Vermont farmer Kerry Luce wants to be connected. She's not alone.
Like many rural Vermonters, Luce has to manage without fast and reliable Internet access. It's a worry for Luce because she relies on the Internet to take and fill orders for the family business -- Sugarbush Farm in Woodstock, Vt., which is known for its maple syrup, cheeses, jams, and other local products.
"We have a lot of problems" with the Internet, Luce said. Processing orders online "takes forever" with their dial-up connection, the only affordable option available at the farm roughly two hours north of Burlington. Uploading photos for their Web site -- which has brought more and more orders in every year -- is even worse, she said.
Luce said that while a local cable television company could provide high-speed Internet service, it would cost $11,000 to install.
Luce's Internet conundrum is not uncommon in rural areas of Vermont, and the governor and legislature are attempting to change that. Earlier this year, Republican Gov. James H. Douglas proposed building a robust, bond-funded network to provide blanket coverage across the state.
"I propose that by 2010, Vermont be the nation's first true 'e-state' -- the first state to provide universal cellular and broadband coverage everywhere and anywhere within its borders," Douglas said in his inaugural address Jan. 4. "When you turn on your laptop, you're connected. When you hit the send button on your cell phone, the call goes through. Unlike building more roads or bigger buildings to support growth, the commercial infrastructure of tomorrow will be almost invisible, but for a handful of cell towers and antennas."
For folks like Luce, the proposal is encouraging.
"I think it would be good, because a lot of companies just like us are old farms and businesses. We're not in town, and most of Vermont is still dirt roads. Most of Vermont is so rural," she said. "It would be nice if it would work."
Lawmakers and top government officials are attempting to do just that -- make it work.
The initial focus of this proposal would be to deliver broadband services to underserved rural areas and to deploy wireless services throughout those areas.
Thomas Murray, Vermont's chief investment officer and commissioner of the Department of Information and Innovation, said that 87% of Vermont homes have broadband availability, and they hope to close the 13% gap with the new proposal. Additionally, 30% of Vermonters simply don't have service, whether by choice or not, he said.
The state has proposed a new agency, the Vermont Telecommunications Authority, to head the project, according to state Treasurer Jeb Spaulding. The authority would be financed with bonds, traditional loans, and state assets such as rights of way, land, towers, and buildings, officials said. The authority would partner with the private sector to provide telecommunications services and build telecom infrastructure, and with investors who would augment the state's contribution.
The authority would also serve as a bridge between public sector efforts and private sector investments, officials said. The state could provide the authority with its moral obligation of up to $40 million of bonds to back projects in the first year of construction and possibly more if needed and sustainable. Initially, the target would be to leverage more than $200 million of private sector investment with the state's backing.
"It's absolutely critical to position ourselves for a vibrant economy in the future, and we're looking for ways to partner with the private sector and make it more attractive to them," Spaulding said of the proposal.
"What the state is trying to do is to make sure that 100% [of Vermonters] have good broadband coverage available," said Tom Evslin, volunteer state consultant and former chairman and chief executive officer of ITXC Corp. "Achieving 100% is of much, much more value to the state than achieving 90% or 98%, and so that's why it's a goal worthy of pursuing, even though it's hard."
Senate Majority Leader John Campbell said state lawmakers have discussed the idea for years.
"The question has been technology," he said. "We didn't have the infrastructure and people who were willing to invest in the infrastructure over the terrain."
The Democrat said that three years ago, Montpelier -- the state capital -- went wireless, and "it's wonderful." Lawmakers, in a collaborative bipartisan effort, want to do for the entire state what they were able to accomplish for Montpelier via bonding, he said.
Campbell acknowledged that $40 million of bonds will likely not be enough to maintain the e-state proposal, but he said it's a start.
"If we're going to do this and maintain this, it has to be a continued commitment," he said. "The leaders of the General Assembly have met with all the players, and we've decided that we need to be fully committed to this, and not just for a year or two."
Evslin, a telecommunications entrepreneur who also at one point served as Vermont's transportation secretary, believes that providing infrastructure in the form of cell towers is "an appropriate use of our bonding money." The towers will have a "long and useful life, from a fiscal point of view," he said. Local service providers can then lease space on the towers, with multiple entities making use of them.
"We're not going to build towers until we have providers lined up to at least cover the investment costs," Murray said.
Officials made it clear that the proposal was not intended to work against local service providers, but rather to help them reach areas for which it has been too costly or difficult to provide services.
"We're not trying to go in and take the business away from them," said Secretary of Administration Michael Smith. "We're just trying to forge a partnership here to make sure that all of Vermont is connected. And I think [the local companies] have tried to be helpful to make sure this all works."
Murray said that the state has had a great deal of contact with local service providers, who appear optimistic about the proposal.
"We're looking forward to see what comes of the plan," said Beth Fastiggi, a spokeswoman at Verizon, the biggest telecommunications company in the state. "We're just glad that there's a focus in Vermont [on broadband] because that's something that's important to us."
The proposal has received "extremely favorable response," and the legislature is currently working on a bill and asking a lot of questions, Spaulding said.
Although Smith said it is "an aggressive agenda" to have broadband and cell phone service everywhere in Vermont by 2010, he believes it is an important and realistic goal.
"This is a fairly visionary undertaking that the governor has requested us to do, and we're ready to undertake it because it's something that is needed to bring Vermont economically and educationally forward," he said.
Campbell admitted that there were some folks concerned about having "all these towers pop up," but he noted that even the environmental community in Vermont agreed that this proposal is a positive one. "We're not going to be able to use this technology right now unless we understand that this is part of a new environment in a way," he said.
Evslin said that as a society, the United States has succeeded in making things like electricity and telephone service available to all of the public once most of the population had them. "Once almost everybody has them, then everyone needs them," he said, adding that what at first is considered new-fangled technology ultimately becomes a necessity.
Around the country, many other cities and states are considering similar e-proposals. Officials in San Francisco are discussing borrowing $500 million to finance citywide Internet access. In Louisiana, the Lafayette Utilities System is planning a $125 million revenue bond deal to build a fiber optics network. New Hampshire and Philadelphia have also considered universal broadband coverage.
"We need to get ahead of that curve instead of lagging behind," Murray said. "Sitting and doing nothing is not an option -- we've got to be bold and get out there."
Officials say that the state could start working on the proposal as early as this summer.
Whether it's a farmer using the Internet for information or sales, new start-up businesses trying to sell things over the Web, or students wanting to connect and learn, this proposal "truly brings Vermont into the global economy," Campbell said. "And for us to survive as a small state, I think that it's necessary."
In the meantime, back at Sugarbush Farm, Luce slowly processes orders on her dial-up connection. To some, she said, "Dial-up would be considered accessibility, but still, compared to how fast the world is running now, it's not. We're ancient." (c) 2007 The Bond Buyer and SourceMedia, Inc. All rights reserved. http://www.bondbuyer.com http://www.sourcemedia.com
