Is VTel Committed To Bringing Internet To Unserved Vermonters?

May 6, 2016

A wireless system built by Springfield-based VTel and largely paid for with federal money is supposed to provide Internet to virtually all of the state’s unserved addresses. But there are questions about whether the company is meeting that commitment.

The head of VTel told lawmakers last week that the company’s Wireless Open World system was never intended to provide Internet access to "all unserved households" in Vermont.

“A misunderstanding somehow has occurred over the years about our project, is that the idea has been widely accepted that we had promised to serve absolutely every home in Vermont that did not have service. VTel never committed to serve all unserved households,” company president Michel Guite told the House Commerce Committee.

VTel’s 2010 application for $116 million in federal grants and loans said the system would serve “all of the 33,165 unserved households in Vermont ... comprising virtually 100 percent of Vermont’s unserved population.”

In 2010, when the federal award to VTel from the RUS – Rural Utilities Service – was announced, Sen. Bernie Sanders held a public forum to explain what the project would do.

"For years and years there has been discussion about the need for universal broadband, for every person in this rural state to get access to broadband,” Sanders told Guite. “Will you make a commitment to the people of the state of Vermont that that is exactly what you're going to do?”

Guite told Sanders his company would do that.

"VTel never committed to serve all unserved households." - Michel Guite, VTel president

Guite told VPR that he sees no contradiction between statements made in 2010 and what he said to lawmakers last week.

He says any unserved addresses the company is not reaching with its wireless network are few and far between and simply too expensive to provide with service. He made that point at the 2010 meeting.

“Will there be examples of somebody who is behind a concrete wall or somehow unreachable? The nature of wireless is that it’s not perfect, I wish it was,” he said, as some in the audience groaned.

Officials say they understand a very small number of addresses may fall into that category, but they believe VTel may be far short of its promise to reach virtually all unserved addresses.

In a letter to the RUS administrator, the state’s congressional delegation asks why, six months after the agency said the project was completed, they’re hearing that it's only available in a few areas.

According to the letter, the delegation has long had concerns that VTel is retreating from the promise to reach virtually all unserved addresses.

VTel's 2010 application for $116 million in federal grants and loans, including funds from the American Recovery and Reinvestment Act (AARA) said the system would serve "all of the 33,165 unserved households in Vermont ... comprising virtually 100 percent of Vermont’s unserved population."
Credit Department of Public Service

State auditor Doug Hoffer is looking into the matter, and legislators have also asked the RUS to audit VTel.

“There’s no question in my mind that they are not meeting that promise,” says West Dover Rep. Laura Sibilia, who serves on the House Commerce Committee and co-sponsored a House resolution calling for an audit.

Sibilia says residents of her area have been waiting a long time for VTel’s wireless service – and they’re still waiting.

Guite says in terms of coverage and functionality, the wireless network has far exceeded the goals set for it.

He says the system currently covers at least 95 percent of Vermont using more than 150 towers and other sites. He said the problem may be that people are simply unaware the service is available.

West Dover Rep. Laura Sibilia says residents of her area have been waiting a long time for VTel's wireless service - and they're still waiting.

“Most people in Vermont are getting signals from at least two sites,” Guite told lawmakers.

Guite says 1,200 people are currently using VTel’s wireless service. Legislators wondered why the number is so small if the coverage is so extensive. They asked him why the company isn’t doing more to promote its service.

“We have a different sort of a view … we kind of like to keep our mouth shut,” he responded.

The state has asked VTel to give it specific addresses served by the wireless system so it can determine who is still unserved.

The company has provided general information, but Guite says he is reluctant to give the state address-by-address data because wireless providers such as Verizon and AT&T don’t.

If VTel is falling short of the promise it made to reach all unserved addresses, it's bad news for the state's long-overdue promise to get to universal coverage for Internet service.

“AT&T and Verizon have provided us with data when we’ve asked them for it,” says Jim Porter of the Department of Public Service.

Porter says as a wireless Internet service provider, VTel is in a different category than the other companies that primarily provide cell service.

State law says the Department of Public Service can require companies to provide data, but so far Porter has not compelled VTel to do so. He says that’s because federal law limits state jurisdiction over Internet services. 

If VTel is falling short of the promise it made to reach all unserved addresses, it’s bad news for the state’s long-overdue promise to get to universal coverage for Internet service.

Vtel’s system was supposed to fill in the remaining gaps in coverage and get the state to that goal. Porter says there are more Internet options today than there were when VTel started its project.

"Until we get the data from VTel indicating where they're providing service, and more importantly where they don't, we just don't know." - Jim Porter, Department of Public Service.

“The impact will not be as serious as it would have been five years ago," he says. "But until we get the data from VTel indicating where they’re providing service, and more importantly where they don’t, we just don’t know."

Porter says towns within the area VTel is supposed to cover are putting together lists of addresses that don’t have service.

In a letter to legislative leaders, Guite characterized legislative resolutions calling for an audit as malicious and baseless and the result of "misguided and misinformed rhetoric.”  

In an email, a spokesperson for the RUS said the agency is reviewing the requests to audit VTel and the company is also subject to regularly scheduled audits every few years.

"VTel has met its obligations with the Rural Utilities Service with respect to the project," the spokesperson said. "They have constructed their network in accordance with their award application and the financial agreement."