ECFiber, a community-based fiber-to-home broadband provider, says it will go to the bond market in hopes of rapidly expanding service in the 24 central Vermont towns it serves.
Since it made its first connection in 2011, ECFiber has built about 250 miles of the roughly 1,300 miles needed to fully serve member towns. About 1,200 customers are currently connected.
In the fall of 2008, when it was first established, ECFiber was poised to secure up to $70 million in financing, but one week later the markets collapsed.
To sustain itself and build its fiber-optic network, ECFiber turned to small investments from residents in the towns it serves.
Now Chairman Irv Thomae says ECFiber will go to the bond market in order to raise enough capital to increase the rate of expansion tenfold.
“We have been able to finance between 25 and 40 miles a year with local funding,” says Thomae.
“We’d like to step up our build by almost an order of magnitude. We’d like to build at least 250 miles in 2017.”
Thomae would not say how much capital ECFiber is attempting to raise. He says until now the gradual build out has been one street or neighborhood at a time.
“That’s inefficient,” says Thomae. “We can build a network across a larger area more efficiently if we can lay out a whole town at a time.”
ECFiber estimates its costs $30,000 for each mile of fiber. Thomae says the provider has a proven track record that should attract potential investors.
“We have our boots on the ground. We have cable on the poles, and we have a substantial revenue stream from these 1,200 customers.”
ECFiber was first created as an "interlocal contract" between member communities, but a law passed last year by the legislature enabled towns to form telecommunications districts.
Last year, after votes by member towns, ECFiber became the state’s first such entity.
The move did not change the relationship with the towns, but Thomae says the telecommunications district concept is more understandable to potential investors.
ECFiber has no taxing ability nor are member towns liable for its debts.
Thomae says ECFiber is determining which towns to build out first by inviting residents in each community to go to its website and pre-subscribe.
(This story was revised to clarify that ECFiber became a telecommunications district last year, not on Jan. 1, 2016.)