Broadband Focus Shifting To Need For Speed

Feb 21, 2014

A public hearing on interactive television Friday will give Vermonters a chance to weigh in on a new state telecommunications plan being prepared by the Department Of Public Service.

The new plan comes at a time when the focus on broadband in Vermont is shifting from providing access to meeting future needs with higher speed service.

Eighty years ago, the Communications Act of 1934 made universal land line phone service a priority. Today, as the demand for broadband and mobile wireless service increases, so has the government’s emphasis on making those services universally available.

“From my perspective, the plan for all of these services would be that everybody in the state have access to every service. I think that’s always the ultimate goal,” says Jim Porter, telecommunications director at the Department Of Public Service.  He says the goal needs to be balanced with the cost of reaching it.

Porter says the state has made great strides in broadband and cellular coverage. The new plan will take stock of that, but also anticipate future needs.

According to the state, in the near future all but a handful of Vermonters will have access to broadband. That’s based on a federally financed survey of Vermont providers whose service meets download of speeds 768 kilobits per second and upload speeds of 200 kbps or greater.

Porter says the new telecommunications plan will set a benchmark that is four times faster: 4 megabits down and 1 megabit up. He says 77 percent of Vermonters already have speeds of 4/1 or greater.

The remaining 23 percent of Vermont households with broadband speeds lower than the benchmark are typically rural customers. They’re on the slow speed side of a digital divide that’s growing as use of mobile and fixed broadband continues to climb.

"If we can't embark upon that journey for the entire state and every citizen and every business, what would we continue to do? The legislature hasn't asked itself that question in a long time." - Sen. Tim Ashe

In light of that, legislators are asking the question: Once we reach universal broadband coverage, then what?

Chittenden County Senator Tim Ashe, who chairs the Senate Finance Committee, says it’s beyond the state’s ability to pay for the infrastructure necessary to provide universal broadband at higher speeds.

“We have to say, ‘If we can’t embark upon that journey for the entire state and every citizen and every business, what would we continue to do?'" Ashe says. "The legislature hasn’t asked itself that question in a long time. It’s been years.”

It’s taken a lot of money to get broadband to Vermonters.

More than $177 million came from the federal government as part of post-recession stimulus spending. Broadband providers also invested in their own infrastructure. And the state has spent more than $13 million. At the moment there is no significant state or federal money on the horizon to meet future broadband needs.

That reality is one reason behind a proposal in a draft bill in Ashe’s committee that does away with the Vermont Telecommunications Authority.

The VTA was established by the legislature in 2007 and has been in charge of developing projects and dispersing state money to expand broadband and cell phone service in the most underserved areas.

The most recent appropriation of grant money to the VTA was in the fiscal year ending last July, although the authority says projects it funded are still being developed and deployed.

Ashe says if the VTA no longer has funds for projects, it no longer makes sense for the state to spend money just to keep it operating.

“I will confess that unless we identify a source of funds for new infrastructure, a $700,000-a-year operating budget is a lot of money for no tangible product,” he says.

Ashe’s committee’s draft bill would replace the VTA with a Division of Connectivity in the Department of Economic Development.

The new division would have a staff of three, compared to the VTA’s current staff of 10. The VTA says 50 percent of personnel costs are currently paid by federal grants or capital project funding.

The Shumlin Administration supports the idea and believes the change will enhance efforts to improve telecommunications service.

West Glover Representative Sam Young, who serves on the authority’s board, says if the state wants all Vermonters to have access to robust broadband and mobile services, it will take more public money and Vermont will continue to need the VTA’s knowledge and experience. 

“I think that we need to invest more money and get it out there to rural Vermont,” says Young.

“I think that the VTA is a good organization and it’s taken a lot of time to get it up and running and have good relationships with the companies. I think its time that we doubled down. Expand the mission, change the goals and continue.”

"I think that we need to invest more money and get it out there to rural Vermont." - Rep. Sam Young

Young serves on the House Committee on Commerce and Economic Development, which is considering a bill that could be a source of state funding for future improvements to broadband.

The bill would increase the state universal service charge that is added to Vermonters’ phone bills.

The money collected from the charge currently goes into the Vermont Universal Service Fund. It is used for Emergency 911 services and to provide phone service to low income Vermonters and those with hearing and speech disabilities.

Under the House bill, some money from the fund would be paid directly to land line telephone companies and could be used to expand and improve their broadband services.

These companies, called Incumbent Local Exchange Carriers (ILECs), are the backbone of the universal telephone service envisioned in the 1934 Communications Act.

The question the house bill raises is whether the Universal Service Fund can be used to help expand and improve broadband.

“But to do so contemplates raising the Universal Service Fund rate and whenever you raise any rate, there’s always a challenge. I can’t say at this moment exactly where the support does or does not lie for doing so,” says Pownal Representative Bill Botzow who chairs the House committee.

Botzow says his committee hasn’t yet taken testimony on the bill. He agrees improved broadband should be a statewide priority.

“I do think that for a state like Vermont that believes in small communities and a working landscape, we’re going to need broadband to take advantage of that asset,” Botzow says.

Ironically, the impetus for the bill before Botzow’s committee was not broadband, but old-fashioned land line telephone service.

Reduced federal support for landline service and the loss of business to wireless companies is putting enormous strain on Vermont companies that do landline business.

It's estimated 30 percent of Vermont households no longer have land line telephones.

A report prepared for the Public Service Department in January concludes that Vermont’s ILEC  companies will likely show losses of about $40 million dollars in 2013 and will continue to lose money in coming years.

According to the report, “If events match our estimates, the future of telecommunications in Vermont is likely to be turbulent. The possibility of a financial failure by an ILEC is particularly troublesome because neither state nor federal law explains clearly how state or federal officials would protect customers and other carriers during and after that event.”

Botzow says in the push to improve wireless and broadband the state can’t lose sight of the importance of universal land line phone service.

“I think when people pick up the phone they expect to be able to communicate. Right now all we’re worrying about is basically how fast can you communicate,” he says.

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The Vermont Telecommunications Plan public hearing will be held from 6 to 8 p.m. on Friday, Feb. 21 at these Vermont Interactive Technologies locations:

BENNINGTON: Senior Citizen's Service Center, 124 Pleasant St. 

BRATTLEBORO: Brattleboro Union High School, 131 Fairground Rd, Room 125 

JOHNSON:  Johnson State College, Bentley Hall Room 211 

LYNDONVILLE: 1001 College Road, Lyndon State College 

MIDDLEBURY: 51 Charles Ave, Hannaford Career Center, 2nd Floor 

MONTPELIER: Vermont Department of Labor, 5 Green Mountain Drive 

NEWPORT: North Country Union High School, 209 Veterans Ave. 

RANDOLPH: Vermont Technical College, Morrill Hall, Randolph Center 

RUTLAND:  Stafford Technical Center, 8 Stratton Rd., Room 108  

SPRINGFIELD: Howard Dean Education Center, 307 South Street, 2nd Floor 

ST. ALBANS: Bellows Free Academy, 4 Hospital Drive 

WHITE RIVER JCT: Community College of Vermont, 145 Billings Farm Rd, CCV Upper Valley 

WILLISTON: 451 Lawrence Road