Vermont's Community-Based Broadband Solutions Get a Boost from American Rescue Plan
Thursday, October 27, 2022
Vermont's Community-Based Broadband Solutions Get a Boost from American Rescue Plan
The 2018 Vermont gubernatorial election pitted incumbent Governor Phil Scott (R-VT) against challenger Christine Hallquist (D-VT). Previous to the election, Hallquist spent 12 years as the chief executive of the Vermont Electric Cooperative, an in-state power utility that she helped to bring back from near ruin. Expanding fiber infrastructure and increasing internet access in Vermont formed a centerpiece of her campaign. Governor Scott was reelected, but—demonstrating his moderate, bipartisan approach—appointed Hallquist to be executive director of the newly formed Vermont Community Broadband Board in 2021. He realized that Hallquist was "absolutely the right person" for the job.
With bipartisan leadership, Vermont has set ambitious broadband goals:
- Bringing every currently unserved and underserved on-grid Vermont home access to 100/100 megabits per second (Mbps) broadband that can be scalable to faster speeds as demand warrants.
- Leveraging residential fiber deployments into better mobile voice coverage along key roadways and in small communities.
- Ensuring that telecommunications systems are resilient, redundant, secure, and futureproof for commercial, consumer, and public safety needs.
- Facilitating competition and choice of multiple internet service providers at the majority of premises in the state.
- Promoting local input and oversight in the direction of future use for publicly funded broadband infrastructure through empowered regional Communication Union Districts.
- Leveraging fiber broadband expansion to ensure public safety has access to reliable and redundant communications capacity.
Vermont's Digital Divide
In 2019, Vermont's Department of Public Service found that seven percent of addresses in the state did not have access to the Internet access at speeds of just 4 Mbps download and 1 Mbps upload. Nearly 20 percent of Vermont addresses lacked access at 10/1. And approximately 27 percent of Vermont addresses lacked access to 25/3 service.
In 2020, the COVID-19 public health emergency served as an accelerant to the socioeconomic disparities between the connected and the unconnected in Vermont. Vermonters who could not access or afford broadband, many of whom were geographically isolated, faced challenges with respect to distance learning; remote working; accessing telehealth services; and accessing government programs and services, including the state's institutions of democracy, such as the court system. Indeed, the ongoing public health emergency has highlighted the extent to which robust and resilient broadband networks are critical to Vermont's economic future as a whole and provide a foundation for our educational, health care, public health and safety, and democratic institutions.
In 2021, the state's 10-Year Telecommunications Plan, prepared by Rural Innovation Strategies and CTC Technology & Energy, noted that:
- 51,000 homes in Vermont were unserved or underserved (no cable or fiber to the home) and had no clear path to being served (e.g., were not funded via the Rural Digital Opportunity Fund or other federal programs). These are locations the private market is unlikely to serve in the near term without outside support. Therefore, the focus of state resources should be bringing future-proof broadband of at least 100/100 Mbps to those places, through fiber to the home.
- Approximately 185,000 premises had broadband service of 25/3 Mbps, but not infrastructure capable of 100/100 Mbps.
- While competition between broadband providers in the more densely populated areas may keep costs lower than what might be offered in a monopoly, service subsidy programs will be necessary to ensure all Vermonters have access to broadband. In addition, education programs will be needed to ensure citizens have the best practices for accessing broadband as well as broadband financial literacy training to make sure lower income households know the best options for reducing their costs while accessing the broadband services they need.
- Demand for broadband upload speeds is increasing by 20 to 30 percent each year which means that infrastructure built in the 2020s must be able to be upgraded to gigabit and even 10 gigabit symmetrical speeds in the coming decades.
In the same years, Magellan Advisors estimated that it would cost approximately $1 billion to provide 100 Mbps symmetrical service to all locations in Vermont.
