 on how long you're going to take in the office. All right. I'll let you dispose of it. OK. No? That's fine. Nice to see you all. Yeah, thank you for joining me. H93 is on our committee website. It's under Maria's name. People want to pull that up. Thanks, Representative Maslin. Sure. I'll start by giving a brief overview. Representative Maslin, Defford, H93, brief overview of Make Ready, because I'm not sure if everybody's familiar with it. We've had a little bit. A little bit. Not a whole lot. Well, let me just say Make Ready is both an activity and a process. It's an activity in that somebody has to go out to a utility pole and make room for a new cable. Some, of course, in my case, it's a fiber optic. In my case, meaning easy fiber, the one that we've been working with here for a while. It's also a process, because in order to get the Make Ready completed, an applicant, easy fiber, or, let's say, Mansfield community fiber files and applications, pays money on a per pole basis. And that money covers the activity of people going out, surveying the poles, one at a time, making notes as to what has to be done, agreeing on what has to be done. And then the pole owner, generally, or other people on there have to move their cables around in order to make room for the new cable. And easy fiber being the poster child here had incredible frustration, incredible frustration over a couple of years as we were beginning to build out whereby the process that is in the department's rules wasn't being followed at all. Basically, from the time an application is filed and fee is paid there, it was 120 days during which time the various steps are to be completed. And particularly with everybody's favorite nemesis, at least in our area, Comcast, after 120 days, they would begin thinking about going out to get the work done. And we had months of delays. And we'd already paid in advance to have this money work being done. Furthermore, sometimes a number of cables need to be moved. Comcast needs to move Verizon, Mani, and move something. Now it's consolidated. Fairpoint, that's the nemesis I was thinking of, needs to move something. And if they didn't have people available, they'd hire a subcontractor. And so in some cases, in our area, it would be used as cable. Used to, cable would go out for Fairpoint and move something. And then they go back to the shop. And then a few days later, or a week later, or a month later, or something, Comcast would ask them the same use as cable to go out to move something. And on and on, when in case, so it gets us to one touch, make ready, which is the heart of the bill, which is to have the department adopted by rule the requirement that a lot of this stuff with the exception of the top of the pole, which is the electric stuff, which is dangerous to work on. Everything below the electric transmission could be done by one contractor, a crew contractor. Go out and move consolidated or Fairpoint or Comcast. Everybody all the way down through. And then the new cable could go up and we'd all go merely on our way and everybody would have better fit the service sooner. So that's the general gist of the bill. And I'm also grateful for Clay's participation because as many of you know, the department has introduced a motion to do much the same thing in the bill. Very similar all the way down through. And it is good that both efforts are moving along simultaneously because they wouldn't want anyone to lose interest. So the one thing that is in my bill that's not in the department's motion has to do with joint ownership of poles. Sometimes they're owned by GMP, sometimes by consolidated, sometimes by someone else. But occasionally there's a joint ownership of pole, rare, but out there. And our experience has been that party A would go to its work on the pole and say, oh, geez, maybe we should get another party B once another 120 days to do their work. And there's really no reason at all why everybody couldn't just get together and shake hands and get the work done, particularly if it's one touch, regardless of whether there's one corner or two or more. So and as you all understand in this committee, this is in the interest of providing the monitors, particularly in the back of the room, whether they're unserved or very much under-served with high-quality, high-speed internet and phone line, which is what EC-Fiber does and the other startup CUDs or whatever, communications, utility districts are set about to do. And so, okay, well, anyway, you'll notice in the bill the reference to Maine, one section that references Maine. Maine has adopted One Touch, Make, Ready, and has a rule that we would like the department to follow. I'm sure Ferf Tomei, some of you are familiar with, and he's going to be with us this afternoon, has some tweaks that we've worked out. But the gist of it is One Touch, Make, Ready, Save, All, Everybody, a whole lot of trouble and in advance service much faster. And so whether or not the department follows Maine's rule or not, that's what we had a year ago without having the department's motion is perhaps, it's a good model to start with. It has very good provisions in it, most of it is good. And we'd like you to go forward with that. The other thing that I've pointed out that's in our rule is in our proposed legislation is what's essentially a billback provision, which is if the 120 days since elapsed and the work hasn't been done and a CUD has already paid to have the work be done, they could hire a qualified contractor that might be used to stable again or someone else to go and do the work and build back that work against the Make, Ready payment that had already been paid. I mean, fair is fair here. And right, I hear you. Why me extra for more aggravation? I'm with you. I am one of you. So that's basically the gist of the bill and I'm happy to answer any questions you may have. Captain Appel. I was just going to ask about spacing requirements and whether polls are getting crowded? I don't know if any of you drive through Hanover between Dartmouth College, for example, and DHMC and you'll see polls that are just covered with all kinds of cables. I have, but I have this. That question, the short answer is the Isoboso. The longer answer was ask the department because they're much more familiar with that than I am. But I can also say that the department has rules when an entity like Mansfield Cable or something, you know, back up a little bit. Our statutes require that we be provided space and we pay rental. There's an issue that we could, it's not in the bill that in some cases an outlier like Easy Fiber is paying a dollar, is paying for two foot of space and our favorite fair point may be only paying a dollar foot, you know, or somebody and the department is working through that process, which will be better for the upstarts and we'll see what they work through that. But yeah, some are crowded but so far it hasn't been a prohibition about getting work done. This is sort of related and the department may or may not have the answer but I just wondered whether in your own experience or knowledge about Easy Fiber, the incidents that a make ready actually requires the changing of the poll for a taller poll. It frequently happens. There's two kinds of versions of that. In some cases we do need a taller poll, in which case we pay for the poll, about a thousand bucks. There are other times when during the write out, which is the process where the applicant and the utility poll owner and other people go out and look at each poll one at a time, they'll say, yeah, this poll needs to be a taller poll but this is an old decrepit poll. It's not on Easy Fiber or Mansfield, it's on the owner because the poll is out of spec anyway. But in any case, they have to be changed and that's time consuming and we'd like the work done. Round them, no more. So my initial question was about poll rental and fees but you've addressed that or not. Well, it's being addressed. So I'll ask you, does one touch require any, is it purely a bureaucratic streamlining or does it require additional training for crews or? Advancing? Our experience is it's primarily bureaucratic because the people that go out to do the work are qualified, otherwise they wouldn't be there. There is a step where Mike's cable company, for example, would apply to the department and be certified or licensed or something to go do one touch, make ready. It's established that they are qualified to do the work. They have proper procedures for signage and all that sort of stuff but that's a step that should be done really quite quickly. It's not a hassle, it's done anyway. It's just certifying new people to do it to work up and down the poll with the exception of power transmission. So I have a couple of questions, Jim, just to clarify. Jordan. So you had mentioned that Comcast was a big problem in your, Nicola Woods, was that correct or did you mean consolidated or did you mean? My, the primary difficult entity was Fairpoint. Okay. They seem to be seen to us as I said 120 days with laps and then they begin to think about what they need to do. So it's primarily consolidated. Yeah. Things seem to be a little better. That was gonna be my next question. It was gonna be about what you're seeing for trends. Things seem to be a little better but it's the middle winner. So we're not building much right now. Ask me again in June. So when, so can you, in terms of seeming to get better time. Yeah. Like, was it in the last month or so? Oh, I, I could answer you differently. I couldn't, we had terrible problems last summer and last fall, up until. The summer of. Summer of 18. And fall of 18. 17 and 18. We had terrible problems. The more we wanted to do, the more we had problems. And as I said, an entity, this is work for someone. This is employment for, used to S.C.A.B.L. or Mike's Cable or, you know, da-da-da. The application fee has been paid. Someone should just go and do it. What was the explanation? I can't even solidify it. She's. And on and on. On? I mean, well, was there anything, I mean. Oh, maybe Irf can, you could ask Irf the same question. Because he has been, I mean, I can give you a list of reasons but they are all in my opinion. Not substantial enough to. But sometimes, for example, Laura, I can't give you something. GMP needs to replace a pole. And before the pole can go up, nothing can be moved. Because there's no pole to put it on. And as it turns out, when Mansfield Cable, DC Fiber wants to build a road, we require any sensible business person to understand all the make ready needs to be done on the entire road before we can send a crew out to put our cable up. So if there's foot dragging on one or two poles, then that road is out of commission until it gets done. And if we are approached, DC Fiber's approach is to try to build a whole town. We built five towns last year. So if pole licenses for a holes road are lacking, we just can't work. You know, we have to build a road here, build a road there. We're waiting for six licenses. We're waiting for 12 licenses, meaning the whole road. I don't know if I've quite answered your question, but your work needs to get done and it's employment for somebody and it's service for lots of different models. Well, my question was around, not all that hard, but my question was around, are you getting any explanation consistently as to why it's taken so long from the company? The one that I can offer you now, I just, you know, poles need to be replaced and until that's done, none of the work can be done. And if party A takes 120 days or 150 days or longer, GMP owns some poles and utilities own some poles, then that's an excuse. And then the LG's, you know, finally there's a new pole. I get 120 days more, don't I? It's just ridiculous, in my opinion, which is contrite or concise for today. Mark. So my question is, so this make ready work that's not completed and you hire another outfit that's qualified, is there issues around the price that that other outfit might charge and how they handle the cable or the tools? No, no, that is because when an applicant pays for a pole license, the pole license covers all the work that's gonna be done. So if I hire Scott and he's qualified, there's money's been paid, the department holds it, I think, or I'm not sure who you could ask. You could ask. No, I actually think actually the pole owners and the utilities, they have the money already. So Scott can't charge double and build out any cost? No. There's a set cost? Well, there's a top cost, we paid for it. You paid for it, somebody paid for it. And anybody in the room can correct me, but my understanding is when you pay for a pole license, your company pays for a pole license, that's for everything that needs to be done there. So when it says any cost, there is a maximum? Yeah, I mean, you guys may want to take testimony and qualify any cost, but my understanding is pole license has been applied for, paid for, and as far as the new Fribroctor Cable Company is paid, it's concerned that the money's been paid and it covers whatever's supposed to be done. Did you have a question? Yes. Well, simple question. Whenever simplification is required, cover all of the utilities on the pole except for the electric wires. So there's only two certifications, one for electric wires and one for anything else. The electric transmission is completely beyond what we're asking for. Right, right, just to be clear, any company that is certified to work on telephone cables, fiber cables, or whatever, can work on all of them except for the electric wires. Yeah, everything below the electric transmission, and I also should point out if it's a new pole, regardless of whether it's one that's out of spec or one that an applicant is paying for, utility, electric utility has to do its work first. It's the top of the pole, they have to do their work first, and then the underlings follow along. And then following up on Mark's question, it sounds like there is a set rate, whatever the word is, tariff or something, for the pole, the license fee for the pole that applies to whoever does the work, so that's on the bill. There are tariffs, thanks for using that term. That's correct. And we had a question on GMP raising its tariffs when they took over from CCV, but that's nothing that I'm addressing in it is what it is. Okay. Last question. I've got a little bit of nuance to the EC fiber in particular, if you want to talk about it later, I just wanted to mention that I've got a little more info. Well, we're gonna keep talking about this, but I want to be cognizant of the residence time. My time's your time. Oh, okay, what? Well, no, your time is your time is at a premium, I've got a room full of people. Thank you for joining us, Jim. Thanks for having me out, hearing out, appreciate it. You're welcome. Oh, one other, when you get to the subject of increased resources for telecommunications build out, I do have a sentence or two to add, but your time is limited, so I'll come back when you want me. Okay. Tell me some money, some money. Is that what you're telling us? Well, yeah, money is at a premium in this state, but there are good ways to put it to use for telecommunications build out, and I have an idea or two, and there's a bunch of bills on Laura's got a bill, and maybe the time will testify is when your bill's up or something like that. Thank you. Clay, can you join us again? And, or you said, would you spread someone out? Yeah, so this is Sarah Simmons, she's an attorney, that is working on the bill making, so. And to kind of put a finer point on Representative Madsen's testimony, I just, for the committee's benefit and mine in particular, I wanted to just get a little more information on the case or the DACA that you've opened with the PUC on this particular issue. Sure. To the extent you can share information. Absolutely, I think I can share everything with you. So, you know, right there, rulemaking is not a contested case, so there's certainly just a petition, so there's nothing confidential right now. It's something that we have been thinking about for a very long time, and we've certainly heard the complaints of attaching entities that the whole attachment rules as written created a very lengthy and a very lengthy process, which frankly, poll-owning utilities didn't always follow 100%. And usually where applications fell down was in the time periods, were they adhering to the time periods outfinding the rule? Were they getting the work done within 120 days? And you also have this issue with most polls in Vermont have multiple attachers. So the electric utilities at the top, and then you have one or more telecom providers at the bottom, and the way Make Ready Work happens under our rules currently is that if you want to attach to polls, you submit a poll-license application to the poll-owning utilities. So if Consolidate owns the polls, you would submit it to them. If GMP owns the polls, you would submit it to GMP. And if they're dual polls, you would submit applications to both. Then once application is submitted, there I believe the next step is that the poll-owning utility, there's an application fee. I think they do a preliminary look at those polls and say, okay, we're gonna go out and do a Make Ready survey. This is the cost of the Make Ready survey. You pay that. The survey entails an agent or an engineer of the attaching entity and an engineer from the poll-owning utility. And they go out together and they look at the polls. And then the poll-owning utility comes up with an estimated Make Ready cost, which is then paid by the attaching entity once payment is made. Then that starts the Make Ready process. Electric company goes first. Then, and this is the case in most instances, the electric company doesn't really have to do anything. It's the telecom providers that need to move down. So a fair point, Consolidated, the phone company, the incumbent phone company is almost always on the bottom. So they move down first. And then next goes your cable television provider. They're usually second in line. They move down next. And then any other SEALX, facility-based SEALX that are on the poll, your fiber providers, level three, first light, those kind of providers, they move down after. And then the attaching entity may go up and attach. They're clear to do the work and they can commit to construction. This may be a simplistic question. Yeah. But it strikes me if the phone company goes up at a predetermined position and then other entities go above that. Why doesn't the phone company go there and the other entities start at the top and work down so they don't all have to move? There's already a space. That's an engineering question that I don't know that I have the answer to. I think it has something to do with the size of the cables and the fact that the telephone companies are frequently doing work up there