Towns Asked To Join
Fiber Optic Utility
By John Freitag

An ambitious plan to create a community-owned fiber optic network in central Vermont will be voted on at town meetings next Tuesday throughout the region covered by the Herald.

Supporters of East-Central Vermont Community Fiber Network (ECFiberNet) have placed articles or will bring up from the floor motions asking each town to enter an "Interlocal Contract" with other municipalities "for the establishment of a universal, open-access, financially self-sustaining broadband communications system to provide communication services including high-speed Internet, telephone, and cable television to the residents, businesses, and institutions of these towns."

The plan is to use existing telephone poles to string fiber optic cable past every house and business in each town that approves the contract. Each home or business that subscribes could then be connected to the system.

The reason that towns are being asked to be involved is due in part to the structuring of the initial debt. The project will be funded by a capital lease, and initially the network will be owned by a leasing company which in turn would lease the network to the towns.

With municipalities involved in this manner, private investors could have their investments be tax-free, which would lower their cost to provide the infrastructure. Supporters also say that, in the long run, a community-owned system would not need to generate the profit margins expected by a private firm.

The need for a certain amount of profit is one of the reasons this relatively low-population-density area has not attracted private firms to provide these services.

The population density is in fact borderline in terms of the ultimate success of the project. According to the ECFiberNet website, the financial model requires a minimum density of 12 houses per mile, and among the current set of towns, that density is just 12.2.

Other factors that will come into play are the initial subscription rate and service participation. Interested individuals have been asked to go to the ECFiberNet website and pre-register for the service by clicking on a link. According to John Lutz of Randolph, Randolph's representative on the committee, some 1119 people in the 24 target towns, or 5% of the households, have already signed up.

Good Reception

ECFiberNet has been holding meetings in most of the individual towns over the last several weeks, to explain the project and solicit support. In most cases the reception has been extremely positive.

Some towns have asked tough questions at the meetings—including the Bethel selectboard. Bethel Town Manager Dell Cloud emphasized this week, however, that he and his board are "very supportive" of the ECFiberNet resolution.

"We encourage people to give this a chance," Cloud said, while noting that Tuesday's vote won't bind the town to anything, because there is as yet no contract to sign.

The risks to the participating towns are very slight according to Paul Giuliani, the ECFiberNet attorney. In emails, he affirmed that "all risks in this undertaking rest with the investors" and "at no time will non-subscibers be responsible for any costs."

According to the ECFiberNet website, www.ecfiber.net, in the event of a worse case scenario "the agreements are structured so that towns will not be required to repay the lease," Giuliani said. However, he noted, such an event could impact their credit ratings. He asserted that even this impact would be minimal, stating, there may be "embarrassment" involved "but not the type of default or repudiation that has long-lasting negative credit implications."

According to Steven Jeffrey, director of the Vermont League of Cities and Towns, there has been no independent legal review of the contract by town attorneys or lawyers in his organization. He however expressed complete confidence in Giuliani and reffered to him "as the gold standard of people that are involved in municpal government and the law."

Another key person involved in this project is Tim Nulty, the founder and former CEO of Burlington Telecom, a successful municipally-owned fibernet established in Burlington that is being used as model for this project. He is now working for Valley Net out of White River Junction to bring the ECFiberNet project to fruition.

Valley Net Board Chair Stan Williams was asked if an amendment to the standard FiberNet articles at Town Meeting might resolve some concerns about town liability.

"I don't think an amendment from the floor is something that we would encourage or contemplate," he responded. "Of course anything is possible at any of these meetings.

"We expect the resoulutions to pass overwhelmingly as is," he concluded.

"We are very excited about the upcoming Town Meeting vote," said Janet Zug of Tunbridge, who has worked on publicity for the organizing committee. "Our network will offer very high-quality digital television, telephone and ultra high-speed Internet service to 100% of homes and businesses in participating towns. There will be no cost to the towns and no bonds issued.

"The towns will receive property-tax-equivalent payments from the network and eventual profits," she said. "The network will be owned by the towns, funded by the subscribers, and operated locally. This means high-quality local jobs and high-quality local service.

"All that is needed for each town to join in this effort is a "Yea" vote at Town Meeting."