ECFiber Has Support of Selectboards in 24 Vermont Towns

February 8, 2008
White River Junction, Vermont

East Central Vermont Community Fiber Network ("ECFiber") announced today that it has the support of selectboards in 24 towns in east central Vermont, ranging from Windsor to Montpelier, to place the following non-binding resolution on their town meeting ballots:

Shall the Town of (………) pursue executing an Interlocal Contract with other municipalities under Title 24 of the Vermont Statutes Annotated Section 4901, for the purpose of establishing a universal, open-access, financially self-sustaining broadband communications system to provide communications services, including high-speed internet, telephone and cable television, to the residents, businesses and institutions of these towns?

Currently Participating Towns:

The ECFiber communications system will be a community-owned, universally available, open access, fiber-to-the home network covering 100% of the homes, businesses, and institutions in participating communities. The network will be privately financed, without any direct financial support from participating municipalities. Burlington, Vermont began building out such a system two years ago and is close to covering the entire city. In its initial service areas, the Burlington network has seen 40% of households taking its services.

ValleyNet, the non-profit 501-c(3) that first brought local dial-up internet access to the Upper Valley, has formed a new ValleyFiber division specifically to organize such efforts and is financing the estimated startup and organizational expenses of close to $350,000. ValleyNet announced in October that it had engaged Tim Nulty, the founder and former director of the Burlington effort, to manage this effort in the Upper Valley. A large part of ValleyNet's non-profit mission has been to advocate for universal and effective Internet access.

After town meeting, towns wishing to participate will sign the Interlocal Contract referred to in the warrant article and then ECFiber (the towns acting collectively) will pursue raising non-recourse municipal capital lease financing from private financial institutions.

Financial risk to towns is minimized, because, unlike a municipal bond, which pledges the full faith and credit of the issuer, a capital lease is backed ONLY by revenue from the project being financed. Certain provisions of Vermont law also limit town expenditures related to the operation of telecommunications systems and explicitly state that a capital lease is not to be considered a debt of the town. After the capital lease is repaid, any excess revenues from the system would flow back to ECFiber towns.

When financing terms are known in the fall of 2008, each town will need to make a commitment to either remain in the Interlocal Contract group or withdraw with no penalty. ECFiber will contract with ValleyFiber to design, build and operate the network. ValleyFiber will then begin the detailed design of the network and begin the buildout in 2009 with the first customers receiving service in the fourth quarter of 2009. For towns wishing to join this effort at a later date, there will be a mechanism in place to allow this at slightly less attractive terms.

Tim Nulty, ValleyFiber project manager stated, "The network will provide 100 megabit per second connection speeds between all users on the network; users will be able to purchase connection speeds of up to 100 megabits per second to the Internet, depending on their needs. All connections will be symmetrical, with upload speeds as fast as download. In addition to Internet, users will be able to purchase high quality telephone service and multi-channel television services at competitive rates."

Tim concludes, "Future bandwidth demands will almost certainly require a fiber connection to every home." Educause (a higher education information technology association) recently issued a study (http://www.educause.edu/ir/library/pdf/EPO0801.pdf) which highlights the primary causes of increasing bandwidth demands and the superior upgradeability of fiber-to-the-home technology in meeting those needs. A particularly apt paragraph states, "Recent history can help. Twelve years ago, in 1995, most home users accessed the Internet with dial-up modems at speeds of 28 kilobits per second (Kbps), or 28,000 bits. Today, most cable modem providers and some DSL providers offer 3–10 megabit (3–10 million bit) downstream service—a more than one hundredfold increase in capacity, representing a doubling every 18 months. In other words, Moore's Law applies to network technologies as well as circuit boards. If this trend continues, the demand for 3 megabit speeds today would grow to 384 megabits in 10 years and well over a gigabit in 13 years." It continues, "Given the unsurpassed bandwidth capability of fiber, FTTH [fiber to the home] gives the service provider the flexibility to upgrade the system in the future to provide higher bandwidth with little or no change to the overall architecture." A Brookings Institute study (http://www.brookings.edu/~/media/Files/rc/reports/2007/06labor_crandall/200706litan.pdf) finds that, "YouTube currently consumes as much bandwidth as the entire Internet required in 2000, while users upload 65,000 videos and download a staggering 100 million videos every day," and highlights the economic development benefits of such infrastructure investment, saying, "…for every one percentage point increase in broadband penetration in a state, employment is projected to increase by 0.2 to 0.3 percent per year."

Stephen Willbanks, chairman of the Strafford select board, which has been an early proponent of the project stated, "Strafford has been trying to improve internet connectivity for its citizens for several years. A state-supported town project to build a wireless solution was not fully satisfactory. The ECFiber solution meets our needs by requiring no direct financial support, yet provides ubiquitous coverage and a fiber network that is capable of providing maximum Internet connection speeds for years to come. The selectboard believes this network will also serve to attract young families to Strafford, counteracting the decline in school enrollment we have experienced over the past years."

The headquarters and network "hub" will be located in White River Junction, Vermont due to the proximity of important complementary telecommunications infrastructure. Hunter Rieseberg, Hartford town manager, said, "Even though Hartford has pretty fair coverage of both cable modem and DSL Internet service, we still need to ensure some form of broadband access for unserved areas of our town. Additionally, we believe that the universal availability and the higher speeds offered by this broadband network will serve to attract both small and large businesses to our towns."

The signing into law last June of the Vermont Act 79 and the subsequent formation of the Vermont Telecom Authority ("VTA") signaled the commitment that the state has made to Governor Douglas' laudable and aggressive goal of ubiquitous broadband and cellular coverage by the end of 2010. In February, ECFiber made a formal presentation to the VTA, which has indicated its strong support for this effort. ECFiber is working closely with the authority and other state agencies to arrange an innovative form of financial support for the project. Mary Evslin, Chairman of the VTA Board added, "Innovative and grass roots efforts such as this one demonstrate the need and urgency for broadband services to Vermonters. The Vermont Telecommunications Authority very much supports these types of initiatives and looks forward to working with the management team of ECFiber and the participating municipalities to determine how best the VTA can support the project and turn vision into reality."

There is already strong local support for the ECFiber services. Nearly 1,000 households and businesses in the 24 towns have pre-registered for service, including over 15% of the households in such poorly served towns as Strafford, Chelsea, Granville, and Thetford. The board chair of ValleyNet, Stan Williams, stated, "We are not surprised by the grassroots support for this service – Vermonters like to buy local. People are not only frustrated by the lack of internet connectivity, but customers of many services (telephone, cable TV, heating oil, electricity, etc.) are tired of being forced to navigate complex phone menus or web pages just to ask a question. Many of us remember true customer service, when you could call - and speak to - a local customer service representative who would solve your problem. And that is exactly what ECFiber will provide, along with the local jobs that go with it. When ValleyNet was actively managing nearly 6,000 local dial-up Internet access accounts in the Upper Valley, our customers appreciated our strong commitment to personalized, localize customer service."

A series of information meetings and selectboard presentations were held last year in most participating towns. More information meetings are being held over the next several weeks in many towns in the area to help residents find out more about the project and the upcoming warrant article vote – details are available online at www.ECFiber.net. Citizens of participating towns are urged to attend these meetings and/or go to the www.ECFiber.net for more information and to pre-register for service.