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Speeds Up, Prices Steady (or Down!) With EC Fiber

The East-Central Vermont Community Fiber-Optic Network (EC Fiber) recently announced plans to increase speeds across tiers with no increase in prices.

Changes will look like this:

  • "Basic" will increase from 7 to 10 Megabits per second (Mbps)
  • "Standard" will increase from 20 to 25 Mbps
  • "Ultra" will double from 50 to 100
  • The new "Wicked" plan will increase from 100 to 500 AND will include a price decrease. (Current subscribers to the Wicked tier who pay for 400 Mbps will also get the bump up to 500 Mbps and the price decrease.)

All speeds from EC Fiber are symmetrical so both download and upload are equally fast.

Self-Funded at the Start

Twenty-four communities in Vermont make up the consortium which began in 2009. The towns joined forces to deploy a regional Fiber-to-the-Home (FTTH) network when large corporate incumbent providers chose to invest elsewhere. Slow DSL was the best option in the area and local residents, businesses, and local institutions needed better connectivity.

Individual investors funded the initial network buildout but last year a new Vermont law took affect that allows towns to create "communications union districts." EC Fiber now functions under such a governance structure and organization officials expect to more easily attract larger investors and borrow at lower interest rates. EC Fiber hopes to answer requests to expand beyond its 24 member towns.

Characteristic Altruism

Increasing speeds with little or no rate increases is typical of publicly owned network communities. Tullahoma's LightTUBe, Chattanooga's EPB Fiber, and Lafayette's LUS Fiber have done it, often with little or no fanfare.

Publicly owned networks are also known to shun data caps, another tool big players like Comcast use to squeeze every penny out of subscribers. EC Fiber summed up why data caps are inconsistent with the publicly owned network philosophy:

An uncapped internet environment encourages entrepreneurs and economic growth. Despite the trend toward instituting data caps among commercial internet providers, ECFiber believes that caps are inconsistent with its mission as a community network. An unconstrained online environment frees businesses and individuals to be creative and innovative.

New Vermont Law Bolsters Prospects for Investing in Community Broadband Networks

A new state law is on the books in Vermont that supporters expect will encourage more investor activity supporting community broadband networks. 

The new law, which took effect this past June, allows for the creation of “communications union districts,” enabling towns and cities to band together to form geographic entities dedicated to establishing fiber-optic broadband networks for their area’s residents and businesses. 

A New Nomenclature

While Vermont towns have been able to work cooperatively via inter-local contracts, the new law is less cumbersome and uses a governmental nomenclature more familiar to most people—the union district. The union district governance model has been used for many years throughout Vermont, including by various utilities that have multi-town operations to handle, for example, sewer and water service.  

Carole Monroe; general manager of the East Central Vermont Community Fiber-Optic Network (ECFiber), a consortium of 24 Vermont communities that have banded together to provide broadband service; told our Christopher Mitchell there isn’t much practical difference for her group operating now as the East Central Vermont Telecommunications District instead of by an inter-local contract.  

“But I can say that in the municipal investment markets, they’re much more familiar with the municipal utility district, whether it’s a water district or sewer district or something along those lines,” Monroe told Chris in a recent edition of Community Broadband Bits podcast. “A municipal utility district is a common language for them. Inter-local contracts, not so much.” 

ECFiber Grew From Inter-Local Contract 

Irvin Thomae, chairman of the EC Vermont Telecommunications District board, agreed. He noted that seven years ago the east central Vermont communities created ECFiber through an inter-local contract. “But this (the inter-local contract) was unfamiliar to investors beyond our state borders,” Thomae told us.

“We needed a structure more capable of being recognized by large institutional investors. It (the communications union district) makes it easier for community broadband networks to appeal more for large investors.”

Jerry Ward, an ECFiber delegate from Randolph Center, earlier in 2015 urged residents of his community to vote to approve the governance change to a telecommunications utility district. He predicted in an opinion article in The Herald of Randolph, the union district model will be a boon for ECFiber: 

“Most of the money we’ve raised until now has come in small multiples of $2,500. The governance structure allowed by a Telecommunications Municipal Utility District should help ECFiber attract larger investors at more favorable interest rates. We expect that reorganizing along the lines of a municipal utility district will make it significantly easier to borrow enough money to build out our network much more rapidly than the 50 miles/year we’ve averaged so far.”