much more, with a much higher frequency than a company like First Light or level three. But it's just industry practice that the telephone companies can be on the bottom followed by the cable company. Seems like there ought to be a lot of ways to avoid everybody needing to move so the next guy goes in. Right. And by guy being a gender neutral term, in this case. I think it has to do with the mission as well. If the attaching entity is higher then they can actually have a bigger spread as far as service goes. That has to do with it too. And to Clay's point, the telephone companies, the cable companies, they desire to be the lowest at the lowest point on the pole. The reason for that, I... It's because why? I'm not sure why that is. But it may very well have to do with the frequency that they have to go and do work so they want to be at the lowest point on the pole. Good. So you want this much spread between voltage and other conductive materials as possible. So if you've got a power line next to a phone line it induces a current which can cause static and lousy connection. So if they want as much spread as possible. They also want to be as high off the ground as possible so they don't get hit by traction. Yes, so there is a sweet spot for telecom. There's a safety zone between the neutral and where the highest telecom attaching entity could be. That's 40 inches. So there's a limited space in which, and where a telecom provider can be. So frequently that when you have many providers on the same pole that requires a higher pole if an additional attacher is going to come attached. But I appreciate that explanation. It's certainly the industry standardation wide. I've looked at telecom poles in other states and it's no different. The phone company's always on the bottom followed by the cable company followed by fiber. And of course fiber is not, doesn't have the same exposure to static because it's light passing through glass. So that's certainly the reason for that. But there are inefficiencies in the make ready process which we're hoping that our petition seeks to, or will help address. So we've offered a petition that provides a one touch make ready solution for attaching entities. So we can have just one contractor go out and move all attachments. And I think representative Maslin's example of Eustis cable, they are certainly one of the most popular cable construction contractors in the state. They are our contractor. So we are a attaching entity that department public service for our fiber. We use Eustis, EC fiber uses Eustis, the blue Comcast uses, I mean everyone's using Eustis. So there are these situations where Eustis is going out one day, moving the cable, going out the next day, moving the cable. And they could just move them all at once, right? So, and it's in part because there's this make ready process where the pole owning utility commissions Attachur number one to go out and move its stuff, then commissions Attachur number two. And there's actually an online system that most utilities in the state use called NJUNS. And I mentioned this yesterday, so I should have looked it up. But it's a system by which the pole owning utilities can issue tickets to all of its Attachur saying, all right, it's your turn to move. Now it's your turn to move. Now it's your turn to move. So, well, one touch make ready does simplify the process because only one contractor is going out and moving everything. And I would say that this is not, we're not gonna be a test case for this. Most states, but about 22 states now are using one touch make ready, at least 22. There are two types of pole attachment rules in the country. There's states that have given up jurisdiction over poles to the FCC. So we call those reverse preemption states. They've said, okay, FCC, you can be the regulator of poles for our state. And then there are states that have retained jurisdiction, like Vermont. So we have not adopted the FCC's rules. And if there's a dispute over pole attachments, that's handled at the Public Utility Commission, not at the FCC. So we're one of those states that's not within the FCC's pole attachment regime. The FCC has adopted one touch make ready. So if a state is in an FCC reverse preemption state, they are using one touch make ready. Maine, which is also mentioned in the legislation is not an FCC state. And they have a similar rule that allows, it's not one touch make ready, but if a pole owning utility is not performing where it should, there are rules that allow for the pole attaching entity to hire a contractor pre-approved by the pole owning utility to go out and do their work for them. And so that's another option under our proposal. I want to let you finish. But there's a couple of questions if you're okay. Sure, I agree. If you're okay, go ahead Mike. So I thought I heard Representative Madzell say that the motion of the petition by the Department of Public Utility Commission does not include the build back authority. Is that correct or does that require a legislation in order to do that? Or is that something that could be included in your petition? The make ready rules require the pole attachment entity to pay the actual costs of make ready work. So there are two types of costs in this world. One is to make ready work and then the pole attachment fees. The pole attachment fees are set by statute, excuse me, not by statute, but by tariff. So it's a tariff rate. If they want to increase or decrease that rate, they have to seek permission from the Public Utility Commission and those are set at costs of maintenance. The make ready costs are just the actual cost of the pole owning utility to do the make ready survey and do the make ready work. So the pole needs to be replaced for instance, the pole attaching entity. Pace for that. I might not be getting at your question. I don't think there are, but so in the example that Mr. Maslow gave, the particular entity is supposed to do the work is delaying, delaying, delaying. And so the fees have already been paid according to whatever they determine will be the charges for that, the cost of that. And so the requester gets frustrated. He says, okay, I'm going to hire my own contractor. Contractor comes out, does the work. And instead of billing the person to hire them or the entity to hire them, they go after the prepaid fees. Is that something that requires statute? Under our proposed rules, the new attacher would pay for everything. But they're not paying twice. That's right. Yeah, yeah. So then what, they're going to refund from the original? I believe the contractor gets paid by the pole owning utility, correct? We didn't really provide for that in our proposed rule. So the way we have it right now is that under the, we have it so it's a dual scheme where you can go through the standard make ready process. If the timelines are exacerbated, then you can practice self-help at which time you hire your own contractor to come in. And we didn't specifically provide for how fees would be paid in that scenario. But I would surmise that the new attacher would pay for their contractor in that scenario. Under the one touch make ready option, the new attacher would pay for the survey for the actual make ready process. And that's really where it ends. And if it were prepaid, you wouldn't want them to pay twice, right? Right, yeah. So that may be something that we need to bring up in the rulemaking proceeding. And is that, can you do that by rulemaking or does it require legislation? That's what I'm trying to get at. No, that can certainly be handled by rulemaking. I think the rulemaking authority of the board in this case is fairly broad. So. Luckily, so is the ability of the legislature. Well, the question was, would it require a, so I'm certainly not trying to insult your authority in any way, but the discretion of the PUC at this point would be that they would have the ability to take care of that. So certainly we don't want to see a windfall to a poll owning utility who can just take your money, not do anything, and then have you commit to hiring a contractor and paying twice. And certainly that's not something that our rules were contemplating anyway. So Mark, and then Rob. This is going a little bit further with what Mike's talking about. My concern would be, is there an opportunity for an independent contractor not to get paid? Or is that money always there and they can draw from it? Or so if they were installing for another provider, is there an opportunity for them to, after a long time, get paid for what they want to pay? I don't believe our rules have addressed that issue to such a finite level, but I do believe it's a concern. I, my experience with cable construction companies that we've dealt with is that they do not tolerate going unpaid. So. Yeah. They will certainly not do the work for free or have an expectation of going unpaid. So to the extent that there's a gap in our proposal and it is just a proposal. So there is a process that the board will go through before it even proposes a final rule that would then go through the rulemaking process. And I anticipate that there will be 25 or 30 entities all ripping our rule apart and proposing changes. So if that's not clearly spelled out, I anticipate that the final rule would certainly require that any money's paid to a hole in the utility would go to cover the cost of that contractor once. Certainly the way it is made. Does your proposal, as far as you know, address the question of spacing one foot or so? Some entities are required to. Let's say that's a separate proceeding. So that there is an active rulemaking underway to address that question. So Scott. You said the make ready is an actual cost. Is that a direct bill through? Or was that a negotiated estimate actual cost that was set and that's the charge for each make ready? The make ready. Okay. There are, so yes, there are, I think what you're getting at is there are contracts for entities often entered to full license agreements that cover, that can cover charges about what it's gonna cost for make ready. So that's your question. If it costs $10,000 to make one whole ready, does that entire cost get directly billed to the party that it's causing that make ready work to be required? I do believe it is. Okay. Is that in statute or in PUC rules? That would be in PUC rules. I think what you're asking is there a standard charge for, there's a standard charge for the, a tariff for attaching them wires. Right, right. Just like a monthly license. There's just monthly licenses. Oh, it's a monthly license. Yeah, yeah. There's not a standard fee or cost or whatever for actually physically putting the wires on the pole. That's an estimated cost or a cost basis. There's a one-time make ready and then a monthly attachment fee. Okay. Right, right. But I mean, the cost of actually doing the work is customized to the job. To the, yes, yes. And that's determined when the survey's done. So my only other question was, does the department have a position on representative Maslin's bill? We certainly can't oppose it because we're proposing to do the same thing. I think we support it. Okay. Thank you. You don't have a bill back, right? Do you have a bill back in your proposal? A bill back for, oh, no, I think that's what representative Maslin determined was the one on the metal. Right, right. But at heart, we're trying to solve the same problem. So certainly the favor. The question is, does the department support the bill back provision in representative Maslin's bill as an alternative to the rule that has been considered? I will postpone judgment on that until I check. But I think so. Okay, thank you. Clay, we started questioning you maybe before you were finished talking about it. So if there's more you want to add about the case you've opened for this? No, I think what we've discussed so far covers it. I would say there is one difference between our proposal and the bill and that's that we didn't make a distinction between a simple make ready or telecom make ready versus electric. Under our one touch make ready if the contractor is qualified to work in the electric space and that can certainly be part of the make ready solution. Is there a timeframe by which you're anticipating smoke coming out of the PUC chimney? February 25th? So under the Vermont Administrative Procedures Act the commission has until they have 30 days during which they can either initiate a rulemaking proceeding or deny to do so. And they have to explain why they deny. So they have until February 25th to do so. And that will then start the rulemaking process which we anticipate will involve a lot of stakeholder involvement. We have our question on our petition for the PUC to hold a workshop at least one possibly two to three workshops where stakeholders can come to discuss the proposed rules. We can explain them and we can get everybody's input to try and come to some sort of consensus. And just from judging from prior rule makings ones that are still going on, there is a rulemaking proceeding for the pull attachment rates that's currently underway that is separate. It's all under rule 3.700 but they are separate sections. That just to give you an idea that one has been going on for two years now. At least two years. So these things can be lengthy. So I'll ask this question on my behalf but we also have new members of the committee in addition to myself in terms of the rulemaking process and what that entails. The legislature will often enact a law statute and the next step in the process is rulemaking relative to that statute and that process sometimes winding its way back through the legislature through Elkar. The rules that you're talking about PUC coming up with are I'm unclear on the process. While state something you tell me if this is incorrect you have put forward a recommendation as to how things would work with PUC essentially hanging the meat on the bone that the rules if you will, related to that recommendation. Is that a fair analogy? Yes, so as part of our petition we've proposed an actual rule. Certainly they could adopt that rule as it's written but likely they will hear from parties, they will make changes, they can propose an alternative rule. Maybe very similar, maybe very different. In the timing of the finality of that is again presuming at the end of the month that they say yes, this is something we're gonna take a deeper look at and move forward on the timing of when those final rules would come out would be unclear. Yes. Fast would be six to eight months. Yes, that'd be very fast. Okay. I did wanna correct my testimony. There is a section in our proposal that states pull in the utilities shall refund amounts collected from attaching entities for work subsequently completed by outside contractors. So I have a question about the connectivity fund. Oh, okay. I don't know if we're gonna get back to that or not. I was intending to take a bio break for the chairs. For the chairs, maybe for the chairs. I don't know where I can remember here. And so you're welcome to ask that question. I'm gonna excuse myself and we're gonna, what I wanna let you know. Sir, do you know when Laura's gonna be back? I don't know if you know. Okay. What I'd like to do is have the committee following your question reconvene at 1130 from 1130 to noon, and we're gonna have a committee discussion on a broadband bill. So, okay. So the question I have is, Governor's budget proposal included $955,000 of surplus revenue to protect the connectivity fund. Assuming that the Appropriations Committee decides to use that surplus revenue for that, and or assuming that they don't decide to use surplus revenue for that, does the department have any recommendations as to otherwise provide money for the USF or for the connectivity fund? I think I just telegraphed mine. No, that is the proposal for funding the connectivity initiative this year. This is the one time, 955,000. Just to clarify a question, the connectivity fund is capital expenses only? Or is it? For the connectivity initiative, yes. So we're, to put it plainly, we're trying to turn those red dots into blue dots, unserved to un-served. So it's not engineering or feasibility studies, it's wires? Eddie can certainly use the money for those things, but at the end of the day, at the end of the project, there has to be service available. So if someone saw funds purely for that, purely for an engineering study and there was no guarantee that at the end of that study, there would be broadband within a year. We get providers one year to provide broadband with slight exception that if they experience make-ready delays that we'll extend the project timeframe, but there has to be, and we don't pay until their service. So Consolidated does a project. They need to certify that there is indeed broadband service available to those particular addresses, but at least 10 megabits per second, down one up, at the end of the project. That's another question. Well, one clarification question there. If an entity comes in and says, we'd like to do this project to extend broadband out, but it's on the lower end of the spectrum for speed and all that, can you require them to go to the next level up, for instance, 70 SL to extend 10-1 or greater? So they would have to propose a project and we take into account the speed and technology, so the bandwidth used. So if you have a project in location A that is $1,000 in address and it's the fiber of the premise over the DSL, but DSL provides an important service in areas where there is no other provider nearby. You've got no cable company that is even remotely close enough to extend, or there's no EC fiber or kingdom fiber option nearby. So really DSL is the only choice they have. If the state is human, you can say that would be okay. Yeah, and that's a lot of our state. So it can often be the most cost-effective option and we won't shy away from that because at least then these residents get some sort of usable broadband that will make their lives better and is obviously better than having no broadband at all. It's just one small housekeeping wrap up. I don't believe legal counsel ever identified herself on the trip. Sarah Assevas, ATVVS, I also, if you're interested, I only brought one copy, but I do have a copy of our petition and the proposed rule, if you would like to keep that. Can Sarah Assevas send that to you electronically too? That would be easier. All right, thank you. Okay, thank you very much. Thank you. What I would like to use this time for just kind of a half an hour that we have before lunch, my hope is that our committee can push forward with some broadband legislation in the next, I'm gonna say one, maybe that's three weeks, maybe it's four weeks. We have a number of bills on the wall that address various broadband issues. It's certainly a priority of the speaker and the governor as well