Area sees new effort to boost broadband
ADDISON COUNTY — Addison County residents in rural areas could see a new source of affordable, robust broadband internet service in the not-too-distant future.
Selectboards in Ferrisburgh, Leicester, New Haven, Monkton and Salisbury recently voted to form Vermont’s latest Communications Union District, a nonprofit inter-municipal corporation that can work to bring broadband to rural areas, combining user fees, bonds and grants — but no taxpayer funding — to pay for it.
And once two or more towns in a county have established a Communications Union District — or, fittingly for this dairy-rich area, a CUD — additional towns can sign on, according to Adam Lougee, the Addison County Regional Planning Commission executive director.
An emergency COVID-19 amendment to CUD legislation the Vermont Legislature passed earlier this year allowed town selectboards to bypass a longer approval process. Lougee then helped convince boards in those five towns to sign on before that provision sunset on July 15.
One key to his sales pitch was no taxpayer money was at risk, and another was that wider broadband availability is an economic generator — and often a necessity if students and parents must work from home and more medical appointments are conducted remotely.
Lougee said the regional planning commission last week was awarded a $60,000 Vermont Department of Public Service grant to help develop an Addison County CUD, in part because of an overwhelming number of letters of support from rural areas.
“I got 50, 60, maybe 70 letters of support from individuals and business and organizations in Addison County saying, hey, I live in Waltham, I operate my business, and my kids are trying to use it for school, and people are streaming stuff, and we just can’t do it off our existing service,” Lougee said. “And we would really like you to expand the speed and the fiber in our area.”
CUDs are not new — Addison County towns Hancock and Granville are already in the state’s oldest and largest CUD, East Central Fiber (EC Fiber). Founded in 2011, EC Fiber serves 26 towns in territory that runs east to Hartford and south to Woodstock.
There are seven Vermont CUDS, eight counting Addison County’s. They range from one town to 26, one was formed in the Barre-Montpelier area in 2018 with 18 towns, another in Newbury in 2017, and the other four just this year, from Bennington to the Northeast Kingdom.
Lougee cites EC Fiber as the most established and effective, and is happy to say Valley Net, which helps operate that system, is serving as a business consultant for the Addison County effort.
“They’ve been amazingly successful,” he said. “East Central Fiber figured out the financial model to make it work.”
Lougee added the rugged terrain in much of EC Fiber’s territory poses at least as much of challenge as Addison County’s geography, making him even more optimistic about a CUD based here.
“If you look at where East Central Fiber is, it is at least as rural as we are, and probably more mountainous than a lot of Addison County,” he said. “And they’ve made it work.”
Essentially CUDs operate in the same manner as other cooperative, inter-municipal districts, such as water or solid waste districts.
Enabling legislation created a board to be run by one representative from each town, and the board can hire employees.
As well as providing communications services, the board can buy or sell property, contract for professional services, create budgets, establish capital and reserve funds, and “enter into financing agreements … authorizing the pledge of net revenue, or alternative means of financing capital improvements and operations.”
A CUD “shall not accept funds generated by a member’s taxing or assessment power,” and “shall not have the power to levy, assess, apportion, or collect any tax upon property within the district, nor upon any of its members.”
Or, as Lougee put it, “It will be the operating entity, for the lack of a better term. So, yes, it’s got to go out and find funding. It could be a combination of grants and loans based on the income stream from the houses signing on. So grants, loans, hook-up fees, but no taxpayer money.”
OUT OF THE GATE
The first steps will be an organizational meeting to draw up by-laws, which can be based on existing templates, and the use of the $60,000 grant for a combination business plan/feasibility study.
The grant went to the regional planning commission, but it is essentially a pass-through to the CUD, Lougee said.
“Basically, when we do the feasibility study and then start to create the business plan, the CUD is the entity that would implement that business plan,” he said.
One factor should help control costs for residents, Lougee said.
“One of the reasons that large portions of Addison County don’t have good service is that we’re a relatively small, rural population. And some of the bigger existing carriers have chosen to invest their capital in other places, where they think they’re going to get a larger rate of return. A CUD is basically a single-purpose nonprofit,” Lougee said.
“So the rate of return on the capital the CUD invests doesn’t have to be as great. The mission is the service. It’s not making X amount of profit and returning it to the shareholders.”
The business plan will include reaching out to existing internet providers to determine their plans. The new CUD will then look to areas that are not on current drawing boards, and the plan will in part be learning what it will cost to run fiber along routes companies don’t plan to serve, and how much income doing so would generate.
If there is a difference between the two figures that can’t be supported through bonding, the CUD would look for grant support.
“It’s going to cost us X amount to run that fiber, so we’ve got to go to the bonding markets and raise capital, work with grants, or see some CARES Act money,” Lougee said, revering to the federal COVID-19 relief law. “Then we’ve got to work, basically, to sign people on.”
And sign more towns on, although it’s not yet clear moving forward whether Town Meeting Day votes will be necessary, or whether selectboards can sign up a town on its own.
But regardless, Lougee said, “Once it’s created anybody can join by a vote.”