During the past four years, ECFiber, under its inter-local contract, has borrowed more than $7 million from predominantly about 450 local investors, connecting nearly 1,200 customers in parts of about a dozen towns, along 200 road miles of fiber-optic cable. Its customers include residents, businesses and institutions. The vast majority of the 24 towns in the ECFiber district are communities of less than 2,000 residents with a handful boasting between 4,800 to 10,000 people. 

Ward noted thousands of other residents still don’t have access to high-speed Internet.  “The rate at which we (ECFiber) can grow depends almost entirely on capital,” he said.  EC Fiber became a communications union district shortly after Vermont Gov. Peter Shumlin signed the new law on June 1, 2015.

ECFiber offers latest Internet speeds

Currently, ECFiber offers the latest generation symmetrical Internet access and a choice of five speeds (from 7 Mbps to 400 Mbps) that do not vary by time of day or according to the weather - as well as phone service with unlimited long-distance calling in the U.S. and Canada, according to its website.

Under Vermont’s communications union districts, the member towns can help facilitate the broadband networks with obtaining easements from property owners along the fiber-optic cable routes, including putting up poles and laying conduit. ECFiber’s union district board is comprised of one delegate per town with each community also able to send one or two alternate delegates to the board’s monthly meeting. 

Under the new Vermont law, a communications union district, such as EC Vermont Telecommunications, isn’t allowed to assess taxes for the initiative. (Note: This was also true for ECFiber when it carried out its operations under its inter-local contract.) A communications union district’s revenue come from subscriber fees. Currently, the ECFiber district is generating about $125,000 a month in subscriber fees, Thomae told us. 

Currently, while ECFiber is the only communications union district in Vermont, Thomae said he has had a few inquiries from other people in the state asking about the new governance structure. 

Monroe said the creation of the ECFiber network has given people in Vermont’s rural east central region an alternative to DSL service, which usually is poor at best. For people not connected to a high quality network, fast and reliable Internet service also can be a problem because the East Central region’s mountainous terrain inhibits satellite service and reception from cell towers, she told us.   

Self-Financed EC Fiber Continues to Grow - Community Broadband Bits Podcast 177

Carole Monroe is back on Community Broadband Bits for Episode 177 this week, to discuss the East Central Vermont Fiber network and its unique financing model. Carole is now the General Manager for EC Fiber. She previously joined us for episode 36 to discuss Fast Roads in New Hampshire. And we previously discussed EC Fiber with Leslie Nulty in episode 9.

Years later, EC Fiber is approaching 1,200 subscribers in rural Vermont and is growing much more rapidly with some open access dark fiber connections created by the state in a specific effort to enable last mile connectivity.

We discuss the impact on the community, how much people in rural regions desire high quality Internet access rather than slow DSL, and also a brief mention of some progress in New Hampshire to expand the Fast Roads network.

Read the transcript from this episode here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below.

This show is 21 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can can download this Mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Arne Huseby for the music, licensed using Creative Commons. The song is "Warm Duck Shuffle."

KeepBTLocal Working on Plan to Purchase BT

Burlingtonians love their municipal network. We have reported in the past that, prior to the sale of the network to Blue Water LLC, a group of locals organized to create the KeepBTLocal cooperative. Recently, the organization reaffirmed its commitment to purchase the network when it goes up for sale, a condition of the Blue Water LLC transaction.

A customer satisfaction survey in April revealed that BT customers are more than twice as satisfied with their provider as those obtaining service from competitors. The VTDigger reported survey results:

· 87% customer satisfaction with BT’s Customer Service;

· 24% of customers chose BT’s services after being recommended by a friend or family member; and

· General impression of BT by non-BT customers saw a 10% “positive” increase over their 2014 impression.

The survey also reported that customers with other providers were 40% satisfied with their service.

BT offers 150 Mbps for $55 per month and gigabit service for $85 per month or $70 per month with a 12 month contract. All speeds are symmetrical.

