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August 08, 2010


Yeah, wow!

Last week we learned that Vermont Telephone Company (Vtel) was awarded an $81 million federal grant and $35 million loan for its Wireless Open World (WOW) last mile broadband infrastructure project; Vtel will add $30 million of its own equity. It's hard to overstate the significance of this project, particularly in the context of the middle mile grants we were awarded just last month, our sustainable adoption grant, our Smart Grid grants, our mapping grants, the state's Backroads Broadband program, the capital appropriation of $4.5 million to the Vermont Telecommunications Authority (VTA), a 1200 mile fiber backbone buildout by VELCO on its transmission network, our public safety network project (VCOMM), other public investments, and continuing investment by the state's private carriers.

Basically all of the capital is in place for Vermont to achieve its dream – very high speed Internet and cell service everywhere, leading the nation in broadband rather than following, having telecommunications be a reason companies move here instead of an obstacle to economic development! It's now up to us to execute – don't underestimate the difficulty of that. I'll write more shortly on what execution means now that the money is in hand; but the rest of this post is about VTel's WOW plan and how it gets us to universal broadband coverage.

Specifically, Vtel is providing three things with the money: fiber to the home in their "traditional" service area around Springfield, Vermont; wireless Internet access reaching virtually all of the estimated 15% of Vermont residences which can't get good broadband today as well as many small businesses; and neighbor-to-neighbor training to "show how broadband can help find jobs, improve schools, start businesses, access federal and state assistance, and enhance rural life."

All of Vtel's current telephone and broadband customers in fourteen towns in the Springfield area will get fiber to their homes and what Vtel describes as GigE service. A gigabit is one thousand megabits (you knew that, right). GigE means speeds up to one gigabit per second (1 gps). Vermont's minimum standard for acceptable broadband is 5 megabits per second (5 mps); so GigE is 200 times the minimum and more than a thousand times faster than basic DSL – forget about dialup. We don't need GigE speed today; we will someday, though; and it's good to be way ahead of the curve. Vtel sells this service now as a $34.95/month addon to a few of their customers. It does have a 500 Gigabyte monthly limit after which extra charges are assessed, however (there are eight gigabites in a gigabyte). BTW, GigE service is what Google had been promoting for nationwide service and plans to demo in some lucky location. According to Vtel President Michel Guite, Singapore hopes to complete a GigE network by2014; he promises we'll have ours by 2012 or 2013.

In the unserved areas of Vermont, VTel will be building an LTE network – LTE (Long Term Evolution) is so-called fourth generation (4G) cellular data technology. It is the technology which both AT&T and Verizon Wireless are planning to deploy in their networks as are most of the world's major carriers (some, like Sprint, are betting on a similar but competing technology called WiMAX). Note that what we are getting is so bleeding edge that it hasn't been commercially deployed anywhere yet; there's a risk in that but lots of benefit in being a leader. LTE should be capable of data rates well in excess of 10 megabits (10 mps) in each direction and upgradable to much more. It is a mobile technology so your smart phone or laptop or netbook or iPad or Kindle will be connected not only at home but also as you travel.

Indubitably one of the reasons why Vtel got the second largest award announced in this round nationwide – 10% of the total awarded – was that VTel has been investing its own money for years to acquire wireless spectrum (space on the radio waves in Vermont). This spectrum is a rare commodity and is required to offer this service.

The award that Vtel got is only for broadband coverage; there are no stimulus funds for cellular deployment. But the LTE network Vtel is building is the kind of network cellular carriers plan to use both for voice and data. In fact, more and more smart phones already support voice over IP (voice on a data network) so that services like Skype can work. Three years from now, when this network is fully deployed, I'll be very surprised if it isn't filling most of the gaps in our cellular voice coverage.

So, WOW!

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