When the Covid-19 pandemic hit last year, Carrie Stahler quickly realized that her slow DSL internet connection was no longer going to cut it. The connection wasn’t strong enough for her two children to attend remote school and for her to work at the same time.
But Stahler has few options for internet service at her rural home in Lyndon.
Like many Vermonters who lacked good internet connection during the pandemic, she often had to leave her house for a better connection: sitting in her in-laws’ driveway or the parking lot of a coworking space in Lyndonville to get work done.
Eventually she bought an extra cell phone so her family could use it as an additional internet hotspot, allowing two family members to join different meetings at once.
“But with the DSL you could hardly ever show your face (on video) because there was no upload speed,” said Stahler, who is the director of community engagement at Green Mountain United Way. “It was kind of comical, and it’s kind of become a little bit of a joke in my office.”
Recently, Stahler’s family started getting internet service through Starlink, a new satellite internet service offered by SpaceX. She called it a “workable,” temporary solution, but it’s expensive — $100 a month, plus a $500 initial investment in equipment — and still occasionally cuts out.
For a long-term solution to her internet woes, Stahler is banking on a new hope: communications union districts, or CUDs.
She’s not alone. Policymakers are also eyeing CUDs on behalf of some 60,000 Vermonters who, like Stahler, struggle to get online. These community-owned, fiber-optic networks serving multiple towns are regarded as the linchpin to building broadband to “the last mile,” the colloquialism for rural parts of the state that lack adequate internet service.
Now, because of a windfall of federal Covid-19 relief dollars Vermont is slated to receive, the state’s CUDs and other internet providers could soon be building out to Stahler and thousands of other addresses throughout the state.
But questions remain about how to spend the money and to what extent communications union districts can stand on their own or should partner with private companies.
Vermont is expected to receive $2.7 billion in federal funds from the American Rescue Plan Act, including $1.25 billion that state officials have flexibility to spend in response to the pandemic.
Gov. Phil Scott and Democratic leaders have pledged to spend a sizable portion of these funds on broadband buildout. Earlier this month, the governor proposed dedicating $250 million for broadband over the next four years.
A bill that passed the House in March would harness $150 million of the new federal funds to help CUDs lead the way on building out to the last mile. Under the legislation, the districts could apply for grants and loans to help them design and build fiber-optic networks.
The Senate is considering a broader approach to broadband buildout, in which funding would also be given directly to private sector internet providers and others to help expand internet connectivity.
“For years, we’ve said that what we need is just a big chunk of change that we can finally invest to get everyone connected,” Senate President Pro Tempore Becca Balint, D-Windham, said earlier this month. “And now it seems like we might actually have the resources we need to close this digital divide in Vermont.”
Are CUDs the solution?
Many policymakers believe CUDs are uniquely poised to help the state solve its rural broadband crisis because they operate under a different business model than private internet providers. CUDs are dedicated to expanding broadband to remote areas as opposed to building out in profitable, more densely populated regions.
So far, 200 of Vermont’s 246 municipalities have become part of nine communications union districts.
Christine Hallquist is the administrator of NEK Community Broadband, a communications union district in the Northeast Kingdom, and Lamoille Fibernet, a CUD in Lamoille County. Based on her own analysis, she said, cable internet providers typically are not interested in serving fewer than 20 addresses per mile.
That’s compared to the average of 6.5 customers per mile on the rural routes Hallquist has been developing.
“If you look at the goals of the incumbent and for-profit telecommunication companies, they by definition have to make a profit,” Hallquist said. “So that goes totally contrary to the goal of serving every address because at some point, it’s not profitable.”
While private internet companies would not receive direct funding under the bill passed by the House in March, communications union districts would be strongly encouraged to work with those companies to expand broadband service.
Through public-private partnerships, the districts and internet providers can team up to build out and operate the networks.
Hallquist said her CUDs are eyeing collaborations with private providers. In particular, she’s envisioning scenarios in which private providers lease the districts’ fiber networks while providing the actual connections and support services to customers.
“That’s the strength of the local (internet service provider): They know how to do customer support. I would hate to have to build up an organization to do end customer support, and I don’t think we have to,” she said.
Under the legislation passed by the House, the loans and grants for internet expansion would be approved and handled by a newly created Vermont Community Broadband Authority.
The authority’s job would be to coordinate broadband buildout throughout the state and provide technical assistance to the CUDs as they lead the charge on internet expansion.
But some are envisioning a different approach to broadband buildout. The Senate has taken up the House’s bill and is expected to make changes to it this week.
Sen. Ann Cummings, D-Washington, who chairs the Senate Finance Committee, said she expects her chamber’s approach to broadband funding will be “a little broader” than the House’s, and that she’s “probably more willing to look at working with existing carriers than some other folks.”
She said last week that the committee is considering giving private internet providers funds to expand service.
Cummings said an “ongoing tension” in the broadband discussion is whether to support communications union districts in cases in which existing internet companies may be able to provide service faster, even if it might be of lower quality.
Under the House’s bill, CUDs would be required to provide a higher internet speed of 100 megabits per second download time and 100 Mbps upload time (referred to as 100/100) to all the customers they serve.
But the federal government still defines 25/3 Mbps as the slowest internet service speed that qualifies as broadband.