It has been a long road for BT after prior city leadership covered up years' worth of cost overruns creating serious financial difficulties for the community. Eventually, CitiBank filed suit to recover the $33 million Burlington owed. The two settled and Burlington eventually transferred ownership to Blue Water with the city still leasing. The ultimate goal for the city is to sell the network. Enter KeepBTLocal.

According to a June VTDigger article, the coop has been working with a former telecommunications industry executive now working as a consultant. They are developing business and acquisition plans to purchase the network when it goes up for sale within the next few years.

Andy Mortoll, Chair of the Board of KeepBTLocal told VTDigger:

“It’s just so important for so many of us in Burlington to keep Burlington Telecom a local, community-owned asset,” Montroll said. “If the city is going to sell it, we want to be the ones to acquire it on behalf of the residents.”

ECFiber Adds 1,000th Customer; Continues to Expand in Vermont

In April, ECFiber connected it 1,000th customer in Thetford Hill. Users at the First Congregational Church, described as the oldest meeting house in the state, have nothing but kudos for ECFiber and their new high-speed symmetrical Internet access. From the press release [PDF]:

“The service has been great so far,” said David Hooke, Chair of the Board of Trustees, “and we really appreciate that ECFiber is a community owned organization committed to bringing state of the art connectivity to rural east central Vermont. This will be a boon for the whole region.”

To celebrate the milestone, ECFiber Chairman Irv Thomae presented a special certificate to the Church.

This is just the latest accomplishment as ECFiber expands across Vermont. The consortium of 24 towns continues to obtain financing one expansion at a time. According to another press release [PDF], the community owned network just added an expansion to encompass the towns of Chelsea and Tunbridge. This will allow 80 more rural household to subscribe; more will soon be on the way:

“This is the first of several expansions we’ll be opening this summer,” said Irv Thomae, Chairman of ECFiber and Governing Board delegate from Norwich. “We’re pleased that more residents in this area are now able to enjoy the benefits of locally grown, full time, state-of-the-art real broadband.”

Read our previous coverage of EC Fiber here.

UPDATE: Today, ECFiber announced that it is now offering free bandwidth upgrades to local schools, public institutions, and libraries. The announcement, another example of a publicly owned network going the extra mile to improve the quality of life in the community, is published in VermontBiz. From the announcement:

“Thanks to our high speed infrastructure and state-funded dark fiber and grants that have helped interconnect many of our hubs, ECFiber has excess bandwidth (particularly during daytime hours) and we are pleased to be able to offer it to all these institutions, many of which operate under tight budget constraints,” said Irv Thomae, Chairman of ECFiber and Governing Board delegate from Norwich. “Although 400 Mbps is currently the fastest speed we offer, we hope to be able to continue to provide these institutions the fastest speed we offer in the future.  We hope to provide 1 Gigabit per second speeds within one year.” 

Grants are from the Vermont Department of Public Services Connectivity Initiative and will help to connect even more schools and libraries.

ECFiber Seeks New Business Model Designation

ECFiber hopes to transform its business model in order to attract investors, reported Valley News in February. The organization is now an "inter-local contract," an entity somewhat unique to Vermont, but seeks to change to a "telecommunications union district." Similar to a municipal utility district, the telecommunications union district is created by two or more municipalities. The new business model would not change ECFiber's governance or require financial support from local towns but officials believe it would attract more outside investors.

Last year, ECFiber announced it would expand in 2015, seeking large scale funding to help speed up deployment. Since 2008, the organization has raised over $6 million for deployment from individual investors and now serves more than 1,000 subscribers. Unfortunately, this method financing slows expansion. The results are bad for ECFiber and bad for local consumers:

“The worst thing (about ECFiber’s delay) is a lot of the people who wanted to have it weren’t able to get it right away,” said [ECFiber Treasurer John] Roy.

At this point, FairPoint, Northern New England’s provider of land-line service, is able to reach more rural areas than ECFiber with its high-speed Internet service. But, FairPoint’s speeds of up to 30 megabits per second are slower than the 400 megabits per second ECFiber’s cables can provide, said Roy.

