Vermont Utilities and ISPs Prepare for Federal Broadband Aid

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Bidding begins on the FCC’s Rural Digital Opportunity Fund Phase I Auction on October 29, and Vermont is preparing by forming coalitions of electric utilities, community-based internet service providers and national partners. According to Vermont Public Radio (VPR), the players include Green Mountain Power, Kingdom Fiber, electric co-ops, and “communications union districts” – municipal organizations that towns formed to build out infrastructure together. 

The Rural Digital Opportunity Fund was announced in February with $16 billion available for the first round of a reverse auction. FCC procedures were adopted last month and applications were accepted through July 15, Inside Towers reported. The process involves potential carriers making lower and lower bids for federal subsidies needed to provide high speed service and basic telephone service. 

Some 70,000 addresses in Vermont currently do not have high speed internet. June Tierney, commissioner of the Department of Public Service, said the involvement of the state’s electric utilities is a major development in the effort to provide broadband in Vermont. 

NPR reported Vermont previously looked at the possibility of electric utilities providing broadband to the last mile. According to a feasibility study delivered to the legislature in January, the effort would cost almost $300 million, but would be more cost-effective if utilities partnered with existing internet ventures.

“We got the results that we did, which were that it would be a significant capital investment for utilities to do that [broadband buildout],” she said. “And I think that gave people pause. And I think the next thought was ‘well, what else can we do?’ And that’s how the energy built” for utilities to look at the possibility of winning the needed federal funds. 

Speaking of the strict FCC anti-collusion rules that went into effect on July 16, Michael Birnbaum of Kingdom Fiber said, “We’re not allowed to say whether we will bid. We’re not allowed to say what state we’re going to bid in under the prohibited communications rules the FCC has put out. I can just say that those in our consortium have common goals and a common purpose and that we’re going to seek consensus and that something good will come out of it.” 

Involved in the effort with Kingdom Fiber, a local internet service provider, is Washington Electric Co-op, Vermont Electric Co-op, two communications union districts, and the National Rural telecommunications Cooperative. 

Birnbaum said the money won’t flow into Vermont until 2022, if it comes at all. “So for people who are thinking this is an imminent thing, it’s not,” he said. “But it involves an awful lot of planning and it’s a tremendous opportunity for Vermont, if we can succeed.”

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