Implementing Vermont’s Communications Union District Strategy
This was written in May 2020, prior to the passage of the first COVID Relief Fund package, and at a point in time when only 3 CUDs had actually formed.
Introduction
In 2018, it became apparent to state leadership that ECFiber’s model for getting world class, future-proof internet into the state’s unserved and underserved areas worked. During the 2019 legislative session, state law was modified to encourage the development of CUDs in other areas of the state.
The federal response to the COVID-19 pandemic is likely to make available new financial resources. Vermont’s CUDs need to dramatically accelerate the planning and deployment of their networks. This will maximize the likelihood of receiving these funds.
Fiber-to-the-Premises: How it’s done
An FTTP network is easy to understand. Fiber optic cables are attached to utility poles carrying electricity, telephone, and other wires. Every few poles there is a junction box where individual fiber optic strands can be accessed. Individual homes or businesses get a fiber optic line using one of these strands, and a box on the exterior of the building connects to the inside wiring in the house, usually a short fiber run to a fiber optic modem. Like the phone company, there is a distribution hub serving townwide areas; and ultimately there are one or more central hubs connected to one or more of the internet “backbone” services.
It’s not hard to design – if you know where all the poles are.
It’s not hard to put the wires on the poles – if the pole owners have given you permission and you have paid them and paid anyone who needs to move wires to make room for your wires. And you have ready access to people who know how to do this work and the equipment, such as bucket trucks, they need to do the work.
It’s not hard to string wiring over railroad tracks or interstates – so long as you’ve allowed for a year or more for the paperwork to get done.
You’ll spend about $1400 in labor and equipment to connect each individual premise, and can’t expect the customer to pay that up front.
Plus, you need a paid team managing all this work; a paid team working on signing up customers and getting them up and running and troubleshooting issues that arise; a paid team managing your accounting and finances.
Strategy Acceleration: Change the Tactics
FTTP is a straightforward business. It is capital intensive at the start; the typical CUD will spend about $4 million before the first dollar of revenue comes in. Vermont’s CUD strategy recognizes this and puts resources of that dimension on the table for CUDs.
The strategy contemplates these tactics: a year or so of feasibility studies followed by data collection and network design, with construction starting sometime in year 2 at best, with the CUDs becoming self-sustaining by year 4 or 5, and the final buildouts being completed by 2028.
This will be a full 20 years after the 2008 Town Meeting Day votes by towns in east central Vermont to sign a joint contract to build FTTP networks in their towns – the birth of ECFiber.
Can this strategy be accelerated? Yes. Vermont has already decided it wants FTTP built out in unserved and underserved areas of the state, operated under the auspices of communications union districts. It has already committed to backing up to $4 million per CUD to get them launched – a $20MM to $30MM commitment.
A change in tactics is what is required now, not a change in strategy. We know that we need to collect pole data for the network designers. This will mean one or more people hiring or contracting for this work, managing it on a day to day basis, driving it forward. Putting aside the original tactics of feasibility studies, design grants and loans, commit to funding whatever plan for getting this work started the CUDs come up with in the next 60 days, preferably less.
Commit immediate workforce development funding to CCV and programs such as the HATC to begin training people in the art of pole data collection, pole make-ready and installation, fiber optic cable splicing, bucket truck operations, and field operations management by mid-July.
Provide funding to back purchase orders for fiber optic cable now, as deliveries are not likely until early winter 2021.
Provide funding to CUDs to create a unified bidding entity for the RDOF auction in the fall, and to create detailed cost estimates for completing a statewide buildout in their towns and in likely future participating towns by 2024.
In other words, cast aside the careful, step-by-step, incremental approach and start doing the practical work that must be done. In this way, the work becomes “shovel-ready” and far more likely to be eligible for federal infrastructure monies.
If the state is prepared to adopt these tactics, the CUDs are prepared to work together to accelerate the design of their networks. This means, for example, a statewide pole data collection effort but not necessarily a statewide design effort, although multi-CUD design efforts are probable. The goal is to be building networks by this time next year.
Conclusion
The state leadership is correct in defining speeds of 100/100 as the minimum standard for state support of broadband build out in Vermont. The strategy for accomplishing delivery of this service standard by encouraging the creation communication union districts and backing their initial capital requirements is correct. To respond to the cavernous disparities illuminated by the COVID-19 pandemic, only tactics need to change. Money needs to be made available immediately, and spent quickly.