The Vermont Community Broadband Board
The Vermont Community Broadband Board (VCBB) was established by Act 71 (2021), legislation relating to accelerated community broadband deployment, to coordinate, facilitate, support, and accelerate the development and implementation of universal community broadband solutions. The board develops policies and programs to accelerate community efforts that advance the state’s goal of achieving universal access to reliable, high-quality, affordable, fixed broadband achieving speeds of at least 100 Mbps symmetrical.
VCBB is housed within the Department of Public Service, which provides administrative support services. The five-member board is comprised of two members appointed by the governor with one designated to serve as chair, one appointed by the Vermont Speaker of the House, one appointed by the Vermont Senate Committee on Committees, and one appointed by the Vermont Communication Union District Association. The governor, with the advice and consent of the State Senate, appointed the initial executive director, Ms. Hallquist. Moving forward, the VCBB will make decisions on hiring and retaining the executive director. The executive director directs and supervises VCBB’s administrative affairs and technical activities in accordance with VCBB policies, including retaining or employing technical experts, other employees and contractors, and oversight of the Rural Broadband Technical Assistance Specialist.
VCBB supports community-based broadband solutions through:
- Technical and administrative support.
- Preconstruction and construction grants. (VCBB issued its first four grants—worth nearly $10 million—for detailed planning and engineering preconstruction work in November 2021.)
- Developing high-level designs (if not already completed) and business plans to assess where fiber currently exists and how the network can be expanded to ensure that everyone can be served.
- Developing more detailed designs and plans to assess what technology is needed, and at what cost, to define how the specific broadband build-outs will look.
- Advocacy, coordination, and funding assistance.
Vermont's Broadband Programs
Prior to the infusion of significant federal resources into the state in response to the COVID-19 pandemic, Vermont’s past initiatives aimed at broadband expansion have been limited in scope. Annual appropriations for sustained support in this area have been modest relative to the scale of the need. In 2019, $10.8 million of bonding capacity was made available to service providers. Over 2019-21, less than $1 million of Vermont's annual revenue was dedicated to connectivity, and less than $3 million of one-time state funding. Vermont’s eligibility for certain pre-pandemic federal opportunities was limited to areas not covered by the 2010 VTel Broadband Initiatives Program.(1) Barriers to a state-funded major initiative in this area included modest state revenue growth, legacy cost demands in the state budget, a shrinking workforce, and the need to coordinate among many different institutions and stakeholders.
During the COVID-19 pandemic, additional federal resources became available to improve broadband access and affordability. Vermont has allocated over $170 million from the general federal pandemic relief funds for broadband expansion initiatives.
Just this week, the VCBB approved three grants totaling $26.45 Million to bring broadband to more than 4,000 underserved Vermont addresses:
- $9.1 million was awarded to the Maple Broadband/Waitsfield and Champlain Valley Telecom (WCVT) partnership to expand fiber-optic broadband into parts of rural Addison County, including Bridport, Ferrisburgh, New Haven, Panton, Waltham, and Weybridge. The source of the grant funding is the American Rescue Plan Act (ARPA).
- $8.35 million was awarded to WCVT to start the first phase of its build-out to bring broadband to 1200 underserved addresses in towns that are not part of a CUD. WCVT is adding full build-out in the town of Charlotte and full build-out in the town of Bolton. WCVT will also begin partial build-out work in seven other towns.
- $9 million was awarded to Southern Vermont Communications Union District (SoVT CUD). It is partnering with Consolidated Communications to bring broadband to 6,412 addresses across southern Vermont, 1300 of which are currently underserved.
Vermont's broadband strategy focuses on funding the efforts of Communications Union Districts (CUDs), organizations of two or more towns that join together as a municipal entity to build communication infrastructure together. CUDs help aggregate demand by mixing dense and less dense towns to make projects more attractive to providers. Town boundaries become less important than roads, topography, and settlement patterns. And larger areas end up being served rather than creating digital divides with town-by-town buildouts.