and it's inside. Yeah, and actually I think a number of people in this room. In that context, and especially because Representative Sebelia has done a lot of work on this, I asked her if she would start to pull together a list, if you will, of a number of the initiatives that are laid out in proposals and bills that she has introduced in the governor's proposal, some things that have been spoken to by the speaker so that we essentially can start as a committee to start to generate some consensus, if you will. And maybe there's not consensus but we'll work through that in the coming weeks. Here are the initiatives that are kind of on the board and let's take a look at those as things that we may include in a piece of legislation to cut here and also as there are things that we may want to add and subtract from that list. But I would like to see our committees start to form around initiatives that we would prioritize as starting to push the ball down the field, if you will, in this issue area. This may take the form of a couple of different bills. There may be things that we decide for strategic reasons would best be handled in a unique piece of legislation but I want to start to get all those things on the table, if you will. So, Laura, if you want to just lead us through some of those lists, I was hoping Maria was going to be here, that was my mistake in that scheduling here for this time. Ultimately, Maria will be charged with putting this into legislative form but anyway, we can work through that as we go along. So that is my oversight in that schedule here. Maybe she'll be able to turn it up. It's like magic. Maria, I apologize that I did not reach out to you in schedule time for this. So what I was just laying out for the committee is what I would like to do in the near term and I've asked Representative Sevillea to lead us through this is there are a number of proposals both on our wall from the governor, things that we've talked with the speaker about. I would like to start us to get those ideas on the table and certainly folks around the table are welcome to add and suggest subtractions from that list to work our way towards one or two pieces of legislation that we will be molding and hopefully acting on as a committee in the next, I'm gonna say three weeks. So with that as an introduction, I'm gonna let, and you're welcome to sit at the table if you'd like and wherever you want to sit to take notes and check us along in this process. Do you want me to just kind of walk through? Yeah, and I'm kind of making notes on this as well. Yeah, okay, starting up here. Okay, yeah, so I have two bills conceptually, one is the Vermont Universal Service Fund, though. And what does that do? H94, and that though, the one that we have right now raises the USF by half a percent, so that's 1.6 million. There's a current allocation in there for million dollars for feasibility studies and that type of work for CUDs or other startups. That allocation I think, having spoke with a number of folks probably needs to come down, so that's why I need to be adjustment, but this is just raising in general, 1.6. So that would take the current Vermont Universal Service Fund fee from two percent to two and a half percent? Yes. It would do that for four years. Four years. And what that bill prescribes is that that money be used specifically, is used for the connectivity fund, the camera. The connectivity initiative. Yep. I think that's the... Can I do the fund? Yeah, the fund. With the exception that a million dollars of the amount raised is set aside for feasibility studies and that's either a million dollars every year or a million dollars over the four-year period. Great. And so that's basically a fundraising vehicle to fund some of the... Rural. Some of the rural broadband stuff that we're talking about here. As part of, you know, just to sort of... One more question about that. And so that your mark gets away from it, the connectivity initiatives requirement that it end up in cable beam ends up in, connectivity initiative requires that addresses be connected at the end of the project. But you have a money set aside, which could be for studies that don't necessarily... It adds... It adds connectivity in a year. Right. Yes. It adds an additional. And what I said is I think that amount is going to have to be adjusted to what it's proposed. I think it's probably too high. And so we're doing some work on that. As part of that discussion, so the governor has also proposed, I don't think this would be included in that bill, but he's proposed a one-shot investment in the economy fund of just under nine dollars. Nine hundred and fifty-five. Thousand. We also have a bill up here on the wall, H-145, which deals with the wholesale language that Clay was just talking about in terms of that hole that's been opened up in the Illinois University Service Fund of between four and six hundred thousand. And Chuck Storo, who is not in here, has a well-rehearsed presentation that he could kind of explain how that would work as could be. So there's one bill, my University Service Fund bill, looking to raise by a half a percent, including some funds for feasibility, studies for rural, either municipalities, startups, or CUDs, and additional funds into the connectivity initiative and high cost, so we've got a split in there. And then also just thinking about these funds that the governor has built. So that's the Vermont Universal Service Fund bill, kind of dealing with it on its own and sending it out, which we would take a lot of testimony and clarify the question again. 145. Yeah, doesn't actually change the amount of revenue, right? It just changes who's pay. Changes who's pay. Yeah. And right now, it looks like no one's gonna be paid if we don't change who's pay. It was 18T, guess who. Then looking at a bigger kind of broadband on Neva's bill, and including in there, the Vita loan pieces, which are in 160. This is eight bills, or is this the target? This is, so this is what this will do is pull, and the first one will pull in a couple of bills so the Vermont Universal Service Fund, it'll pull in 94 and 145. Okay. And the second bill, we'll pull in 160. So these are elements of the governor proposed Vita, which we may make some changes to. The bonding, which is general obligation bonding proposal from the governor. We need to have a discussion about human resource assistance for municipalities as part of this. So we're thinking about how we can help municipalities, CUDs, startups move through this process, and solve the problem of unserved remodders. There needs to be some additional help for them, whether that's in state government or outside of state government. It's a contract position, but there needs to be some sort of personality. We also have a more kind of longer term, less urgency, H95, which is the feasibility study. Having the Department of Public Service look at electric companies and broadband internet access service. It's part of that feasibility study. We may consider some pilot study work that has pilot work that has been done. We may want to. As well as a possible broadband commission, something that sits maybe outside of government and has some legislative bodies. And so that's kind of where we are at right now. As part of this, for those of you who have not gone through, we would have, I would envision you would hear a lot from VLCT. We would hear a lot from the startups in Vermont, so like a DC fiber. We would hear, obviously, from all of the providers, the wireless providers, to the companies. We would hear from consolidated. We would hear from the independent phone companies. We would hear from the utilities, Velco. We would hear from VLCT and perhaps VEPR, perhaps AARP, folks who are representing the remanters who are being injured by the current state of affairs and who are being put at risk by the current state of affairs. And I think we would put it in here from the Treasurer's Office, maybe on the bonding. We would definitely hear from Christine Halquist. I think she's scheduled, she's not today. She's today, excuse me. So we'll hear from Christine Halquist today. So this proposal that we have on the electric utilities, this has come from Virginia legislation, but of course it's the concept that Christine had talked about on the campaign track. So I think that's, is that okay? Yes, so I wanna pull this together even more, which is Laura had talked about initially two funding mechanisms. One that is in the governor's budget currently, which is $955,000. Another funding mechanism, not related, but potentially additional money, would be raising the universal service fund fee from two to two and a half percent for four years, which would raise, I can't remember the number, four to $6,000 over those four years. So that would be additional money on top of what the governor has proposed. It's something that the house has passed for the past several years. Two unions. The Senate, it's something that's gotten caught up in the Senate just to begin to get some history on this. One of the things that, I'm about to speak for myself, that as we look at what towns, CUDs can actually do to help themselves, if you will, one of the initial functions that they have to go through is a feasibility study. Again, whether it's a group of municipalities working together, whether it's an individual town, there's a number of things that they have to look at, from engineering to kind of looking at the market that they're in, to reviewing what other options are beyond building their own broadband system, working with incumbent providers. There are a number of things that these groups have to look at. That's kind of the first step. Those feasibility studies cost the order of 50 or $60,000, which are challenges for these local governments or CUDs to come in. Volunteers. So one of the uses of this funding would be to go to help locations around the state who are looking to embark upon that process. Some of this funding would be used for those feasibility studies. All of the money that the governor is putting out there that if we were able to raise additional revenue from the universal service fund, would not be used for feasibility studies. It would be additional money that could go into the kind of community initiative, which could be used for extending broadband or improving the talking services. That fund, as Clay just presented to us, is not a robust source of funds for this at that point. So this would go to building reserves in that fund for this initiative. So that's kind of the funding piece. There's a question of do we include all this in one bill or have those things separated out? Just a suggestion that as we're working on deciding what to put in, and actually working on the legislation, I think it would be good if we had a straw poll of the committee in terms of whether we support these things so we can tell the other committees even before we have put it in language. And I'm talking about the money committee. And what I'd ask Laura to do, which is kind of laid out here, is these are a bullet point things of initiatives that are out there on our wall in the governor's list of initiatives. So yeah, this is a starting point. This is what's gonna be in our bill. We've got to collectively decide that, I think. And then kind of the second group, the VEDA initiative, which is part of the governor's proposal, the bonding initiative, which is part of the governor's proposal. You know, I think those are fairly concrete and we would certainly need ACC data to come in here and talk more about that and maybe about it. The concept of the human resource that Laura had talked about is this is something that has come from feedback that Laura's gotten, that I've gotten from VLCT, from some other groups of when a CUD or a group of municipalities or a town is considering solving this problem on their own, like AC Fiber has done. There's a question of how does that group go about it? Do they recreate the wheel? What is the resource that they can reach out to and state government to help them not replow ground that has been plowed 15 times, or three times from groups that have been successful? You know, there are a variety of things that a select board or a CUD board has to go through that are relatively complex issues. Is there a human resource or a clearinghouse that a CUD that's newly formed can go to to understand precisely what the steps, starting with a feasibility study, has to be gone through in order to get from point A to turning on broadband and a CUD. And instead of having different municipalities and CUDs kind of recreating the wheel all over the state, is there a resource, whether in state government or outside of state government, that can assist these entities in getting through that process? That's kind of the concept of a human resource. And again, that could reside inside of state government, maybe at ACCD, maybe at the public service department or potentially that's out of a non-governmental resource. And the feasibility of the utilities is essentially something that's on the wall here. So I would say just to, and I maybe should have started with this, the intent of this, we have a problem that is opening up in rural Vermont of increasing vulnerability. We have a deterioration that I do not expect to get better. And you will hear those of you that are new in the building, having gone through this with the Vermont Universal Service Fund in the past and other brought in proposals. All of the telecom, all of the telecom companies, all of them, and the phone companies who virtually all of them are also suing us right now. We'll find you and they will say to you, we love this idea, just don't compete with us. So what they mean is just do the last mile, just do the very, the most expensive hardest thing is don't do any of the others. That may be hard to do in some of these rural towns where there's not much there. So I would expect you will get badgers, quite a bit, freshman, quite a bit. But right now this whole industry is changing. And this is no longer an amenity. This is about life, modern life. It's about healthcare. This is about education. Education is about being able to call for help. I mean, in my, in some of my towns, I'm really worried about them being able to consistently call. So we need to have, we need to modernize our telecommunications infrastructure and make sure that people are connected. So this is kind of a catalog of ideas. Again, out of this board and from the governor's, some of the things that the governor has brought up in terms of funding. Actually, funding in terms of real dollars and funding in terms of Vita and bonding, I think. So this is a starting point. And I think we start, we need to start to kind of hear ideas around the table of what to add here, what to subtract as we start to build our way towards these legislation. And as Laura said, we're gonna be seeking testimony ideas from a lot of people over the next three weeks as, again, as we try and move towards something that we would go down here. So that's just from a practical perspective. Does that mean we take one of these and make it a strike ball and put everything into one? That's one path where we can do a committee bill. Even though it's past the date for whatever. Yeah, I would, I'm gonna kind of defer to Maria so you know what mechanisms are available to do that. Yeah, we could do either of those. And one of these, which bill is the governor's proposal? 160. So, I mean, that's got a lot of this stuff in here. And, you know, that could be a starting point. But we've got a free open field when we do that. What I'm thinking about is the interplay of cell service and broadband. What you're talking about, Laura, is people not having, copper deteriorating and people not having access to voice calls, really, to being able to call for help. And that sounds like a cell phone problem. I mean, it would also be sounds like broadband but it seems like it would be more quickly and efficiently, because effectively, solved by better cell phone service. Which could also provide broadband if it's robust enough. So, I guess what I'm wondering is how you see those things or how we see those things interacting and whether thinking about fiber to village centers and hand cell phone service for outside village centers might be the sort of more immediate path. So, I would just say to you, I think there are infinite number of ways that this problem can be solved so that every Vermonter is guaranteed to be able to call for help. They have a backup. So, if the phone line goes down, they can call for help. They're in infinite ways. And I can tell you personally, I have asked all of the providers to help us think about what those might be. And in rural Vermont, they're running out of time for us to come up with a solution or for the providers to take care of this problem. And so, what I have started to frame out and it can only be improved by all of you is how do we throw municipalities for groups of municipalities a lifeline. Right, so I'm gonna end that part of the CUD. Yeah, the idea here is that the incumbent providers, whether they be cell phone providers, whether they be Comfort lines, whether it be cable broadband. I don't wanna speak too far, but I have not gotten to a point where coverage and service is adequate. Right. In many ways, we are constrained from mandating that coverage be more adequate. And we are at a point where, to some extent, municipalities and CUDs as they form are, I don't wanna say on their own, but in some cases, have to solve their own problem. And the question of how can we in state government better enable them to do that. Right. We can find $500 million and to solve the problem statewide, short of that, are there other things that we can do to better enable local towns, CUDs to solve their own problems? Well, so that's what I'm wondering about. Whether incentivizing cell phone towers might not be the fastest path to the easy approach that you're talking about, which is being able to get people a dial tone. And also, if there's sufficient capacity on the cell phone tower, that would also provide some kind of broadband. So I guess that's what I'm wondering. And I'm not an expert in this at all. I'm just asking questions. I don't know many. No, it's a great question. Yeah. So two thoughts. One is just that I would love to see the electric utility and broadband broken out via standalone, because I think that would move without some of the debates, the funding and the people in general. So that's just a preference there. The other is kind of tying into the ongoing discussion about public safety and that need for connectivity. And I'm feeling like there's a fundamental rethinking as the technology landscape has changed. Our definition of connectivity hasn't really changed. It seems there's a fundamental rethinking