ECFiber Update May 2008

ECFiber and all of its supporters have three reasons to celebrate at the beginning of May, 2008!

• ECFiber had its first full organizational meeting on Monday, April 21st, with official delegates from the ECFiber towns presenting signed Interlocal Contracts that established the venture as a legal entity. An Executive Committee of delegates was elected, by-laws were adopted, and a committee structure for carrying the project forward in association with ValleyNet, its non-profit operating partner, was established.

ECFiber now can begin the process of negotiating with representatives of private capital markets with a final prospectus in hand, and has already received encouragement from a number of interested investors. It's expected that, given the turmoil in the financial markets, securing financing for the project will be a much longer process than would have been the case a year ago. However, ECFiber's board and advisors are confident that it will secure the municipal capital lease financing upon which its business model is based, with the continued and growing grassroots support that has made this project possible.

• ECFiber has received a ringing endorsement from Atlantic Engineering Group (AEG), one of the foremost design/build telecommunications engineering firms in the country. They've successfully built 65 Fiber-to-the-Premises networks including 16 municipally-owned projects. AEG has signed a letter of intent with ECFiber for a fixed price construction contract covering 75% of the projected capital expenditure. AEG reviewed the ECFiber's business model and financial projections, and stated that the company "...considers the ECFiber network design to be sound and has tested the ValleyNet cost figures using its own proprietary pricing models … and has concluded that ValleyNet's figures … are reasonable and achievable. AEG believes that the execution schedule…is reasonable and will commit to meet that schedule."

This is great news. This agreement with AEG will provide a significant degree of comfort to the financial community by essentially eliminating the timing and cost over-run risks associated with a project of this magnitude. A large portion of the project's costs can be fixed well in advance, and the financial community can be assured of the support of a large experienced engineering firm for the project.

• Finally, the Vermont Telecommunications Authority (VTA) has made a $25,000 planning grant to ECFiber to assist in its preliminary engineering work for the fiber network that will connect the ECFiber towns. Recent newspaper reports have indicated that applications made by ECFiber for large grant financing were turned down by the Vermont agency; to the contrary, ECfiber had expressed willingness to accept any sum, no matter how small, from the Vermont agency, as a means to demonstrate to the financial community the state's financial support of the project (ECFiber had earlier received a letter of moral support from the agency). As the application process continued, the Vermont agency announced the position that it would only fund projects with near-AAA credit rating, and ECFiber withdrew its request for funding support, since no start-up venture can meet that standard. The financial community understands this. In awarding ECFiber the $25,000 planning grant, the VTA stated that "The ECFiber application meets all the Broadband Grant goals."

The Vermont Telecommunications Authority holds regular meetings which are open to the public, and which are also available to the public via telephone link (so that you can participate via a telephone connection). Their website with all of their meeting information is at www.telecomvt.org.

• We're still very actively collecting pre-registrations for television, telephone, and Internet service, both online at www.ecfiber.net/pre-register and in person. The more pre-registrations we can collect before the final financing negotiations, the more the projects funders will understand the high level of community support for the project. We have pre-registrations from almost 14% of the households in the ECFiber towns, and are actively working to increase that percentage.

For more information, for details on how to pre-register for service, or to find out how you can help ECFiber, visit the ECFiber website at www.ecfiber.net or write to info@ecfiber.net.

The ECFiber Executive Committee

Loredo Sola, Chair (Pomfret)
Andy Hooper, Vice-chair (Montpelier)
Jim Masland (Thetford)
Steve Willbanks (Strafford)
Janet Zug (Tunbridge)