The Vermont Economic Development Authority (VEDA) provides loans for startup broadband projects and expansion of existing broadband networks. Eligible project costs include working capital, construction, and infrastructure/installation. Borrowers eligible to participate include CUDs and other governmental entities, nonprofit organizations, cooperatives, and for-profit businesses. Applicants must be capable of offering broadband service speeds of at least 100 Mbps symmetrical. The maximum loan amount is $4.0 million. Financing can be provided for up to 90% of project costs.
Act 71 also created the Vermont Community Broadband Fund (VCBF) to make grants to CUDs for broadband preconstruction and construction activities; workforce training and development; a comprehensive, statewide fiber optic engineering design, and administrative expenses of grant recipients. Vermont appropriated $150 million in federal American Rescue Plan Act (ARPA) funds in fiscal year (FY) 2022 and expressed intent to make additional appropriations from federal funds in FY 2023 and FY 2024 for a total of $250 million over three years.
Vermont's programs include:
- Broadband Innovation Grants: This program helps communities conduct feasibility studies and create business plans related to the deployment of broadband in rural, unserved and underserved areas of Vermont. The program awards up to $60,000 per grant to eligible grantees including non-profit organizations, for-profit businesses, cooperatives, distribution utilities, CUDs, and other government entities. Grantees must deliver a feasibility study that proposes new broadband systems with minimum speeds of 25 Mbps download and 3 Mbps upload in unserved or underserved areas.
- Connectivity Initiative Grants: Funded by proceeds from the Vermont Universal Service Fund, Connectivity Initiative grants are awarded to internet service providers that agree to extend service to designated areas least likely to be served through the private sector or through federal programs.
- VEDA Broadband Expansion Loan Program: The Vermont Economic Development Authority (VEDA) provides loans for startup broadband projects and expansion of existing broadband networks. Eligible project costs include working capital, construction, and infrastructure/installation. Borrowers eligible to participate include Communications Union Districts and other governmental entities, nonprofit organizations, cooperatives, and for-profit businesses. Applicants must be capable of offering broadband service speeds of at least 100 Mbps symmetrical. The maximum loan amount is $4.0 million. Financing can be provided for up to 90% of project costs.
- Municipal Planning Grants: The Municipal Planning Grant (MPG) program encourages and supports planning and revitalization for local municipalities in Vermont. Awarded annually and administered by the Agency of Commerce and Community Development, the MPG program works to strengthen Vermont by funding local planning initiatives that support statewide planning goals.
- Draft Emergency Broadband Action Plan: In response to the COVID-19 pandemic, the Department of Public Service developed an Emergency Broadband Action Plan that lays out a strategy and action steps for how to get internet service to the nearly 70,000 business and residential locations, or about 23% of the state, that presently do not have access to service at or above 25/3 Mbps (the current federal definition of “broadband”).
Vermont and the Capital Projects Fund
On October 26, the U.S. Department of the Treasury announced the approval of over $90 million for broadband projects in the state of Vermont under the American Rescue Plan’s Capital Projects Fund (CPF). Vermont will use its funding to connect nearly 14,000 homes and businesses to affordable, high-speed internet. Vermont estimates the funds will connect 13,818 households and businesses—representing 22% of locations still lacking high-speed internet access.
Vermont’s award will fund the Vermont Community Broadband Construction Grant Program, a formula grant program that provides funding to communities for the construction of locally defined and prioritized broadband infrastructure projects through CUDs. The total funding amount allocated for each CUD was determined based on the percentage of road segments without existing access to high-speed wireline facilities. The Broadband Construction Grant Program is designed to provide internet service with speeds of 100/100 Mbps symmetrical to households and businesses upon project completion.
The $90 million represents 80% of the state’s total allocation under the Capital Projects Fund program. Vermont submitted plans for the remaining 20% of funds and those plans are currently under review by Treasury.
- In 2010 VTel was awarded $116 million in federal funding through grants and government-backed loans to provide statewide or nearly statewide high-speed wireless coverage. This restricted projects in VTel areas from eligibility for U.S. Department of Agriculture ReConnect funding.
The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.
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