Vanu CoverageCo, the financially-troubled provider of cell phone service to 26 rural Vermont towns, has until Monday to show state regulators that it has as plan for staying in business.
June Tierney, commissioner of the Public Service Department, sent a blistering email last week to Richard Biby, the former CoverageCo executive and telecommunications engineer who was rehired by the company’s investors to help in its recovery effort, saying the department has been waiting since Apr. 2 for CoverageCo to come up with a plan.
If the company fails to meet the Monday deadline, the state may consider finding another company to take its place, she said.
“Given the passage of time since April 2nd, when the Department first made clear to you its expectation that you would provide a business plan for review, it is becoming increasingly untenable for the Department to further delay issuing a request for proposal to identify any potential successor operator for the system,” Tierney wrote on Tuesday. The email was obtained by VTDigger on Friday.
“Accordingly, I would ask that you provide the Department with your proposed business plan by close of business on Monday, April 23. Please include in your plan a specific list of CoverageCo’s creditors, as well as a detailed account of the specific actions taken to date to address CoverageCo’s outstanding debts and to continue its accounts,” Tierney said.
When it launched in Vermont six years ago, CoverageCo was greeted with excitement, particularly in rural parts of the state chronically lacking in cell service. The plan was to expand cell coverage, and emergency calls, using “microcell” technology — small, low-powered antennas placed along roadsides that provided the missing link between callers and cell service providers.
Among the beneficiaries of expanded cell service was the only Vermont hospital still without it, Grace Cottage Hospital in Townsend.
With about 160 antennas in place, CoverageCo started having trouble covering expenses, including the cost of providing electricity to the antennas, the cost of linking to the “backhaul” phone networks that form the backbone of modern communications system, and the $50-per-antenna monthly fee to link to Vermont’s Enhanced 911 emergency calling system.
VTDigger first reported on the company’s troubles in March.
In her email to Biby, Tierney zeroed in on the company’s unpaid bills, including money owed for backhaul service to the dominant regional landline phone company, FairPoint Communications, recently acquired by Consolidated Communications.
“I am told that, as of this writing, you have not contacted Consolidated/FairPoint, who I understand to be CoverageCo’s largest backhaul provider,” Tierney wrote. “This lack of communication is troubling to us, given the sizeable arrearages CoverageCo has with Consolidated/FairPoint. As I noted in my email of April 8, robust communication is needed in this situation.”
Biby said in an interview on Saturday that he has been in touch with FairPoint/Consolidated “at a high level,” since April 2.
“There are a lot of things to do and there has only been so much bandwidth to address everything,” he said, referring to his efforts in the last three weeks.
Asked whether he meet Tierney’s Monday deadline, Biby said, “I’m not sure that’s entirely realistic on that time frame.”
Among CoverageCo’s challenges is that while it has been able to link calls for customers who subscribe to Verizon Wireless, Sprint and T-Mobile, it had not been able to work out a similar arrangement with another major carrier, AT&T. Biby said he would like the state’s help in reaching out to AT&T. He also has asked for the state’s help in covering the cost of linking the antennas to the 911 system.
Tierney said before the state would consider any such concessions, “It would help to see Mr. Biby’s business case.”
Stephen Whitaker, a longtime critic of the way state government has handled telecommunications development, said in an interview that some of the fault for CoverageCo’s troubles rests with the Public Service Department.
Whitaker said the state could have addressed some of the challenges CoverageCo is facing, with better planning and encouraging public participation.
Tierney said in response that she is “satisfied that the department is more than meeting its legal obligations for planning, and especially with regard to issuing the telecommunications plan.”
If the state did issue a new request for proposals, Whitaker said other companies may not leap at the chance to pick up the pieces left by CoverageCo.
“There is no quick and simple solution that’s going to give us as much coverage as CoverageCo does now, and there’s no affordable evolution that’s going to be the safety net and fill the dead zones” where without CoverageCo, there’s no cell service, Whitaker said.
