[A]fter months of back-and-forth, Vermont has terminated its partnership with rural cell service CoverageCo, leaving thousands of people without cell service until the state finds a new company to step in and revitalize a microcell network that has already cost the government millions.
June Tierney, commissioner of the state Department of Public Service, sent lawmakers a letter Thursday informing them of the decision.
“After giving CoverageCo a fair opportunity to demonstrate its ability to meet its contractual obligations to the state, I made the decision to terminate our master lease agreements with CoverageCo,” she wrote. “On August 22nd, I sent CoverageCo notices terminating the three master lease agreements with the company.”
Companies have until the end of September to apply for the contract to replace CoverageCo, and will be expected to begin operating by the end of November.
Until then, the 26 rural communities that relied on CoverageCo for their cell service — and motorists traveling rural highways and backroads — will need to use landlines or keep driving. If those landlines stop working, many people will be unable to make emergency calls from these areas, an issue that has been of particular concern to residents and policymakers.
“We are mindful of the impact that a lack of cell service has on our most rural communities,” Tierney wrote in her letter. “We anticipate having a vendor in place as soon as possible.”
The state has set aside $900,000 to use to complete building out the network, which will be part of the deal with the new company.
CoverageCo’s financial woes emerged as an imminent problem in the middle of this past legislative session, after months of financial struggles.
Lawmakers passed legislation in May appropriating $100,000 to help the company remain viable. At the same time, AT&T, whose decision not to partner with CoverageCo had been cited as a reason for its failure, announced that it would begin using the system.
“I’m so ecstatic I’m having a nice IPA,” Richard Biby, CoverageCo’s CEO, said of the news on May 1. “We’re a lot better than we were yesterday or on Friday.”
But apparently that boost wasn’t enough to save CoverageCo. Consolidated Communications, the state’s largest landline carrier, cut off CoverageCo’s service to its network in late May. The state denied an emergency petition to reverse that decision.
Biby could not be reached for comment Thursday.
Some felt like the decision to pull the plug came too late.
“We’ve had a problem pretty much all summer long,” said Rep. Laura Sibilia, I-Dover, a member of the House Committee on Energy and Technology who lives in an area that relies on the service.
“I was not happy that it has taken this long to pull the plug,” she added. “This was something we could see coming. I’m happy it has finally been terminated.”
The question now is whether the state can find another firm that wants the contract, and is able to do the job. The microcell service was a joint venture between the state and CoverageCo that began in 2012. The equipment belongs to the state.
There is a 60-day period between when the contract is terminated and when it officially expires. Then Vermont can lease the equipment, installed in 160 locations across the state, to a new company. While it is possible that CoverageCo could convince the DPS to change its mind, there is little optimism of that happening.
“I do get a sense that there is a breach between the two organizations,” said Sen. Randy Brock, R-Franklin, who helped draft the bill to give CoverageCo more time to come up with a plan to save itself.
“It’s very disappointing, and the fact that CoverageCo did not seem to be able to provide the sort of business plan the Public Service Department requested and asked for a few times is very disappointing,” Brock added.
The senator said the DPS also shouldered some of the blame for the lapse, and should have already prepared a contingency plan if CoverageCo failed. He said he hopes the department will keep an open mind over the next two months if the company makes a good-faith attempt to fix its business plan and address the state’s concerns.
“The big issue right now to me is the 911 service,” he added. “Where there is a void … those calls can’t be made and that should be a concern to all of us.”
Vermont’s Enhanced 911 board reported that in 2017, 804 emergency calls in Vermont were made through CoverageCo, up from 763 in 2016.
Clay Purvis, director of the DPS’ telecommunications and connectivity division, said the decision to terminate the lease agreements would hardly make things worse, as CoverageCo’s service was already down in many of the places where it was once operating.
Purvis said that AT&T and other mobile service providers have plugged some gaps left by CoverageCo’s struggles, such as at the Grace Cottage Hospital in Townshend, but that the department was not certain exactly how many of the firm’s locations were still operating.
“We have done drive tests to inspect sites, and last time the vast majority were already done, before we terminated the contract,” Purvis said.
“If the site is not working and that is your only cell service in that area, you cannot make a call until that is restored or until someone else comes and restores in that area,” he added.
The communities that relied on the coverage are: Canaan, Norton, Brighton, Wolcott, Groton, Ryegate, Topsham, Washington, Roxbury, Granville, Ripton, Middlebury, Hancock, Chelsea, Vershire, Fairlee, Strafford, Thetford, Wilmington, Whitingham, Halifax, Readsboro, Woodstock, Townsend, Newfane, and Jamaica.
AT&T’s decision not to buy into CoverageCo’s service was one of the main reasons cited by the company for its failure to become viable. The other was that the volume of calls using its micro-cells simply failed to meet expectations.
The company made money by charging mobile providers each time its technology was used to make calls by their users. Its microcells acted as a bridge between existing coverage areas and isolated rural areas that fall outside those zones.
Sibelia said she believes that there is a way to make the network profitable, particularly with the nearly $1 million available to upgrade the system.
“There’s small-cell technology that’s available to fill in holes like these villages…. I’ve heard from a number of companies, some are a little more out there than others in terms of things they’d like to try,” she said. “I think it is possible.”
