Under New FCC Standard, 30 Percent Of Vermonters Now Lack Broadband

Feb 3, 2015

Last week, the Federal Communications Commission significantly raised the bar on what constitutes high speed broadband. In doing so, it created an even greater challenge to delivering broadband to rural customers, including those in Vermont.

The old definition of broadband set a standard of 4 megabits per second (Mbps) download and an upload speed of 1 Mbps, or 4/1. The standard approved last week by the FCC is a significant jump – to speeds of 25 Mbps down and 3 up, or 25/3.

Vermont Telecommunications Director Jim Porter says about 70 percent of Vermont addresses have speeds that already meet the new standard.

They get their broadband from cable companies and fiber to home providers like VTel, Burlington Telecom and ECFiber.

Many of the remaining 30 percent, with speeds below the new standard, are customers of FairPoint Communications, which provides DSL service in the state’s most rural areas.

"Interestingly, I think 25/3 effectively takes DSL out of being classified as being broadband." - State Telecom Director Jim Porter

“Interestingly I think 25/3 effectively takes DSL out of being classified as being broadband,” Porter says.

FairPoint says the company has technology that supports the higher speeds, but says the cost to deliver it can be "prohibitively high."

The company says, “In many cases, financial support is required to serve remote parts of the state … and the FCC, while laudably increasing the speed for its definition of broadband, has not addressed in any way, how it will provide the funding necessary.”

It’s unclear whether an extensive wireless broadband system being deployed by Springfield-based VTel under a federal grant could deliver consistent 25/3 speeds.

A demonstration of the project last summer logged download speeds of 35 Mbps, but distance and terrain have an effect on the service.

At the time, VTel said average speeds are in the 15 to 20 Mbps range, but company president Michel Guite says advances in wireless technology promise much higher speeds.

"In many cases, financial support is required to serve remote parts of the state ... and the FCC, while laudably increasing the speed for its definition of broadband, has not addressed in any way how it will provide the funding necessary." - FairPoint Communications

Porter says as the standard climbs, the expense of meeting it goes up as well, and if DSL is no longer considered broadband, then the cost really takes off.

“It’ll probably be about 50 percent more expansive to provide 10/1 than 4/1.  When you move that speed to 25/3, you’ve really got a whole new ball game,” says Porter.

The reality is about 20 percent of Vermont addresses don’t have service that even meets the old standard.

The state’s new 10-year Telecommunications Plan envisions first getting underserved locations up to speeds of 10/1. 

This week the Department of Public Service began soliciting proposals from broadband providers who want to apply for roughly $1 million raised under legislation passed last year. The money comes from the state Universal Service Fund charge tacked onto telephone bills and telecommunications services.

Under the law, the money must be used to achieve broadband speeds of at least 4/1 at underserved addresses, although Porter says proposals to provide higher speeds are given added weight.

Where the funding will come from to provide the higher speed of 25/3 speeds is a big question, because there is no federal funding set aside to meet that standard.  

The biggest chunk of federal broadband funding requires only that broadband providers meet lower speeds of 10/1.  

Last year, the Legislature set a long term goal of universal 100/100 Mbps speeds by 2024, which would essentially require a statewide fiber-to-home network. Currently there is no clear funding source available for reaching the goal.

The money, which is part of the Connect America Fund, is available initially to Price Cap Carriers, which means in Vermont, FairPoint will likely receive the funding.

Last week’s decision by the FCC could be followed by an even more momentous one later this month.

As part of the commission’s net neutrality deliberations, there are indications it could move to reclassify Internet service in such a way that states could begin to regulate it like a public utility. 

Depending on the specifics of such a move, Porter says if it happens, that change could create a new source of funding for broadband improvements.

“One of the things that would come along with that is the ability to assess a universal service fee on broadband services,” he says. “If that happens, the money might be there to fund these higher speeds.”

Last year, the Legislature set a long term goal of universal 100/100 Mbps speeds by 2024, which would essentially require a statewide fiber-to-home network.

Currently there is no clear funding source available for reaching the goal. Last month, President Obama promised more support for community broadband efforts to reach the goal nationwide.

In Vermont, ECFiber, a community owned network funded by small investors, says similar projects could be one solution to meeting Vermont’s goal.