“If we’re going to get this job done before the end of this decade, we need to step up the rate,” said [Irv] Thomae [ECFiber's Governing Board Chariman].

It would take another 17 - 18 years to deploy 1,600 miles of fiber, the ECFiber goal. If the organization can raised $40 million from larger investors, that period can be reduced to 3 - 5 years, estimated Roy.

In order to achieve the business model change, ECFiber seeks approval from the State Legislature, which will create a union district via H 353 [PDF]. Local communities served by ECFiber must also approve the measure by ballot at their Town Meetings. Thetford approved the measure in February and ECFiber officials expected other communities to follow with no surprises.

Local communities may have no problem taking care of business, but the same cannot be said for state leaders. H 353 and two others are stalled in the State Legislature's Commerce and Economic Development Committee, reports VTDigger. All three bills are designed to help advance rural broadband development but have been put on the back burner while the committee deals with other matters.

Rep. Jim Masland from Theford introduced H 353. He told Valley News that he was optimistic about passage and that "it shouldn't be controversial." Hopefully, the committee can tend to the bill quickly this session so ECFiber can continue to do its good work. Delay only benefits Fairpoint and harms consumers who want better services from a local, accountable, publicly minded network provider.

ECFiber and ValleyNet Seek Managing Director

Recently, we reported that ECFiber in Vermont plans to expand in the near future. To fund that expansion, the consortium will seek out new, larger scale funding to meet the increased demand. ValleyNet, Inc., the company that manages the FTTH network for ECFiber is now searching for a Managing Director. The full posting is listed below and can be viewed at the NTCA Rural Broadband Association Job Center.

In keeping with the community goals of the network, we found value in this particular specification:

Community Foundation: In view of the above, the MD must fully appreciate and embrace the concept of a community-owned public utility and be able to relate successfully to:  the individual towns; their governing bodies (“Select Boards”); the ECFiber Governing Board and its members; and with the citizens themselves.  Although ECFiber is required by law and constitution to be entirely self-supporting and to “pay its own way”, it is not a purely “profit-maximizing” institution.  Balancing the needs of the community with the commercial discipline required to fund all its activities without resorting to taxpayer funding sources is a basic requirement of the MD’s position. 

ECFiber Continues to Grow; Plans to Expand in 2015

In early December, the East Central Vermont Community Fiber Network (ECFiber) announced that it is once again expanding, bringing the network to 200 miles by the end of 2014. According to the press release, the network will reach into an additional 8 towns in 2015, in part due to dark fiber deployed in cooperation with the Vermont Telecommunications Authority.

From the press release:

 “We’re pleased that residents of these areas are now able to enjoy the benefits of locally grown, full time, state-of-the-art real broadband,” said Irv Thomae, Chairman of ECFiber and Governing Board delegate from Norwich.

Over 400 households have invested in the network thus far, but Thomae goes on to note that the consortium will pursue larger scale funding in 2015 in order to obtain the necessary funds to expand at a quicker pace. Currently, local investors fund the network by purchasing tax-exempt promissory notes.

Subscribership has continued to climb. Last spring, we reported on the 600th sign-up but now ECFiber is at nearly 1,000 customers. There are currently 24 member towns in the consortium. 

Burlington Sells Burlington Telecom, Continues to Operate the Network

In November, Burlington's City Council approved the much anticipated settlement with Citibank. Burlington Telecom, a nearly citywide gigabit FTTH network owned by the city, was run into the ground by a previous mayor. That Mayor's Administration hid major cost overruns from the public for years, resulting in a challenging situation for the community. In the the world of municipal broadband, this is a significant anomaly.

The City found itself owing CitiBank some $33 million with no clear path on how to pay it. After years of arguing in court, the situation is largely resolved. Early in 2014, Citibank and Burlington reached a settlement [PDF] in which the the city would pay $10.5 million and a share of BT's future value in exchange for Citibank to drop its $33 million lawsuit. The obligation will include funds contributed by the city's codefendant, McNeil, Leddy & Sheahan P.C. law firm.

