Lawmakers are perplexed by an amendment to the telecommunications bill that would allow municipalities to create telecommunications districts.
The Senate Committee on Government Operations will take testimony Tuesday from stakeholders on whether the state should have a formal recognition for “telecom union districts” as an amendment to H.117.
Sen. Jeanette White, D-Windham, said Thursday that she doesn’t understand the purpose of creating a telecommunications district. But her committee plans to hear testimony from Karen Horn of the Vermont League of Cities and Towns, Jim Porter of the Department of Public Service and Beth Fastiggi of FairPoint.
Under the proposed amendment to H.117, telecommunications districts would be similar to water districts and fire districts. They would make money through running Internet cable to homes and charging monthly fees for Internet services.
According to testimony from Charles Larkin, a retired engineer for the Department of Public Service, running the fiber cables costs ECFiber about $30,000 per mile, and it takes about four years to break even on the investment through monthly fees.
Under the proposed governance model, districts would not be allowed to levy taxes to fund their districts. Irv Thomae, chairman of the board of ECFiber, said his nonprofit company strongly agrees with not being able to levy taxes.
Thomae said getting the distinction this year would help his 24-member nonprofit entity, which is currently governed by an “interlocal contract,” secure multimillion dollar loans from investors.
ECFiber currently issues promissory notes in $2,500 increments, and its average loan package is about $7,500, according to John Roy, treasurer of ECFiber.
Thomae said this week he hopes to “blaze a trail” so other towns in Vermont can provide high-speed Internet to residents, in a similar way that water districts provide water.
In the meantime, broadband Internet is on its way to being formally regulated by the federal government as a utility, much like the landline telephone industry.