that has to happen, and I don't know what it is. But I have fiber optic, so I have great connectivity unless the power goes out. And then I have a battery for an unsuspected amount of time. We hear a lot from people in a similar situation that they used to have a connection that they now don't have. And there's been a, in the upgrade, there's a new problem created. And so, what is it that we need to provide to remodders? Is it cell, is it a signal of some kind under most conditions as opposed to a copper line? I don't know, I'm not sure where to go with this. Right, I think those are great questions. And then I guess the follow-up I would have is, as a democratic form of government that does not control the wheels of commerce, what are incentives that we can put in place to achieve those, or what are direct mechanisms we can put in place to support, again, public safety issues that we wanna make sure, as a first priority of me are dealt with. And first night is a huge piece of this which we have really talked about. Yeah. It's a huge informational piece. It's not one that has a lot of levers. So, that I'm concerned with just about how much time we spend trying to find levers to put on there. And I'll just mention one more thing with regard to H95 and where that falls in here. As Laura and I have talked about this kind of on the side, clearly funding mechanisms and dollars attract more, oftentimes attract more attention. And this was kind of the question of this two bills as opposed to having all this together to give members around this table as well as ultimately 150 members who are taking a look at this, to consider funding mechanisms aside from policy mechanisms. And that's a question for this committee to cogitate on. But that's why I was saying, does this take the form of a couple of bills or one bill? And I think your point's a good one, which is, there are some things we might wanna consider separately. And just in my intellectual organization, I thought of that as funding relative to our policy. I have a question for you, Laura, about the the universal service fund, two to two and a half percent has died in the Senate. But my impression has been that it's not, hasn't died because of opposition to it. It's been lumped with other things which die. It was a standalone, it was a standalone both times. Okay. This is for the correction. And I feel a little bit better about it in the Senate this time, mostly. So I agree that 95 could be taken separately. I also include 93 with that. Thank you for bringing that up. Because both of those things are, especially since 93 seems to have the support in the department. Yep. The other thing I was gonna bring up is that they did that drive around study to find out what coverage there really is. And I think that's gonna have an impact on whether we get additional funding for cell service. It's not a loss. It's not whether we get funding. No, not whether we get funding. We get funding from the federal office, the farm bill or whatever that is. So I don't know what the timeline is on finding out what the results of that will be, but with things with the way they are in Washington and who knows what will happen. What will happen? The question I would have on that is, is there a legislative action for us to take there? That's my question. I mean, I think that is a big- And I don't know whether we need to take a legislative action there or wait for things to happen. It might be helpful to have a update on the significant amount of funding through the USDA ReConnect program that has been made available. Much, many census blocks in Vermont are ineligible because of detail, but there are some that are eligible. So maybe having the Department of Public Service come in and talk about that. Although there's no action for us when it's more informational. You know, if you think about all the programs and everything that all the providers are gonna tell us, you know, this problem is gonna get solved, you know, in 2015. Yeah, I just, I think it is important, you know, that our caucus, I think, opposed the increase in the US even as a service provider. I don't think you did. Some of us did. Some of it. But again, to say that it's gonna end in four years, you know, the property transfer tax is a good example of something that doesn't exist. So I think people have to go into it realistically and it's just a comment for trying to sell something. So not to eat too much in your lunchtime. The idea and just kind of laying this out and starting to get some additional feedback is this is going to, and this deserves and needs more feedback and cogitation by this committee in the coming weeks. I think I'm going to start to build our committee time in the next three weeks pulling in testimony from people who are interested in some of these initiatives and there's gonna be lots to start to get that feedback to work on and to adjust, you know, some of these ideas. But this has got to be a work in progress. Can I just, I just, and I could have missed it, obviously with my not being here in recent days. But the situation that Laura is talking about with regard to rural Vermont and landlines, is there a document that has been submitted to us that actually outlines this problem? I mean, I'd love to take your word for it, but I want to make sure I really truly understand that there is a problem and how big it really is. I just, I haven't heard in my areas of rural Vermont County, for example. So there's a search quality investigation that's open. I don't know to what extent we can take, we can provide information in here about what's happening. Not just, but I would like some testimony that really outlines what the problem is if there's a significant problem or not, or if it's just something that can be done very easily if it's one town or something. It's unique to it. If it's unique to a particular area, I don't want to overexaggerate any problems that we might have. We already have enough problems. I don't think we need to, so. Yeah, how many cell towers would it take? Yeah. Yeah. And the state does all the cell towers. Sure. And we're gonna need cell towers for the first time. So do you have a similar process of timeframe in mind for energy related stuff? No. No. No. Just like a herring thinks up. No. No. No. No. No. No. No. No. No. No. No. No. Yeah, I can't remember when we had this discussion, but in the next week, we have this ADS bill, which I'm hoping is not gonna be controversial. We need to give feedback to the Ways and Means Committee on a funding mechanism for POC and our public service. We need to finish our recommendation on that by next Thursday. We're gonna be doing some work on this. And then I believe by tomorrow, we are, as you're more familiar with than anybody here, we're gonna get a letter from the appropriations committee asking for feedback on a number of funding proposals kind of in our policy, Bailey Wick, that are in the appropriations committee. One of them, the governor's one activity fund thing, I'm sure it's in there. So that is kind of our full play, I would say for the next two or three weeks. We are gonna try and keep folding in energy things as well, absolutely. But this is what I would say is our immediate burden. We're meeting one. One household. Oh yeah, the funding teams. Thank you for joining us. I'm guessing we're gonna have a couple of folks moving in here from the floor. If you wouldn't mind introducing yourself for the record, and we're gonna record the hearing, and we'll let you take it from there. And let me ask you ahead of time, do you mind if members have questions, and I'll direct that to you if we ask questions during your presentation, would you move it for a week in the end? It's totally up to you. No, I think ask during the presentation. I plan on basically less than 50 minute presentation. Okay, great. And it had a good time for questions. Okay, perfect. Can't do it, please. Okay, so anyway, my name is Christine Hoplitz. I've spent at least 18 years looking at broadband. Starting in 2000, actually when Tim Nolte from Burlington Telecom came and approached me and said we should roll out fiber to all the homes and businesses in rural Vermont. And of course, I've done the spreadsheets and the cases for years and years and years, and I've looked at every technology that exists. So I'd be happy to answer any questions you have about technology, but I'm gonna talk about technology in the presentation. But if you look today, where we are today, the premise that I think many people understand today, and I certainly talked about it during my campaign, is I honestly believe Vermont cannot grow if we don't have strong telecommunication services in rural Vermont. I worked for 10 years at the national level, the National Rural Electric Cooperative Association. They're the organization that's responsible for fighting electricity to all of rural America. This is the top issue for the National Rural Electric Cooperative Association as well. There are co-opts nationwide. There's about 60 of them right now that are actually in the process of refibing every home and business. There's about 989 co-opts nationwide. Those co-opts that have done it have successfully turned their economies even in coal country. So there are use cases and I have a use case for you here as well. But the first quote I'm gonna lead off with is from one of my favorite heroes, FDR, who was the founder of the Rural Electric Cooperate Movement. What I believe is one of humankind's greatest accomplishments. We connected every home and business with electricity in America, even though the business case didn't support it. And of course, his quote is, if you're not getting it done with a private utility, do it through the government, which is how the cooperative system was formed. And one of those crazy new services when I was running asked me about socialism. Well, you look at a cooperative. A cooperative is a pretty social assistant. But it's certainly driven some of the, some whole heck of a lot of capitalism in rural America. So infrastructure is key. And I don't know when or where infrastructure became a socialist activity, but it's certainly what spawns growth in America. We're actually spending only about half of what we spent in the 60s on infrastructure as per our gross domestic product dollar this year. So, you know, I'm gonna talk about the electric grid of the future. This really starts with, this is a critical infrastructure that the electric grid is gonna require in order to get 100% renewable 100% of the time. And I'll talk about that. I'm gonna talk about why I'm so bullish about fiber optic infrastructure, the technology comparisons, which you'll see why I'm so bullish. And I'll talk about fiber optic and telecommunications, the advantage of using the regulated utility for open access fiber, some of the legislative considerations and some of my final thoughts. So it's the bridge to the future fiber. Our economic development depends on it. If you look at speeds, access speeds today, today the average access speed for an urban area is 70 megabits per second. And if you compare that with those of us in rural Vermont who can get lousy internet service, we get seven, one tenth of that, seven megabits per second download, one upload. One is one 70th of what the urban folks get. We're competing with the cities for our business. That's expected to grow of 200 megabits by 2020, 1,000 megabits by 2028. That cannot be done with any other technology but fiber optic. Just for example, Netflix, one Netflix show HD requires 25 megabits alone. So we're kind of being left in that line behind in America right now. America is about 10th in the world in terms of access speeds. We're about 26 within that 10th. So we're pretty far behind. We're somewhere around Slovenia in terms of third world. Fibers to promise the ultimate solution. It's been around a long time. It's future-proof. It's just like an electric wire. Doesn't degrade. And some people have said to me, and you just got to remember your physics. Some people say, well, somebody might come up with something more advanced. Sorry, I don't know anything right now that goes faster than the speed of light. So when we find that, then we'll probably be teleporting to different worlds. So I look forward to that. So getting to this future, I'm going to say the infrastructures, if we want to get to 100% renewable 100% of the time, it's going to require the reliable connections that fiber will give us. You know, I'm not going to go through all these words here. I kind of threw this in for your education, but because it uses light, it's the fastest speed. If you look at the miracle of fiber, one single strand of fiber, smaller than your human error, can transmit, it can be split into 100 wavelengths and allowing recorded speeds of 13 terabytes per second. That's what Facebook plans on with its fiber, 13 terabytes per second. That's 13,000 gigabytes per second. And Nokia has a technology to bring it to 32. The technology keeps splitting and splitting and splitting in terms of speeds. You know, people think of it as a new technology, but it's around since the late 80s. Let's talk about why I argue for regulated utility ownership as an infrastructure. The reason I argue for regulated utility ownership is because it's so much less expensive than the way we're doing it today. First of all, an electric utility because it's basically regulated and protected by the public service commissions, they get to borrow at the lowest rates in terms of infrastructure. They do infrastructure. Electric utility life is 30 years, twice that of telecom companies. So just by the nature of your regulated utility owning the fiber, you cut the actual costs in half. And sometimes they've got as far as 40 years, but that's all the public service commissions. Can you clarify, you say electric utility life, what do you mean as opposed to life of telecommunication? What I mean is when electric utility, you replace your infrastructure over a 33 year period where telecom, so it's the depreciation rate. So that becomes the real cost for the consumer. It's what you're paying for the infrastructure. So think of your home, you know, if you take a 20 year mortgage versus 10 year mortgage and what your payment is gonna do. So it's not based on the actual lifespan of the infrastructure, it's based on depreciation. It's based on depreciation except the depreciation rates as well. So placing fiber in the electric space eliminates the expensive make ready costs. Make ready is what, today, because we have, because the telecom is outside the electric space, that allows them to use non-certified field workers. They're not first class fine workers. But that also, and the reason for that is because of the electrical hazards that are involved with high voltage. But you have to keep your telecom 40 inches away from the neutral, which means when you introduce a new telecom wire, you have to do all this work on the poles and that cost goes directly to the telecom provider which increases the cost of the consumer. But if you hang it in the electric space using your certified first class line workers, which we have all over the country today, as part of, that's what they do. They pull wires and fiber is just another wire. Can we start along the way? Yeah, sure. So we were just talking about this make ready earlier today and when somebody who's running fiber wants to add that to a pole, all the other utilities have to move their lines down because the phone line has to be the bottom line. So what you're suggesting is by having electric utility line workers string fiber, they could string it in that 40 inch space. Yeah, it actually is. When we started doing this in 2003, I was working on a project called Northlink. We actually hung it right below the neutral. You could actually hang it from the neutral as well, which saves money. Fiber by definition is what's called all dielectric, which means there's no metal in it, which means you can place it right on the wire. If you have to, in fact, some of the transmission utilities have fiber built right into their transmission wire. And I'll get to that. There's a lot of fiber that exists today within the electric utility infrastructure. And today, the biggest cost, and this used to drive me nuts. I'll just use a story to tell this story. We got two separate companies trying to maintain the same infrastructure. I would be up there as CEO of Vermont Electric Co-op during a major storm. We'd send a bucket truck up to Canaan, Vermont, which, raise your hand if you know where Canaan is. So I'm gonna feel it soon. Yes. I've seen it on the map. You know, we would send a bucket truck up to Canaan to restore three spans of wire. And then of course, Fairpoint now consolidated, they'd have to send their bucket truck up and say, why are we paying for two truck walls with something that could be done at the one? You know, very expensive. So you got two organizations trying to support a telecommunications infrastructure. And what I'm talking about here is driving down the cost of the infrastructure so we can get it out further. You know, repeatedly when I've done the math over the years, the existing process, the way we hang telecom, using a separate semi-regulated utility versus our regulated electric utility, the best you can do is get down to 12 customers per mile because of the infrastructure cost. And you know, if you look at Washington Electric Co-op, for example, they have 10 customers per mile. You'll get up to the 10 customers per mile. Eight, eight, thank you, thank you. There you go, and you're down to four up in the Northeast Kingdom. So if you really want to get it to rural Vermont, you've got to drive the cost out. And the only, and what I want to argue about is, you know, we can cut the cost by 75% doing it this way, or greater. I'll hit on some of the legislative considerations that I think need to be addressed. I think we need to establish language occurring, that encourages electric utility investments in the fiber backbone, really signaling the Public Service Commission. Establish the position of, I think we need a Vermont State broadband manager working, and I think it should work in the agency of Commerce and Community Development. It is an economic development activity. And we have these various community utility districts throughout the state, but they don't have the technical resources to take on these issues. We really need somebody available to help to grow this support, those communities that are driving for this. Give the authority to set bulk data tariffs to the Public Service Commission. This is how we pay for our electric infrastructure today. You know, when we set an electric rate, part of that's the infrastructure cost. And you make assumptions based on that infrastructure cost. So the Public Service