTTH) networks – in rural Vermont, targeting unserved and underserved communities. These include ECFiber, Franklin Telephone, Waitsfield Telephone, MCFiber, and others. All used little or no grant funding, relying instead on loans and their own funds. Their success proves beyond a reasonable doubt that it is perfectly realistic to build successful FTTH anywhere in Vermont with financing on commercial terms.
Of the two current bills, S.118 provides much more lending possibilities, relies less on freebies, and opens these loans to anyone with the demonstrated ability to use them.
In contrast, H.360 routes almost all of the potential hundreds of millions exclusively to newly formed communications union districts and / or individual cities that were not members of CUD before December 2020. It excludes all other forms of communication. ‘trade organizations of access to available finance. unless they are successful in negotiating a contract with a CUD.
Many of these 11 CUDs are less than a year old, have little or no technical or administrative capacity or prior experience in broadband development, and little or no equity to support loan financing. While they should be supported for their commitment to their communities, we shouldn’t put all of our eggs in one basket.
It makes absolutely no sense to deny funding to local entities that are already doing fruitful work. The sensible and pragmatic thing to do is to support and accelerate the progress already made – not derail it by predetermining the eligibility of funds solely on the basis of the form of organization of the company.
The bills also differ in their definition of “broadband”. H.360 uses a symmetrical 100 Mbps (“100/100”) service as the standard to benefit from the funds offered. This is widely considered to be appropriate for today’s internet use. S.118 sticks to a now obsolete definition, 25 Mbps down / 3 Mbps up (“25/3”).
The FCC, under pressure from the big phone companies, passed 25/3 six years ago when broadband was defined as 4/1. 3/25 is now obsolete; no one is backing it except the big telecom companies who want taxpayer-funded grants to expand their outdated infrastructure.
New FCC members will be appointed soon and “25/3” will most likely be reclassified. 3/25 cannot support remote work, distance education, or telemedicine. They all require robust download capacity, are in high demand right now, and are expected to accelerate in the future. Vermonters can’t thrive on substandard service – and that’s what 25/3 really is.
Sadly, both bills recreate the Vermont Telecom Authority, which was rightly dissolved in 2014 after five years of blatant non-execution. Since then, the Department of Civil Service and the Vermont Economic Development Authority have developed considerable knowledge and experience in overseeing broadband projects. Together, these agencies are now far more competent than ever before the old telecommunications authority. We should be building on that foundation, rather than “recreating the wheel” – especially a “wheel” that was so dysfunctional the first time around.
It is easy to improve these proposals:
- Funding should place a strong emphasis on loans over grants.
- The disintervention of the Vermont Telecom Authority should be abandoned and, instead, the Public Service Department and the Vermont Economic Development Authority should be strengthened to administer the programs for which they are already best suited.
- Broadband should be defined as a minimum of 100/100.
- Unfair and irrational discrimination in funding should be removed. Access to funds should be open to anyone with proven ability to deliver and who is willing to repay them.
Let’s not waste this unprecedented opportunity to make broadband right for the Vermonters.