BT revenues, net cash flow, and the city's insurance carrier will contribute to the city's obligation, but the lion's share will be paid for with bridge financing from a local source. Trey Pecor, a Burlington business owner, has secured funding and created Blue Water LLC. The city will transfer ownership of the network to Blue Water in exchange for $6 million and will continue to lease the network from Blue Water at about $558,500 per year for a maximum period of five years. The goal is to find a partner to purchase the network. At that time, Blue Water and the city will divide any proceeds from the sale. 

As part of the agreement, the City Council and the Vermont Public Service Board (PSB) needed to approve the terms. The PSB is the state entity tasked with regulating utility rates and related financial matters in Vermont. On November 3rd, the PSB approved the transaction unanimously [PDF of the Order].

A Vermont Digger article reported that several organizations, including the Center for Media and Democracy, the Regional Educational Television Network and Vermont Community Access Media, requested a six month public engagement process before the deal be approved. The groups, known as Burlington Access Management Organizations (BAMOs) were concerned that a distant corporate owner that may purchase network, will not be community-minded in its decisions. The BAMOs also requested that three to five people with experience in telecom, alternative corporate structures, and public engagement, be added to the Advisory Board. From the VTDigger article:

The Public Service Board did not agree to the request. The board said it would be premature to impose conditions on a prospective sale, and that any future owner will be expected to comply with the same public access obligations the city must meet now.

“While the conditions requested by BAMOs may provide a useful mechanism to explore issues in connection with a prospective future sale of BT’s Assets, the Board declines to impose such conditions,” the PSB wrote.

Unfortunately, the PSB missed the fundamental point - the required public access obligations are quite small. Burlington Telecom, like most municipal fiber networks, went above and beyond the bare minimum required by law. The only way to ensure Burlington continues providing great customer service, high quality connections, and additional services to the community is by making it sure it is accountable to the community, not distant shareholders.

We cannot help but be disappointed at the continued pain caused by the failure of Mayor Kiss's administration to be honest with the people of Burlington - a reminder of how important transparency is for local governments.

We strongly support the efforts of local groups to ensure that when the network is next sold, it is to a locally rooted entity that will ensure the high level of service BT has delivered will continue.

The PSB did grant the city's requested reprieve from a condition that the network connect every address in Burlington. There are still approximately 3,250 addresses that BT does not reach, often in areas with underground utilities or condos where the owner is not cooperative. In order to make the system more enticing to potential buyers, the PSB removed the obligation from the utility's certificate of public good.

On November 17th, the City Council approved the settlement along with bridge financing documents, which will allow the process to move forward. The Council also decided to expand the BTAB and approved operating guidelines. WPTZ reported that there were local residents attending the council meeting who spoke out against the sale, but the Council voted to approve unanimously. From WPTZ:

"Given the circumstances that we were faced with over the past five years, this settlement is the best solution, the best possible outcome from our saga with Burlington Telecom," said Karen Paul, a Burlington city council member.

Local coverage on the City Council settlemet approval from WPTZ:

Video: 
See video

Chris Visits Burlington to Talk About Local Telecom Challenges

Burlington Telecom customers love their local muni. Throughout the community's political, legal, and financial challenges, residents and businesses have rallied behind the ability to control their access locally. As part of their efforts to educate the community, Code for BTV and Keep BT Local brought Chris to town to discuss community ownership. The video of his presentation is now available online at Burlington's Town Meeting Television.

Chris discussed a variety of community ownership and said of Burlington:

"When it comes down to getting community support to raising capital and understanding the value of a cooperative, Burlington's about the best place in the country to be trying to do that."

Keep BT Local began officially organizing in late 2012. Their goal is to transform the municipal network into a cooperative structure on order to protect local interest in the service. The gigabit network has won awards, partnered with local nonprofits to improve digital inclusion, and offered local services such as computer repair, setting it apart from the distant corporate providers with no interest in local communities.

No wonder Burlingtonians want to keep their network! This is an informative conversation that touches on a variety of topics including how to fire up potential cooperative members, strategies to entice community anchors, and promoting the unique characteristics of a local network.

The video runs about one hour and twenty minutes.