Commission would say, okay, we're gonna invest X millions. It's gonna be paid off for a 30-year period. We're expecting a 50% adoption rate. Here's what the tariff should be. Now if the adoption rates are higher, the Public Service Commission adjusts the price down. If they're lower, they adjust it up. But 50% is a pretty safe number. That's penetration rates been exceeded all, just about every use case that we've seen across the country. That's a safe number. And I've talked to a cooperative bank, Co-Bank at CFC, they'll invest on those numbers. Christine, I'm way out of my depth on this bullet point. Does this suggest that, to the point where I don't know what bulk data tariffs are, but setting that aside for a second, does this suggest that the rate case that a utility would be subject to would incorporate work that is done by that electric utility in the telecommunications service providing arena. So there would be an intermingling of the business model, if you will. No, I would argue a separation of the business model. You know, you don't need to invest. Do you see what I'm asking the question correct? We would have charge codes. The time spent on telecom would be charged x, electric y. And by the way, the data users will pay for the cost of the telecom, not the electric users. Now you might argue, and that would be up to the public service commission, if as we evolve in our technology, and I'll talk more about that, there may be a percentage of that that will be paid by the electric utility for the amount that's used for their electric utility infrastructure. But that's how rates are done today. We've got experts who know how to do that. I've got a question. Christine, so what about competition? I mean, if this is all done by the electric companies, where's the competition? Well, so let me get, I'm gonna answer that question. I'll get back to you. That's an important question. So exempt the fiber infrastructure for local property taxes. I know people are gonna get all upset about that. But the point is, this is an economic development tool. When you put that in place, you will get return on other taxes for that. I'm gonna sit here and argue in front of you about every possible way to drive down the cost of the infrastructure to make this possible. You're gonna have to make the decision of what you have to do. So I'm just giving you a pie. I'm pieing the sky out of here. I know that one's gonna be a little tough to swallow. I think that we have a lot of fiber. We've got a Vermont Electric Co-op. That was what I did, fiber swap. Hundreds and hundreds of miles of fiber from our electric company. Velco has fiber. GMP has fiber. That fiber has been paid for by the rate payers. I would argue that that's public infrastructure. Now Velco, their model is a separate for-profit utility, but I'd still argue we're paying for that. This gets back to FDR state. We pay for that, we pay for the rate payers. You know, that's, and so now let's get to the competition part. You know, there's no reason to overbuild telecommunication companies' fiber. For example, VTEL has fiber. Waitsfield Telecom has fiber. If the fiber exists, then the bandwidth, the capability exists. What I'm gonna, somewhere in here, I talk about this, maybe I don't, but I'll say it here. I think I hit it later on, but the point is, we're gonna treat fiber just like we electric wire. Your network connection is at the meter. So, you know, when we strangle electric wire, we didn't tell you what appliances to buy. You know, this is why I talk about this socially-owned infrastructure created so much opportunity for business in the home because people then went out and bought appliances and chose what they want. Same thing with fiber. Fiber responsibility ends at the meter and then it's open access for any telecom provider. So you could get a telecom provider from Australia if you wanted because they're basically going to pay for the use of the existing fiber infrastructure that's part of the regulated utility. By the way, that cost could be less than what we're paying for their rotting copper infrastructure today because we've driven the cost down so much. So I think we should make some clear firm requirements for broadband movements 100 megabits per second. That by itself will drive the adoption of fiber because there's not much other technology that can achieve that. And I'll talk about the technologies in a minute. Allow micro-trenching. That's just being able to pull, you know, fiber doesn't need to be buried four feet like electric wire can be 12, the AC should be below the surface. Require all the pole assets to be sold back to the utilities at the net book value for a variety of reasons. This is one of them. But also, you know, we got this dual pole issue that that would take care of. Accept electric utility fire from Make Ready Quarters. Talked about that in a test and encourage some pilot projects. Can we do that? Require the poles to be sold back to the utility? Sure. Where's it? I just like... I'm looking at see who's in the room. I don't know. Be bold. Be bold. Don't worry about the attorneys. Do I really know the yes and I don't? But, you know, figure it out. I know what's happening. You know, I think the Public Service Commission is encouraging. We... I actually sold our assets. We can encourage. Yeah, you can encourage. I don't know how far you have to go. Well, just my follow-up to that is, if they all went back to electric companies, they'd be taxed through the towns. And a lot of the ones that the phone company owns. So there'd be an additional tax on the electric company for those poles. Oh, okay. We can take that out of the electric rights. I don't know what you're talking about. So the poles are paid property taxes? Yeah, the poles pay property taxes. But I gotta believe the telecom people have to... I think the telecom people have to provide... I think that's going to be a move point, because it's all paid for by the cost of the infrastructure today. Anyhow, we... When I started at the co-op, I sold half of our pole assets to Fairpoint because we were desperate. We needed the money. We were kind of out of bankruptcy. And then regretted it for the next 17 years. And the towns lost money when you did that. I don't know the answer to that. So the telecom companies are exempt? Yeah. Okay, so just some final thoughts. It's a great case study. I think it's in Michigan, Midwest, Energy and Communications. If you want to look that up and see, you know, do the fact checking that I've been talking about. Here's an example of their costs. This is exactly what they're charging their consumers. 50 bucks a month for 25 megabits per second up in download. And if you want a gig, which a gig will do everything, you know, you can stream 50 parallel Netflix things at once. And you think about what people are paying today. You know, I think about what I'm paying, you know, over $100 for my direct TV bill. I pay another $50 for my Wi-Fi, and then I have no idea what I'm paying for my phone on top of that. But, you know, all of us at Roll America are paying more than that today, even for the highest speeds. Once you get speeds, you know, once you get these kinds of speeds, you don't have to pay a phone bill. You don't have to pay. You wouldn't, there's no need to have a cable system, because you can get it all online. And that's where it's headed anyway. You know, I do respect the activities of community. I want to talk briefly about the CUDs, community utility districts. But, you know, the problem is they're working under an expensive model today. You know, no matter how you cut it, the way we do telecom today, it's once you get below 12 customers per mile, it does not pay. You can't create a use case. No matter how good you are as a CUD, it's hard to create a use case for that. You know, I just say, we got to get to the core of the cost here. And I said the CUDs need centralized resources. There's $350 million in funding in the current farm bill right now. And it actually will, it'll actually pay for 90, up to 90% of the infrastructure costs for rural areas that are uncovered today. There's money in the Connect America Fund. The utility banks are willing to let up to 80% of the infrastructure costs for a well-run planet low-carbon cost. And I think, you know, my recommendation is put out an RFP for a good engineered telecom plan to make this happen. That's my presentation. 350 for all 50 states, or 350 for all 50 states? 350 for all 50 states, yeah. And that money keeps, every farm bill has money in it. So my point being, you know, get someone to go after that money and use that as part of the down payment infrastructure. And that money's available to providers, right? Not to the state. It's for providers, yeah. It's regular, it's available for regular utilities. Yeah, I would argue the state can't do this because it's, the model's too expensive. You know where, yeah. Yeah, I find this to be a very interesting concept. It's way above my understanding of how the technical issues would be handled and the, I don't know, the ownership issues would be handled and everything. And so I could see probably a study to be conducted by the Department of Public Service on feasibility and the, you know, costs and benefits of that. Yeah, you would actually recommend it. I'm not really sure what legislation we can actually, I mean, write on that. I would recommend the Agency of Commerce and Community Development through the study. Yeah. Are there, are there specific things that are prohibiting, you know, one level are prohibiting electric utilities in the state of Vermont from doing this? And then I guess an addendum question would be, would you segment in that prohibition if one exists co-ops relative to investor-owned utilities just from corporate structures standpoint? I haven't read enough about this to be knowledgeable, which means I've read headlines. But I know that there are some states that are working on freeing up the ability for co-ops to do just this. I haven't actually gotten through it. I mean, some states have, some states have it, I know. But in reading those headlines, what are the things that are blocking a Vermont electric co-op from doing this today? Well, I think, you know, I think there needs to be some legislation to help them do this, and I'm not sure exactly what it is. There's really, they could do it today, and they would, you know, if they, in fact, what, the CEO of the co-op was starting to look at this, obviously. And, you know, I was ready to push the board in the direction, and we would work with the, you know, as a co-op, we would work with the legislature to craft the right legislation to make it happen. So it is an issue, I believe it's an issue of will. It's, because it's happening in other parts of the country. And Georgia and Arkansas have done, have been passing encouraging legislation as well for this. Now, I don't think it needs to be restricted to co-op. You know, if you look at Greenmont Power, Greenmont Power is serving a lot of rural Vermont. You know, I think it's a rural versus urban issue. It's a fiber versus other issue. You know, and so, if I put my CEO hat on and my board of directors hat as a utility, you know, we're conservative. You know, by definition, we have to be conservative. You know, it's, the market can be pretty harsh, you know, for an electric utility. And regulators can be pretty harsh. That's why you need encouraging legislation. You know, if you, you know, it's got to be, it's, if you are, are questioned for, for your investments and, you know, we've seen it happen here in Vermont. You know, we almost put Greenmont Power on the business many, many years ago for, for investing in Hydro-Quebec. So, you know, it's, it's, so, you know, if you think about a regulated utility, by definition, if you step out, you get in trouble. So it's, you know, we're, by definition conservative business. So one of the, you know, we, we talk about fiber that, and 20 homes have access to it. But if the cost to connect is $5,000 to get from the street to the house, that's still prohibitive. Does, this reduces costs for the, the trunk line. Does it also, does it similarly reduce those connection costs? Yes, yes, absolutely. Today, when I'm pointing out today, we have a very expensive model today. And, and, and following some pretty expensive ways to do it. You know, there's, there's also been an, enabling technology in the past seven years that's allowed utilities to do this, which is called portable splicers that go up in a bucket. You know, some technology enhancements. But yes, today, currently, you know, the, the user has to pay. And, you know, we're, it can be very expensive because you're going to have to do all that make ready work. And you're going to put, you know, have a separate telecom company do it and they have to make sure that their cash flush. So yes, by definition, because very expensive. That's, that's what I'm arguing. Our model today is prohibitively expensive. What's the slope of company like Westfield, Champlain, Westfield, Telecom, Champlain Valley Telecom from contracting with, say, GMP to run fiber along its electric lines right now and then paying them for that. Well, I just, I'm not sure GMP would want to do that. You know, it's, it's just not, it's just not a business that I think that you're utility. I mean, eventually, you know, you'll probably see, this is happening across with co-ops, mainly across the nation. Because again, speaking for the co-op board, we, we made this a priority. We know it's important for rural economic development. Now the investor on utilities have made it a priority. So I, you know, that's nothing, there's probably nothing that's going to stop them, but there's nothing that's going to encourage it either. What about, what about Westfield, Champlain Valley Telecom contracting with Washington Electric Co-op? Well, they can do that as well. But again, the Washington Electric Co-op now has to make all the investments in the equipment and capital, so it's kind of like, you think about the first person that comes along had to pay for all this infrastructure and upgrade. You know, for example, Washington Electric Co-op ought to go out and buy the fibrous placers to get the line workers trained for a small population. So the cost for the initial start-up will, will again be placed across the Waitsville Telecom incremental users, which probably makes the cost prohibitive again. It's, you know, it's, it's, that's my point about trying to do this piecemeal. Piecemeal, the cost become high because you've got an initial start-up cost that that first person has to provide. This is why FDR, you know, signed the executive order saying we're, you know, we're going to, we're going to socialize the electric infrastructure on this. In answer, further answer to the question about obstacles and impediments, and I mentioned this at an earlier time, in most other states, electric co-ops and also municipal utilities are not rate regulated. They're subject to other regulation in Vermont. They are. So it becomes very necessary to figure out and probably need some legislation for this level of additional activity to assure that the, the costs and the rates are not commingled, that electricity is paying for electricity and fiber is paying, fiber customers are paying for fiber. I mentioned in Washington Electric Co-op, many years ago we explored getting into a sort of auxiliary energy-related business as well. And the biggest impediment was that we would essentially need to form a separate company in order to keep all of this stuff separate. And I also just wanted to mention, because I mentioned this to Representative Bergman earlier today, I saw the president of the Board of Washington Electric Co-op last night who informed me that that co-op board has in fact applied for some of the USDA. I'm not sure exactly for what. I'm guessing that it's more for exploratory research and planning as opposed to implementing it at this point. But that's a change for them. I'm going to take the chairman's prerogative to pull in a friend here. Hi there. I'm giving testimony later. I can talk to this in more detail if you want to wait for me. Yeah, that's fine. You've got to insert that later. And a comment such question I have on that point, and maybe it's a question for you as well, Christina. One of the advantages you've highlighted here, which I think is a real one and an important one, is a cost of capital advantage. And I question if some of that advantage melts away as these business models are segmented where one is more highly regulated, more utility-esque, and one is segmented out as a separate business model, maybe under a separate corporate entity and cannot avail itself of as inexpensive capital as maybe the electric utility. Just a thought. I'd like the idea to be a challenge. You've got to get a punch line. So I'm wondering, to what extent do utilities need to run fiber anyway to manage the networks in the future of distributed generation and micro grids and all that? I don't know the answer to this. I'm just wondering if there is a synergy there. Well, there may be a synergy. I certainly wouldn't want to predict that. I know with Vermont Electric Co-op, when we chose our smart metering system, we chose the power line carrier because the expense was low. By itself, there may be... I don't want to speculate too much about the future and what it brings. There's so much that depends on one of that being how America... Right now, America is headed the other way of building carbon rather than taking it down. So if America does push for 100% renewable, 100% of the time, then we're going to need more reliable connections. But that's not the direction our country is taking right now. Our country is drilling for more oil and doing all this other crap. So there's a lot of political dependencies there on whether you need that kind of bandwidth and reliability. You know, Green Mountain Power currently has an RF system. You know, RF is pretty unreliable. Actually, there was an article about in Georgia yesterday where they replaced their RF system with fiber in one of these dangerous quarters because it was unreliable. Radio frequency. Cell phones. Cell phones are radio frequency. We're reading the meters. No, for actually getting weather data from on top of their mouths and providing broadband through this interstate that 80% of their... Well, it's a smart grid. Is fiber required for a smart grid? And there's a smart grid part of resiliency that even a small state like Vermont would want to build into its system anticipating more weather events. I... We're... Vermont is two tenths of one percent of the national population. We're one tenth of one percent of the electric load. You know, it's... You know, do we... I don't know. It really depends where the country's