“Are we going to say ‘OK, your traditional carrier, your for-profit, will get you 25/3 out there this year, but we’re going to support your CUD and they aren’t going to get it out to you for three years?’” Cumming said. “Do you tell people you can’t get less than perfect service, and you have to wait for three years when your kids need to go to school now?”
How will private providers fit in?
Sen. Randy Brock, R-Franklin, proposed his own bill that would be more flexible about who could receive funding to expand internet service.
Under his plan, a reconstituted Vermont Telecommunications Authority would have the ability to lend funds to the private broadband providers in addition to the communications union districts. (A previous authority, established by former governor Jim Douglas, went dormant in 2014.)
“Our goal ought not to be the focus on propping up the CUDs. Our goal ought to be getting broadband to everybody in the most cost-effective and fastest manner,” Brock said.
“I think CUDs will play and should play, and are likely to play, a very important role in doing that, but not the only role,” he said.
Communications union districts are not located in all regions of the state, Brock said, adding that “there’s a big hole in leaving out” the small internet providers from funding opportunities.
He pointed to providers such as the Franklin Telephone Company, “which have been very successful in rolling out broadband almost through their entire territories on a shoestring.”
Michael Birnbaum is the CEO of Kingdom Fiber, a small internet service provider in the Northeast Kingdom. In a letter to legislators this month, he said it’s “easy to say that private providers failed” at providing universal broadband. And he said “that conclusion can fairly be applied” to the national internet providers, but not the small ones.
“The national providers soiled the bath, and now I fear that (the) political CUD tide is going to toss the independent, community-based providers out with the bathwater,” he said.
In an interview, Birnbaum said he wants the CUDs to succeed but also believes that “there shouldn’t be a one-size-fits-all approach” to broadband buildout. In some cases, private providers should be able to directly receive some of the federal dollars, he said.
Birnbaum said he is in discussions with CUDs about potential partnerships, but in his letter, he said that if the “gate-keeping” of federal dollars is “concentrated with the CUDs, there may be less attractive arrangements for those of us with a lot of expertise, experience, and desire to serve.”
Ultimately, Birnbaum argues, it could make it hard for small internet providers, including his own, to stay in business.
Rep. Laura Sibilia, I-Dover, who helped craft the House’s broadband bill, is opposed to giving the federal funding directly to private internet providers. She said these companies have been the “biggest barrier” to expanding internet coverage in Vermont.
“We can’t make them do it. They are regulated by the market, and we have had very little ability to incentivize, penalize, require — whatever the case might be — these private providers to build out,” Sibilia said.
Communications union districts, on the other hand, are “literally Vermonters that have been appointed by their towns to come together to ensure the job gets done,” she said. With an opportunity to make “a once-in-a lifetime investment” in broadband, the state needs accountability for its dollars, she argues.
“We can’t make the providers go to the end of the road, but we know that the CUDs are going to make sure their neighbors get covered,” Sibilia said.
The governor has put millions of dollars on the table for broadband expansion, but so far, he has stayed out of the debate over what Vermont’s internet expansion should look like.
June Tierney, commissioner of the Vermont Department of Public Service, which regulates telecommunications, said the governor’s plan doesn’t endorse any particular approach to broadband buildout. Instead, the funding is “designed to be agnostic” and conform to what lawmakers ultimately approve this session.
But Tierney said that Scott is comfortable with the CUDs “quarterbacking this last mile build-out.”
She said “it makes a world of sense” to direct the federal funding toward the CUDs, which the state has worked to stand up in recent years.
“And then ideally, those CUDs will find a working relationship at least in some scenarios, with those incumbent internet service providers,” Tierney said.
She said she believes that the private sector should be collaborating with CUDs on building out to the last mile.
“I just don’t think it’s too big of an ask or lift to say to a company like Franklin Telephone, or to a Consolidated, or to a Comcast for that matter, ‘If you want to use this money you need to be talking to these CUDs,’” Tierney said.
Can CUDs get the job done?
Steve Whitaker, a citizen advocate focused on telecommunications, believes that directing millions of federal dollars toward the CUDs will result in a “train wreck.” He argues that CUDS lack the staff and expertise to get the job done.
“How do you design, build? How do you execute contracts? How do you adhere to public records law? How do you integrate your design with CUDs halfway across the state, or all the way across the state, all with volunteer, inexperienced people?” Whitaker said.
But Sibilia argues that the House’s proposal is “following a model that works and that’s in Vermont.”
She points to ECFiber, the state’s largest CUD, which serves more than 30 communities in the east-central region of the state and provides service to 5,000 customers.
Proponents of CUDs also argue that they won’t be left to do the job alone. In addition to partnerships with the private sector, they’ll be able to draw on resources and assistance from an entity like the House’s proposed Vermont Community Broadband Authority.
“They can be successful as long as you’ve got a strong central agency like the (Vermont Community Broadband Authority) that provides the technical support and help,” Hallquist said.
“You can’t just throw a bunch of money at CUDs and expect them to carry out a program in three or four years without having technical support,” she added.
For Stahler in Lyndon, Hallquist’s CUD, NEK Community Broadband, seems to be her only hope for a better internet connection. There’s “no reason” an internet service provider would run a line up to her house, she said.
“The broadband line stops about a mile away, and without something like a CUD where it’s working like a public utility that has to serve every address, we’ll never get broadband,” she said. “We’ll be reliant on satellites forevermore.”
