At March town meetings in 2008, voters in 27 Central Vermont towns embraced EC Fiber’s proposal to bring a high speed communications network to their communities, many of which had little or no broadband internet service.
Legally speaking EC Fiber is set up as a municipality, with a governing board made up of delegates from the communities within its service area. EC Fiber stresses that it is community owned and controlled. As its Website explains, “once the system is completely built, revenues can be used to reduce costs, improve speeds, or be given back to the towns.”
The Town Meeting votes, along with pre-subscription commitments from more than 1500 people were important to the organization as it prepared to drum up capital from financial institutions and other large investors.
“If we can come with a long list of people who pre-subscribe, that’s a strong indication to the investors that the demand is real,” then chairman Tim Nulty told VPR.
The timing couldn’t have been much worse. The credit crisis hit only a few months later dashing EC Fiber’s hopes of raising capital. The situation isn’t much different today.
“The problem that we’re faced with is that banking and financial houses are still suffering from being risk averse because of the credit crisis, so they’re shut off to us,” current EC Fiber chairman Loredo Sola told me recently.
Despite the commitments from would-be subscribers, without a proven track record EC Fiber also faced greater difficulties accessing capital than established service providers.
The same held true for grants.
When Springfield based Vermont Telephone Company beat EC Fiber out for $116 million dollars in federal stimulus grants and loans to expand broadband using a high speed wireless system, Sola said it was a mistake to invest in such a system.
SoverNet Communications also received federal and state help with its FiberConnect project, which links more than 300 ‘anchor institutions ‘in Vermont. This month the project finished the first 100 miles of an 821 mile network slated for completion a year from now.
Speaking wih VPR’s Susan Keese about that plan Sola said, “You need to connect to all the homes and businesses in the community in order to stimulate community wide economic growth, rather than just a few businesses that are already served by existing carriers.”
More recently Fairpoint’s decision, under an agreement with the state, to bring DSL broadband to some communities in EC Fiber’s service area means EC Fiber can’t receive state grants to provide service in those towns.
In towns it wants to serve, EC Fiber has many devoted fans who support the organization’s commitment to bringing fiber technology to every residence and its grassroots character. These people have sustained the project in lieu of money from large investors and government grants, through the purchase of $2500 promissory notes. In this way EC Fiber has raised $2.3 million.
EC Fiber currently serves 200 customers in Barnard with another 50 signed up for service.
“The network today is self-sustaining, it will generate profit and grow,” Sola says. But with only these individual investments, he says the growth will be very slow and ultimately may not extend to the 23 communities currently in EC Fiber’s service area.
“We’re getting to the point where I think that we have tapped most of the local investors at least in some of the towns where we’re actively building out [Barnard, Vershire and Chelsea] and that’s not enough to get the whole job done,” says Sola.