headed, right? You know, it's like... Yeah, it's just... Okay. Any other questions for Christine? If you're talking about not doing any overbuild but still utilizing that for a smart grid, do you have anything on the plan about a cooperative agreement between the carriers that are covering everything that's already built that the electric utilities would have right of access for smart meters or anything? You're talking about cooperative relations with existing telecom carriers? Right. Yeah, we've worked with telecom carriers all along to do fiber swaths and get more fiber. But, you know, with no real long-term financial agreements. Okay. Of course, you know, just like any other business, you know, you pay for data connections, you pay for reliable fiber connections, telecom connections. But I wouldn't say that's any different than the other business, except you might need more. Great. Thank you. This is very interesting. Thank you. Thank you. Thank you. Good luck. Mr. Tomei. Thank you. I printed out a copy of my testimony from my own use. I know that you have it. I don't know, but I might want a map up there which wasn't in the printed stuff. Can you go to a website and bring up a page? What would you like? Well, it would be ecfiber.net. And then I think it's called flash map. Mm-hmm. Right. Good afternoon. For the record, my name is Irv Tomei. I have been a resident of Norwich since 1975. I thought I retired in 2006. In 2008, as ecfiber was getting organized in the spring of 2008, my select board appointed me to represent our town on the governing board. And then a few years after that, somehow I became chair. Well, I won't go into how it happened, but I didn't ask for it. But since the chair served for one year term, we hold elections in May, and I have been re-elected several times since. Mm-hmm. Okay. Last week, it appeared to me that at least some members of the committee might like to have... Yes, that's the map. Thank you. That's right. Some members of the committee might benefit from an overview of what a communication union district is, how it's formed, how it operates, and some of the advantages and potential limitations of a CUD. And so I've called my presentation Communication Union Districts 101, CUDs 101. Before I start, I want to say that I... And we'll probably get back to this in a later discussion, but I need to gently push back against some of the things that Christine Hoplitz just said. Our current bonds are 25-year bonds. We currently depreciate our fiber optic infrastructure over, I think it's 30 years. And we currently offer the speeds we currently offer. Each... We offer four service levels to our customers. They are all symmetrical. That is, you get the same speed up as down. The upload speed is what you need to do serious work wherever you are, interact with the rest of the world. The commercial entities emphasize the download speed. That is an emphasis on entertainment delivery. It is not an emphasis on economic development. We offer 25, 25, 50, 50, 200, 200, and 700, 700. Anywhere in our territory. And the map that's on the screen behind me, it's an interactive map, but it shows where we now, except for the bright green, the bright green lines would be where we plan to be building this year. This is where we now have service within our town. We started with just 25 miles. We now have 685 miles of fiber optic cable and service. That includes more than 100 miles of leased dark fiber that is owned by the state of Vermont. It was built by the Vermont telecom authority. And we have more than 3,200 customers connected in now 22 of our 24 member towns. Parts of. In some cases, the entire town is sure. Did you say 685? Over the last 685, some of it is owned by... Some of it, we have long-term lease on fibers within a bundle of cable that was paid for, constructed by the Vermont telecom authority. We have a long-term lease. And the VTA cables. This is another digression before I get started, but it's important to understand. Most fiber infrastructure in this state is either long-range or so-called middle mile. It's analogous to interstate 89 with an exit ramp here and an exit ramp there. The VTA dark fiber infrastructure was designed from the outset to be usable also to deliver service to the premises it passes. Think of it as Route 2 alongside 89 between here and Burlington. And that all happens in a single cable that's about the thickness of somewhere between my index finger and my thumb. Because there's 144 fibers there. But the fibers are grouped in bundles of a dozen. And so some of those fiber bundles, a dozen at a time, can be leased out to end-user providers, such as, in our case, an EC fiber or any other entity. Others are leased to companies like Fairpoint now consolidated to get their data from one town to another town. Most of the fiber on the electric lines is not already designed for one service along the way, so it's not a trivial idea to branch off. But that's a detail. Okay. So now let me talk about communication in districts. CUDs were created by the Telecom Act of 2015, Act 41. And a CUD is similar to any other municipal union district like a solid waste district or a water district or even a school union school district. It's a composed of multiple towns that have all voted to be part of it. Each town has representation on a governing board that sets policy and budgets and so on. In a CUD, each town's delegation, if they're present for the meeting, gets one vote regardless of the population of the town they come from. It's very egalitarian. It is because it's a union district. The wonderful phrase in the legislation is a body corporate and politic. It's a wonderful phrase and basically it means a union district is a virtual town. Under state law, under Vermont law, a union district of multiple towns is in effect a virtual super town. And in the sense its governing board is analogous to the select board of an individual town. CUD has most of the customary rights of powers that any town or a water district or a sewer district would have, or a waste district, except for two things. It doesn't have the right of eminent domain. That was in the original draft and I said, no, let's not have it impaired because it will make a lot of potential voters potentially unhappy and we don't really need it. And two, and this reinforced prohibition that was already in state law, that CUD cannot be supported from property taxes. It can't be supported either from tax money contributed by its member districts nor can it levy a tax rate of its own on its member residents. So that is a huge difference from any other type of union district in this state. It can only borrow against future revenues and when it goes out to borrow it has to make it clear to potential blenders or investors that if it goes down ultimately they might be able to take over ownership of the network it's built but they have no recourse against the grand lists of the member towns. So it is, it cannot encumber its member grand lists. I want to clarify one thing that you said. My sense is that CUD's, the financing has generally been revenue bond driven. It is revenue bond. But you said, is there a prohibition against other type of borrowing by a CUD and other assets that... Well, it could borrow against its physical assets. It simply cannot borrow against the grand lists of its members. I would actually push back gently against one thing that Ted Brady said last week. He said we assume that the fiber on the poles has no net value and I don't think that's true. Once you've got cables drawn on poles you do have an asset in the last analysis. If a CUD were to go bankrupt then some entity would be glad to pay but look up in Burlington. We have many differences. Our structure is very different from Burlington. We don't have the same risk exposure to the citizens of Burlington head there but when Burlington Telecom did go bust ultimately, although maybe only 30 cents on the dollar was paid, a commercial firm was happy to buy that last recourse. So why would you want to have a CUD? Well, I don't have to tell anybody but our towns vary enormously in disposable income in population density in all kinds of demographics and it costs about the same per mile to build telecom infrastructure regardless of how many people live on that mile of road and how much money they've got. When you pull together many towns you have economies of scale in many ways. First of all, you're going to be picking up areas of higher concentration of customers and lower concentration of customers so that your average population per mile makes a workable economic model and then incidentally we aim for an average of five customers per mile which is quite a lot fewer than Christine Holquist was saying this sir. Probably you'd like to have an average we think that in our territory we've got an average of 14 premises per mile we aren't expecting instantly to pick up 100% take rate and five customers per mile works for us. No, she said 14. She said more than that. Just in five customers per mile working for you are your rates, do they have to be approved by anybody else? No. Telecom infrastructure is not of this kind is not regular. It's very distinct from telephone service. Telephone service is highly regulated. Broadband connectivity is not regulated basically not hardly regulated at all. And when you, I mean I'm assuming that if you extend the line with I don't know 10 customers on it that that helps that that look lowers your overall per customer cost. Of course. And we may another CUD with a different different borrowing structure I'll come back to this later about how our early our early stages left us with more debt than a new CUD might have to have. But our base rate for that 25, 25 service is $74 a month. We offer telephone on top of that through a technology called Voice Over Internet or recall the OIP. It's digitized phone pre-calling anywhere in the U.S. or Canada except maybe Hawaii and Alaska I'm not sure about that at $20 a month extra. That part is slightly regulated and is taxed. The Internet part of it is not taxed. So our average revenue it's another 25 per month added to the 74 if you want the 50-50 rate. And some people take a higher rate than that. Our average revenue for residential customers now 145 dollars a month. And I don't want to misdirect you here but based on some earlier discussion we're having today is that $20 on top of $75? Is that an accurate breakdown of actual costs or is that... Most of that $20 to a third party that manages the phone service for us and delivers it through our network? So I'm not qualified to tell you precisely the details. Maybe I should explain right now I was going to cover this later. The district East Central Vermont Telecommunications District does not itself have any employees. We have a contract with another entity that ValleyNet it's called that has a lot of telecom expertise. They have the staff. They have a staff of about 20 and they provide customer service. They provide installation. They manage the people we contract with the string of fiber on the poles and various other services. And they pay the bills of the building. Ace I had a head of myself on that. I was speaking of economy of scale. I had a conversation I will do not mind representative Sherman we had a conversation last week. And you were speaking of Stowe's strong interest in maybe trying to go it alone. No, I don't want to put you on the spot. A question. I don't mean to put you on the spot. It is a reasonable question for a town with a lot of resources to ask. I think that the outskirts of a town even a town that is very prosperous at the center. The outskirts of a town may have more in common with neighboring communities than with the center. And when you design a network from the beginning to serve a larger area you can lay out your routes for efficient service and deliver the service with the minimum mileage of cable and efficient branch points and so on. So that's one of the advantages. Another advantage is as I was saying to that Vermont Digger reporter who interviewed me last week Vermont Vermont is full of oddities and one of the oddities is in the middle of a town poor. You may find somebody who is not poor at all. We all know this. They don't dress different Vermont. I'm proud of that about Vermont. But there too if you have a few people sprinkled across this area who have the capacity to invest in some way there too the CUD multiplies the effect. And the CUD because it's a municipal entity can borrow money at much lower cost than the private entity can. Now I see Jeff Austin in the room. He works for Consolidated. We aren't there to compete with Consolidated. Remember we came into being because big telecom big phone company big cable companies didn't want to touch rural areas. The density wasn't high enough to make the profit margins shareholders would like to see. And people in the community came together and said what can we do? Let's organize to try to do something. The CUD is the second evolutionary stage of how we get started which I'll come back to in a few minutes. So but these are some of the advantages of combining together. Let's see have I said if I covered what I wanted in that paragraph I believe I have. Operating a wide territory as a single district makes it possible the service levels I just mentioned you pay the same for that service level no matter where you are in our territory if our fiber cable goes past your door and you want $700 $700 you'll pay the same for that as the person in downtown Norwich or downtown Woodstock or Randolph-Wetzly not in downtown Woodstock. And I was also talking about the outskirts of a town. You know the term Donut Hall was used last week and some asked what does that mean? Well if you look at a town from the point of view trying to provide services economically in the very center town you get a high population density and for the bigger towns you've already got pretty competitive market there for service. You may have a phone company and a cable company competing with each other there may be more than one of them. You get a little farther out and you have a group of customers potential customers who maybe they're pretty close together still but they're not close enough together enough that corporate interests have been able to have taken them on and those that's a Donut Hall around the center high concentration but rather it's a Donut around the Donut Hall is the center it's a Donut surrounding that center where it can be highly economical to provide service and again in a regional approach that higher density population helps to balance out the more the lower densities farther out. I included at this point some comments about CUDs advice perhaps to would be CUDs one obviously when you start building you want to build where there's high demand and that does not mean that you want to start building in the middle of your highly populated member towns because this competition there already people are already served they're not as hungry for broadband service as people who haven't got it yet and know how badly they need it recently over the past year in months with good weather we've been able we've been connecting 100 new customers a month and that's happening because we've been choosing where we build based on people can go to our website they sign up for service we look at where there's a high demand we chose to build 6 towns to fill in 6 towns border to border in the construction year 2018 we chose to build in border to border another 6 towns in 2018 17, did I say 17? 17, 18 we have announced 4 towns in border to border in 2019 together with an additional 80 miles in selected neighborhoods of larger towns the emphasis on how many people what percentage of the whole town signed up actually disadvantages a big town whose center already has a lot of service so we're also recognizing neighborhoods that aren't served and some of those are within a single town some of them overlap borders of two if you know the upper valley near the Connecticut river there's a neighborhood that's called Jericho that's partly in Hartford and partly in Norwich and doesn't have much service at all okay all the members of the CUD do not have to be contiguous with each other but it works a lot better when they are originally when we were first forming 11 years ago Montpelier joined we haven't yet figured out how to deliver service to Montpelier we are very glad that Central Vermont internet has Montpelier as a member because we think it's going to make a lot more sense for the CDI of CUD to deliver service to Montpelier than we could and I already mentioned contracting with we contract with ValleyNet but nothing about the CUD certain statute says that the implementing entity has to be nonprofit I could imagine a CUD contracting with an independent telephone company or even I don't know even with the big telephone company because provided you know there are enough protections for both parties there the CUD being municipal may be able to borrow money at a lower cost than the small phone company could and so they both benefit the phone company gets the capital with which to upgrade the network and the residents of the district get the service ok now I will pause for questions about structure before I proceed to talk about specific challenges ok now I want to talk about make ready about this morning from my friend and colleague Jim Maslin who is a member of our executive committee and I hope that I won't bore you by being repetitious here you already know that there is under PUC rules under federal as well state law a series of utility polls along the public right away is the public good so a bona fide communications entity can apply to put their cables on the polls and pay rent the rent rates are regulated by the PUC the rental space but before the new entity can go on the poll typically cables may need to be moved existing cables may have to move to make room for the new government it is also possible if the poll isn't tall enough that moving the cables around to make room for the newcomer would mean that the clearance underneath the lowest cable would now be inadequate to the ground so the newcomer may have to pay for a whole new poll replacing the poll unless the poll was already not tall enough the polls were hanging too low in which case the newcomer doesn't have to pay for that one either way the poll has to be replaced with apologies to my sometime friend in Vermont at least in our part of Vermont most of the polls are jointly owned by the power company and the phone company this intrinsically creates accountability now the two entities jointly owning these polls have agreements town by town for this town if a new poll has to be set this guy is supposed to set the new poll if in this other town the other guy is supposed to set all the new polls when new polls are