The Daily Yonder

Jan 12, 2022

Broadband Funding: ‘It’s Like History Repeating Itself in a Good Way

New England states prepare to invest millions of federal dollars to support broadband expansions.

A new federal infusion of broadband funding could spark a variety of effective responses for getting more New Englanders connected via high-speed internet, says a nonprofit leader working on community-focused internet initiatives.

Sean Gonsalves with the Institute for Local Self Reliance (ILSR) Community Broadband Networks Initiative likened the recent federal infusion of broadband funds to rural electrification in the 1900s. “It’s like history repeating itself in a good way,” Gonsalves said.

In 2021 (which Gonsalves calls “a banner year for broadband”), the American Rescue Act Plan provided $350 billion for water, sewer, and broadband with another $10 billion earmarked primarily for broadband via the Capital Funds Project. In the fall, an additional $65 billion was allocated as part of the new infrastructure bill.

In rural parts of New England, where many are unserved or underserved by monopoly providers, a variety of broadband models have taken shape even before now. Many more are predicted to gain momentum with this latest financial boost.

“In New Hampshire, what’s kind of the rage there are these public/private partnerships, particularly with Consolidated,” Gonsalves said. Consolidated Communications is the state’s largest phone company, and it remains the only non-satellite option for internet in several counties.

In New Hampshire, according to BroadBandNow, just over 30% of residents have access to fiber, a factor that hinders population and economic growth. In an effort to improve the connectivity issue, New Hampshire passed a bill in 2018 enabling municipalities to issue bonds for publicly owned internet network infrastructure.

The town of Chesterfield was the first to put the new legislation into action, partnering with Consolidated to build a fiber-to-premises network to all homes and businesses. Consolidated possessed an existing lease on the utility poles, allowing for easier implementation. The arrangement, a first in New Hampshire, also entailed no property tax increase. Instead, a capped service fee was agreed upon to pay back the bond.

However, Chesterfield agreed to transfer ownership of the fiber network to Consolidated after the town retires the bond in 20 years, relinquishing local control. Dozens of other New Hampshire towns have since signed similar public-private broadband agreements with Consolidated, but they have opted for alternative ownership arrangements, including lease renewal and the ability to seek out new providers.

“It’s too early to tell how this will shake out in terms of Consolidated partnering with these various towns,” Gonsalves said. But for now, many last-mile communities are tapping into unprecedented connectivity speeds as a result.

In contrast to New Hampshire’s town-by-town approach, Vermont’s government has taken a regional strategy. “In Vermont we like what we’re seeing, which is the Communications Union Districts,” Gonsalves said. These CUDs enable two or more towns to come together to build communication infrastructure.

As of November 2021, 199 Vermont municipalities belonged to one or more CUDs. However, few are already providing internet; most are still in the planning and funding stages. Lawmakers estimate that approximately 60,000 households statewide lack decent internet, but that number is likely much higher. In many places where customers are supposedly receiving 25-3 (25 mbps download and 3 mbps upload—the threshold to qualify as broadband), oftentimes, those numbers aren’t actually being met.

Gonsalves called Vermont’s CUD approach “promising” as municipal broadband networks give “the maximum level of accountability and community input.” However, the timeline to reach high-speed connectivity can be daunting, as illustrated by the efforts of WiredWest, a Massachusetts cooperative that has been fighting for internet accessibility in the state’s western hill towns since 2011.

Jim Drawe, executive director of WiredWest said lack of broadband meant fewer young people wanted to live in the community.

“I was a selectman in my town for 18 years, and what I noticed is that the audience in front of me in every town meeting was getting older an older.” Towns like his weren’t seeing any newcomers, and one reason was non-existent connectivity.

“We were in a situation that was unique because there was no competition, so people were very hungry for good, reliable internet service,” Drawe said. But all the incumbent providers turned down requests to build networks due to low population density.

To shift the course, Drawe and a group of locals spent years lobbying and raising money. The organization even invested funds in a lawyer to investigate existing avenues that could be leveraged. “Massachusetts has a unique set of laws that allows municipalities to build their own Municipal Light Plants (MLPs),” Drawe said. Over time, the law, which dated back to early electrification, was modified to run cable TV and telecommunications services.

Capitalizing on that precedent, WiredWest partnered with Westfield Gas & Electric, another MLP, to bring high-speed internet to its six member towns. Their cooperative model reduced overhead and risk, as well as provided technical and financial advantages to members.

While most member towns are up and running, the largest won’t see construction finished until 2023. “Everybody in the country is building networks, so there’s a shortage of crews that are technically qualified,” Drawe said. The other major hindrance is permission and collaboration with the utilities.

In the case of these towns, Drawe said, “You have to pay Verizon to go out to every single pole and move their wire down to make room.” The task has taken years to accomplish.

Drawe also noted that the new wires are often too heavy for the outdated poles, and each pole that needs to be replaced means additional time and money. “You can’t approach this project on a cost-benefit analysis,” he said. “You have to approach it as a town-owned utility, just like a road.”

In Maine, Andrew Butcher, the incoming appointee for the state’s brand-new Maine Connectivity Authority (MCA), is looking ahead at how this utility will serve the state. Developed in 2021 through bipartisan legislation, MCA was designed to be proactive and strategic in authorizing, assisting, and funding connectivity initiatives throughout the state.

Maine has received enormous federal broadband funding that will result in a total input of $250-400 million. “We absolutely need to be focusing on connecting people that aren’t connected, because in our modern day and age that’s, of course, unacceptable,” Butcher said. But he wants to do better than a binary view.

“Maine, like many other rural states, has an opportunity to be proactive about thinking about digital infrastructure for the future,” Butcher said. “Our reliance will only increase.” While this includes physical infrastructure, he’s also focused on key elements like affordability and technological literacy.

Right now, he said the agency is “in hyperdrive.” They’ve been developing an organizational structure, branding, a communication portal, and a strategic summary to act as a short-term roadmap. MCA will use the structure of the federal funding applications to guide their program designs, working to fund a pipeline of projects.

“In January, we hope to have an announcement of what the size and scale and mechanism will look like,” he said. Strategic partnerships and collaborations, especially on a regional scale will be essential. However, Butcher said, “There are some structural barriers.” In terms of current policy, he views Maine as somewhere between Massachusetts and Vermont.

But there is precedent for good things to happen. For instance, the towns of Calais and Baileyville have already formed their own community broadband utility and funded it with $3 million in commercial loans. In 2022, all households there can opt into high-speed internet. For towns just getting started, an important question will continue to be who will own the infrastructure, oftentimes a compromise tied to how quickly it can be implemented.

“I think one thing that we’ve certainly learned is that the power of multi-organizational, multisector collaboration is really, really rich,” Butcher said. “It’s an exciting time for working in connectivity.”