required you need to know that first so what's the process we lay out our plan, our room we identify up to 200 polls that perform a logical sequence along one or more roads we send in an application with a per poll fee this is according to the PFC procedure, defined procedures and the company has the companies have 60 days to get back to us with a quote for the cost of preparing that set of polls and this involves a survey a survey or write out as it's called is engineer from each company one of our engineers too they get in the pickup truck together and they go out and stop at each poll I got to move that that one's okay and they take notes and that data goes back to headquarters and in due course we get the quote now we need to pay the quote in advance for the work to be done now typically not all the polls need any work done and most of the time the work that needs to be done is some cables need moving that's all but sometimes a new poll will be needed for our 2017 build there were about 6400 polls involved in building about 250 miles 23% of those polls needed some something done according to PFC rules when we have paid the work is supposed to get done 20 days 14% of those polls actually got done by all the parties involved 360 or more days after we paid not 120 I have a quick question with the massive amount of building that EC5 was doing in a certain amount of time is there typically constraint in the system to deal with a certain pacing of the PFC rules allow more time if the number of polls involved exceed a certain percentage of all the polls in the state that entity owns the total number of polls that needed work was well under the maximum that would get more than 120 days allowed it looked from our side as if neither company was responsibly planning and scheduling the work we realized that they have limited crews now I want to jump ahead I've got something that is critical but I want to acknowledge right now that in the summer of 2018 we got much better cooperation from the telephone company than we did from the power company rather late work was typically the power company not the phone company so things changed around in 2018 relative to 2017 but we had a series of unfortunate events in 17 we already had applications that were well past what we paid when we got to September and finally filed an complaint with the PUC there are no enforcement procedures except to complain to the PUC we're upon to their credit to phone company folks immediately said this is awful we didn't want to be in this situation we will do everything we can to get all of our work done by the end of October now they already had done a lot of their work they had moved their cables they just hadn't set the new polls that the power company needed to do their part of the job so at the end of October they said alright we've got them all done but unfortunately when the GMP crews got out there and the GMP crews didn't go out right away because they'd stopped waiting for the work to be done I think but they went out there in December and six of the polls that had supposedly been replaced hadn't been and I don't know who I mean I'm sure Jeff told us the truth but somebody told you things that weren't true so everybody involved has agreed that was terrible and I really want the credit consolidated has been a much more cooperative and helpful partner but it's a mess and it's partly a mess because joint poll ownership creates diffuse accountability when we discovered this problem I'll tell you the truth we realized when we pay for our work to be done within 120 days and it goes beyond that we're making an interest free loan to the poll owners until the work is done we're not going to be able to string our cable and realize any income from customer service customer revenue until we can get on the poll so one way to approach this would be couldn't we get one and a half percent a month interest on what we've paid until the job is done but the Department of Public Service has a much cleaner solution which is outlined in the telecom plan and which they've already moved by petition to the PUC to try to implement and that is if the work is late the applicant should have the right to engage a third party contractor to do the work which we get paid for out of the payment that's already been made to the utility companies and this would be a major breakthrough from our point of view we hope this will happen the bill that as drafted age 53 as sorry, age 93 as drafted makes reference to the main utility commission's rules at the time it was being drafted we didn't know how rapidly our own department would move to file a petition with Vermont PUC but over in Maine they instituted that kind of rule about a year and a half or two years ago and since they did it hasn't been necessary to resort to it once and that's despite the fact that at the time not only did they put that rule in they cut back the amount of time allowed from 120 days to 60 plus a couple of 15 day extensions so I've got a question on this payment that's been made would that be held or is it now held in like an escrow account I have no idea they don't who do you write the check to we write the check to the company we write a check to Green Mountain Power we write another check to consolidate it right now they may tell if the dispute arises about whether they're late then they may tell us when they think they got it it would be good to see a provision this isn't mentioned yet anybody's draft rule but it would be good to see a provision that says if the company acknowledges receipt that establishes the date in the absence of documentation then the payment is assumed to have been received either five days after it was mailed or when it cleared the bank whichever it was soon but you know similarly the clock doesn't start ticking until they've gotten any necessary permits from the agency of transportation to cross the highway or something like that well wouldn't it be good to encourage them to document when they filed up for that permit when they got that permit then everybody's on the same page everybody can see there's need for transparency and accountability and the system doesn't have either right now some of this will be controversial I'm sure and some of it should be pretty straightforward I guess the other question I've got is do you think there's enough 30-party 30-party construction folks out there to do the work well that is a good question right now the companies are required to maintain lists of 30-party contractors who they consider competent to do the work we get a lot of our work done a company based in Northfield called Eustis Cable E-U-S-T-I-S and except when there's major storm damage and Eustis is all over Northern New England trying to help repair it Eustis seems to have crews in the present labor market qualified line people are somewhat scarce we know that over the past few years the phone companies laid off a lot of field staff so they are somewhat staff limited but if they're going to accept the money for the make ready work oughtn't they to be providing enough staff to carry it out so that's my take on the topic of good I hope I haven't been too teachers about it so did you feel early you've covered your I'm looking at the fourth page of your testimony which I think focuses mostly on funding and I just want to just being attentive to the clock in your time and our next good now this has been terrific I want to be clear if you have more testimony to give covered I want to talk about funding and I don't know if I can go right into that now take Jeremy and then let me come back about funding I don't know why don't we give you a few minutes to finish up on funding we've got a couple of questions it's relevant so I just wonder what your take on Christine's idea about having electric utilities run the fiber in that 40 inch space if the fibers run in the 40 inch space in the power space as opposed to communication space the crews that do that work will be much more highly paid crews so I'm skeptical about the net savings because it's not just running the cable it's making the splices in that space for all the feeders the fiber cable feeders from the main cable out to each premise and I think cost is going to mount up that way and I am skeptical I've been told that some of the electric co-ops that are deploying fiber cable in their territories are actually doing it in the communication space despite the apparent advantage of going up in the power space they're actually doing it in the communication space they found it is simpler and more straightforward to do down there so I move all the all the other wires down so the phone will be connected to the bottom alright there was one other point about I made a note to myself about that oh the money available from the agriculture department are we moving into financing now? well this is a sidebar to the financing why don't we take another 5 minutes and then we're going to invite Jeremy okay the money available from the agriculture department not much of it is available in Vermont because it comes through the rural utility service and the rural utility service will not make any grants for territories supposedly served by some other grant though they've already made enough said? alright okay alright funding as a municipal body once the CUD has positive cash flow and attract regular steady growth it can go into revenue bonds in the municipal bond market of course the question is how you get to that stage now how we got there wouldn't be practical for anybody else to do and we wouldn't recommend it we had the good fortune 3 years after the credit meltdown of 2008 we had the good fortune that 3 people wanted to fund a demonstration project well by definition that happens once so we had we started with expensively borrowed money no payments required for the first 5 years interest was getting capitalized at 11.5% but that got us off the ground we built a 20-25 this is before CUDs were defined we built a 20-25 mile loop we started serving people along that roadway along the side road said what about us so we started offering promissory note funding in multiples of $2,500 and over the next few years we got more than 450 distinct investors including that first 3-4 million we raised a total of $7 million then when the CUD we refinanced out those loans but our total debt load right now only includes about $2 million from the high from refinancing prepayment penalties and so on that original money so now we look at this proposal from the administration and we think it's a very excellent idea because it's true at the outset you have nothing to collateralize at the outset you haven't got credibility with the bank these are not bankable loans and they're not they're riskier than conventional loans they're not extremely high risk but there's a possibility of failure now in states states are often more willing to make and federal government too more willing to make grants than loans if you're going to make loans a few of them aren't going to work and most of them are and you can use it again aren't you better off than with the grant that went down the drain and yet the body politic as a whole is all too ready to be excited by cheap shots from a reporter who says look this loan went bad these government officials did a terrible thing we've all got to think about that but I'm not saying that the loan fund that the administration proposing is high risk now I'm saying it's an excellent idea I think funding 90% from Avida Loan and asking the communities involved to put 10% of skin in the game is a very good balance but I say that that 10% ought to come from private sources local private sources not from public not from taxation and that's the last thing that I want to talk about I first now this is a strong personal opinion actually the first half of this my whole executive committee agrees with me about it the second one they may but it's my opinion alright the first point is that capacity to pay with property tax varies a lot but it's typically low in rural cities if there's any possibility that joining in a CUD is going to mean a hit on your property tax remember this is municipal property tax it isn't even income sensitivity adjusted for most people then it's going to be much harder to pass the vote to join that CUD I think that's a significant drawback but the second objection that I, oh I said I live in a very rich town by some accounts no which is the richest town of the state I am proud of the fact that the restriction against using local tax kept my town from building broadband years before anybody else I'm proud of the fact that the restrictions forced towns like mine to band together and serve a whole region rather than just themselves now the second concern is a taxpayer equity this is my personal opinion no I take a back seat nobody on the importance of broadband I loved it I practically cheered when commission attorney said broadband is the connected tissue of the body politic yes that's true but I look at the old farmer with a lot of land who doesn't expect to use broadband at all and I just think it's wrong that that poor guy is going to end up paying more in his tax bill than the young professional with less land who is really going to use it I want to be sure that the way we fund I want to be sure that the way we fund this public service is paid for the people who are by the people who are using it not by the people who aren't one question have you seen any appreciable increase in property values in EC fiber territory yes and conversely we have seen that in areas that don't have it property values have dropped 10-15% and so would property values go up property values not necessarily not necessarily not necessarily not necessarily it's more of an effect that it takes a lot longer to sell a property that doesn't have property I'll be more pointed at when in towns that you have a successful deploying fiber I'm presuming that the value of the farmer's property who you go by but doesn't use the fiber also that's probably true and that's enough of a hit and pause on that guy already isn't it well the question is just question whether or not his property taxes go up his property rate may go down but value only goes up when he sells it I mean it only matters if you sell it if you lose money in the stock market when you sell but it makes it more valuable in that it makes it more sellable but it's only the money only is realized if it sold it's going to be an interesting discussion it certainly is but I think we my last summary statement I think we have proven by our success that this can be done for a moment and we got started in the teeth of the great recession thank you Jeremy if you want to join I'm going to stand up and stretch thanks Jeremy Hansen I'm from Berlin I'm also on the Berlin Select Board I'm a computer science professor at Norwich University in Northfield I teach networking and security and a lot of other stuff from two different angles as a municipal official who's heard a lot of people complaining and has had this conversation about property taxes and I can't sell my house and I can't do my work from home but also from a the point of view of a geek who knows how to build these things and has been professionally responsible for managing these things in the past so last year a bunch of towns in central Vermont helped create something called Central Vermont Internet and other communications union districts inspired by the success of EC fiber and we recently started doing business as CV fiber sort of a rebranding we're currently at 16 towns including Representative Pat's territory here in Montpelier and actually Representative Jessup's territory as well we're going to 17 with Woodbury joining us next week it's also my territory and it is also your territory that's why I mentioned it so we have a lot of excitement we have a lot of folks in central Vermont so Washington County, Lamoille County and Orange County a lot of different kinds of towns we have Berry City, Berry Town Montpelier which are rather different than Roxbury and Elmore and Woodbury but it's part of our mission to serve all of them as a public service we are the EC fibers model and this idea of five or six per mile is something that we have a guy on our board who represents Calis and he's a GIS expert and he could show us the segments of roads and how many people on that segment of road in the density and it's totally doable and it looks to be doable in almost any town in Vermont frankly so we're in a much earlier state than EC fiber I'd say that Irv in particular and EC fiber in general has been extremely extremely critical to us getting as far as fast as we have it's in our plans in our budget to build out our first pilot of roughly five or six miles by the end of this year and have people turn down by the end of this year whether that's too aggressive or not remains to be seen but we are moving forward as if that's the case I have a question for you there Karen and I don't want to knock you off of course but in terms of ever being critical to where you've gotten to at this point is it looking at the template that they have created and how they moved in their history is it kind of direct help that you've gotten for them and some of the granular issues you've got to work through as you're building this business but both of those when I learned about what they were doing I just tried to digest as much as possible about what was publicly available to Irv and I reached out to their CEO Carol Monroe they came to the first meeting I brought a bunch of folks together in Berry City municipal officials other interested folks and said this is my vision I want to make an EC fiber here in central Vermont and everybody was really excited the reason I ask is I'm interested in the replicability of this understanding that different regions, different towns are different of course they are but at the same time PC fiber can do it if you find things in their business plan and model that maybe some work maybe some don't but where are the seven other places in Vermont that this is a replicable is what I'm really interested in and actually next on my list of things to mention to I'm not going to directly counterpoint some of Christine Hallquist's points but there are some things that I want to comment on so Kingdom Fiber is looking at basically using this a similar model really starting in Craftsbury roughly the same target for the number of people per mile and they've already turned on people Craftsbury like in the last few months that's a private entity and the guy that runs Kingdom Fiber is actually the representative for Plainfield on our board so he's actively helping us and is also showing us what are his finances look like how is he doing you know what's his business model and he's sharing with us his insight about specific hiccups including pull attachment which I'll get to in a second that he's run into and that's I think having you know having Irvin E.C. Fiber as a resource on one side and Michael Berenbaum and Kingdom Fiber on the other as two completely different ways of going about this is really is both inspiring and really helpful so when we come and we come to our monthly board meetings when we have 16 people sitting at the table and talking about this we can reasonably quickly get the answers that we need to go forward so I think the CUD model is a winning model and I don't mean to sound aggressive or cocky or anything like that but if the legislature decides to do nothing I'm still going to go forward with this we will build Central Vermont it's just that we build it much slower and more on an easy fiber timeline where we will have to look more at promissory notes and other sources of funding that we could do this much more efficiently we could do this much more smoothly much more cheaply for the public good I mean we are a public entity looking to do public service I'm sorry I'm going to have to step out in a few minutes and I know your time is really valuable I appreciate you being here and I'm sorry but Tom based on what you just been talking about and the replicability that the chairs were referencing could you see in order to help other places in Vermont what about some sort of a technical commission or you know a place for a more formal place for prospective CUDs to come together did you talk about like have you ever thought of like what would be great if there were some sort of technical work I would love to see that and I'm sure I've already advised people who are right now looking at forming CUDs there's one down closer to you a bit to the north though we're looking at doing the same thing with surrounding territories and I essentially just throw them my big bucket of documents that I collected as I was developing and kind of spearheading this and putting this in front of select boards and city councils and saying here's how it's going to work I mean I'm not going to promise that I have a business plan down but that's something that we're budgeted for building this year but no I could definitely see getting stakeholders together and saying here's how we did if here's kind of the general trajectory and I know I've seen some materials from you that sort of has a nice graph of like here are the responsibilities that you sort of need to solve that these are the things that you need to solve before you actually go and build and turn people on and I think that would be that's really valuable you know be really valuable. Something Christine Helquist said that I really did like is the notion of a broadband manager and I don't know that ACCD is the right place for it probably DPS with Clay Purvis or funding them so that they can be more involved in the process and they've been super helpful to both ACCD and DPS in getting us moving forward with this in in different ways so I don't know if that answers your question. That's helpful. Can we continue though when we can get another five minutes? I'm sorry. I would just say I like to tell people we're glad to tell you about the mistakes we made so that you'll have to find your own. I totally remember that so I said we're going to look at building a small pilot this year this is so right now we're actually collecting contributions charitable contributions so we'll give you the shakedown pitch right now but it is tax deductible just say but it's on orcas if somebody's watching you anyways we are also in the process of developing a partnership with WAC and there was a comment before about Washington Electric Co-op going out and seeking grant money essentially to work with us in partnership to build a feasibility study business plan to look at does it make sense for them to get involved we also have I'm waiting to hear the results of whether we got an ACCD grant to do the same so we're looking at doing surveying business plan development feasibility study soon but we're going to be working together with WAC to try to do that and as much as possible work with them and sort of push our mission and their mission simultaneously because I think there's a fair bit of excitement over on their part without any legislative stick required and WAC is aware of their need for fiber both for smart grant and some of these other applications that are out there there's one big benefit to working with WAC they own all their own polls they're not in that situation where you have dual poll ownership and if they're on board with making this happen it's that poll make ready process is super fast super fast comparatively I would say so yeah so that's exciting and part of my job I mean as in my day job part of my job is to look at the future so I do spend a lot of time thinking about what Vermont looks like 5, 10, 20 years down the road and I think WAC is coming to that same realization that it's not necessarily going to be business as usual for a number of reasons whether that's how they're dealing with renewables or how they're dealing with balancing power requirements or being able to turn off smart appliances at certain times to smooth out loads or deal with electric cars or batteries or these sorts of things you know do you need a gigantic huge pipe to do it? Nope but future applications could and this could make a lot of things easier I think one of the things that we're running up against is in order for us to really qualify for municipal loans we have to have a certain number of years of audited financials so actual revenues and actual expenditures so we're looking at at least three years before we can even go after those revenue bonds so what do we do for those first three years hope and pray we're going to have to look at promissory notes or some other mechanism so this bridge funding getting us through those first three years the first five years or whatever is really really important and one of the things that I would like all of you to think about making that available we have very motivated communities but not all of our communities have the money to for us to find donors that are going to write us checks that add up to millions of dollars we're going to build something that's in the first year that's going to cost less than half a million dollars but we're going to build something if that's how we have to start then that's fine I was going to kind of pick around the nipple around at the edges we're not sold on building in the electric space there's some technical feasibility issues that we've heard or addressed that we're also rather concerned about the cost of putting the linemen that are working at the electric utility those much more expensive technicians to do that and so a scenario that we envision is so imagine there's an ice storm and it takes down some lines what are the linemen going to prioritize if the utility is managing all of those lines outage they're going to turn people's power on first they then going to go back later a few days afterwards and then reconnect the fiber optic cables I mean is there going to be a delay and that could be that could be really terrible rather than we could have you know line workers working for the utility restoring power service and then folks working for the internet service provider going and repairing the fiber optic cables it doesn't have to be an either or sort of thing it just makes the complexity of their responding to excuse me their responding to emergencies more challenging and more expensive and take longer because there's more stuff that they have to worry about so that and that kind of fiber that lives up in the electric space is not really the kind of fiber that makes fiber to the premises fiber to the home fiber so I think you know looking at the telecom plan that came out of DPS I think addresses a lot of sort of where we are in Vermont and give some good policy suggestions and I want to talk about talk about some of those too and also address some of Christine and Irv's comments redeclering broadband I mean like real broadband as 100 megabits per second I think would be a great step forward because it's completely achievable with more than just fiber technology but fiber makes it easiest one of the so I'm new so when you're saying that are you talking this 100 up and 100 down too or just one way statute says 100 up and 100 down is where we're going to be by 2021 so if that's something that we're at no I know I know I mean if that's something that we're really at seriously then yeah it's going to be symmetric it's going to be 100 up and down so the symmetric is not something that anything really other than fiber can do so cable can get close ish with some really some of the really new cutting edge cable technology thanks looking at so we're a municipality so I'm going to on the select board I'm required to release meeting minutes so we're required to more meetings as a communications union district we have to do the same we're also we also have to abide by if somebody makes a public records request we are obliged to provide those things and it's not terribly clear when we have some of the things that would be to our competitive advantage so we're in this interesting thing we are a competitive entity that's also a public entity we don't have really anything else like that in Vermont so it's conceivable that we could be asked to provide as a public records request something that could be damaging to our ability to compete so I think looking at potential solutions to that you know some way that we could perhaps say we are declaring this as our as our governing board we're going to say that this is competitively sensitive and is not subject to disclosure or maybe there's some other way of carving that out so that we're not compelled to provide those things and I want to say that as somebody who does a lot of research in privacy and you know openness in government in my research and the things that I do I don't say this lightly this is not something we're like yeah we'll just add another exemption to the 150 or so that are out there I mean Jim Kondo would beat me up that's not this is probably going to be a requirement because if it's if it doesn't come out it's going to be settled by the courts and I'm not sure that you know we've got $5,000 in the bank right now probably don't have to do the math to figure out how that would work out if it went to court that is getting access to good data about where the polls actually are I think that's important that's a conversation that someone else on my board are representative from Calis who is he's down in Senate Finance he was talking about that just as I came up I think there's some good things that we could do to make sure that we know where the utility polls are that there is some good data out there in the Vermont Center for Geographical Information System that we can put that together in that way people like me when we're going out and doing these feasibility studies that we actually have reasonable data and that we actually reasonably understand where the polls and where the lines are I don't really care that much about where exactly all of the network components are it's not really useful but knowing where the cables are where the polls are that can help us more quickly decide where the best place for us to start where the best place for us to extend our network into where that's going to be Christine also said something about prohibiting overbuilding where there's already fiber I am very skeptical that you can compel any private entity to force them to open access to their fiber so I'm expecting I'm expecting that we will be overbuilding with fiber and I would respectfully request that you not touch that because there are places where we have to build fiber because that's the only way that we're going to get from you know that's we're going to get out all the way out into by Lake Elmore where we have to swing back over through Morristown to get up there there's already fiber in Morristown we're going to have to overbuild it in order to get into Elmore for example I want to mention that we actually are about Stowe so if Stowe if the Stowe Select Board decides that they want to apply to join the district that is certainly within their own possibility it might not be a terrible idea just saying yeah we've got a couple of good assets in Stowe all right as I understand it there's some new federal funding coming online through USDA I literally got a call from them on the way over here so I'm excited to hear what that's going to look like I'm not I don't know anything about it so what's blocking co-ops from doing this today I don't know that there's really anything blocking co-ops in Vermont from doing this today co-ops are as Christine said co-ops are rather conservative and totally makes sense but I think the writings on the wall and I think the co-ops are starting to understand that getting involved in this process is getting a seat at the table is an important step to making again to hitting their mission and whether that's WAC or whether that's that Velco or Vermont Electric or whatever I think all of the co-op utilities are recognizing this I'm just going to wrap this up saying the administration's proposal I think is an okay start but unless there's actually a reasonably large reasonably accessible to communications union district revolving loan fund unless that's made available this doesn't actually help CV fiber very much at all I mean it's good that we have a feasibility study but we're getting funding to do that through other mechanisms but if there's not a pool of money that we can borrow from until we can go three years down the road go get those municipal bonds and just pay that stuff back then you can give the money to the next folks that are interested in using it this process is going to be much slower we're not going to be larger scale until three or four years later then we would I have a question that I'm financing and this might be two in the weeds but certainly the concept of a revolving loan fund is pretty tangible is there an avenue that you can see by which whether through similar state funding there is a mechanism to credit enhancement for borrowing that a CUD would do by which state funds could be more broadly leveraged where as Herbert testified and I agree some of these loans will work some won't but if there is a buy down of the credit risk by the state in supporting a loan that you get from a private entity that spreads the the lendability if you will much broader with a smaller amount of money I don't know if that's something that you could go in far enough down the path to look at but that's something I'm kind of interested in underwriting our loans I'm not 100% sure whether there's anybody out there right now that would look at us where it's just a bunch of folks around the table saying hey we have a good idea that's kind of Silicon Valley stuff right there but you're just going to say we'll write you alone would the backing of the state of Vermont help almost certainly but still this is a I guess the answer is I don't really know I don't really know if even with that backing if somebody coming from basically we're at $5,000 like I said $5,000 in no infrastructure is anybody commercially going to touch us and say I want you to lend us $10 million so that we can build out half a dozen towns if anybody's going to take us seriously if they're just going to chuckle and walk away so isn't that the purpose of the administration's proposal I think some of it is some of it is to back loans of up to $2 million by Vita $2 million is enough to get up to a an adequate base to attract municipal those will be 5 year loans as I recall Jeremy good to see you I think if we're a Silicon Valley group you'd have people throwing money at you my question is about scale and replicability and is there a size minimum size that this needs to be you know you're talking 17 towns, EC5 has grown to we have if you count Montpey we have 24 members 24 members you know can 5 towns do this sustainably it depends on what they are yeah I agree I mean it really it really depends it also depends on the operational model that they choose you know if they hire they hired ValleyNet like EC5 does they hired ValleyNet to manage that and they had the ability to find somebody who was willing to essentially run stuff I think you could probably sit down and figure out the financial model and the business model to make that work and then come out to the same costs as EC5 are probably not it's going to be more expensive the smaller it is I don't know what that sweet spot is I would say 5 I think you could probably do 5 if I'm just making stuff up here I understand the financing maybe more than 5 depending on which towns they are but 10 is a better bet presumably it's the number of homes bigger uptake we were talking Colchester Essex that's a rather different business model than me building in Roxbury I would say Grandville is one of our members I would say that our 2 dozen is getting near the upper limit of practical size because you've got governance issues with the governing board that big and the territory that you're going to cover it may make more sense to have another similar district than one huge district that's why I used to say we don't have imperial ambitions so on the kind of operating side you have a a valley net type entity in mind is that something you will hold in house we're working on that that's part of our developing the business plan and feasibility study it depends on where we build we have a handful of potential partners WEC being a partner in some aspects of it but we also don't necessarily have to have valley net does basically everything it wouldn't necessarily have to be that way we could also hire our own employees we could lease space and have office and have CV fiber employees but yeah there's other options there's folks with the technical capacity in the area that we've already been talking to about can we get you to do this we could contract out with folks from out of state to do like help desk there's a lot of different angles and what we're going to do when we do our feasibility study and business plan development is figure that out essentially here are the three approaches that we can go to running the show and here's how the money is going to work with that and we will be deciding that I would say within the next 3-4 months I wanted to I almost mentioned this in my testimony our bond underwriters told us that they really liked the fact that we didn't have any employees of our own because that means we don't have any questions of unfunded pension liabilities and potential investors and municipal bonds really look at that so that's a good reason to try to find a one or more partners to work with to do the implementation work for you