The Deerfield Valley Communications Union District (dba DVFiber) is nearing the end of its third year of operation and looking forward to more accomplishments in our next year. We have developed our working relationship with our partner Great Works Internet (GWI) of Biddeford, ME, and we have received two American Rescue Plan Act (ARPA) grants, one for $4.1 million for pre-construction activities and a second one for $21.9 million to begin construction of a high-speed fiber optic network to serve all 24 member towns in our district. Our commitment from the beginning has been to ensure that all on-grid homes and businesses in our district have access to the 21st century technology that will be the basis for our continued growth and prosperity. This means not just availability of the technology but to be sure that affordability is not an obstacle to customer access and use.
When completed, this community-owned network will include three interconnected backbone rings, one for the southern towns, one for the middle, and one for the northern communities in the district. This backbone configuration will provide the resilience of our network, assuring excellent service to customers. Laterals will come off the backbone, one to each fiber service area (FSA), and the final feature will be the connections to individual customer locations. The network will have multiple distribution hubs where it will uplink to the world wide web. This will serve to build resilience into our network to minimize service interruptions for customers.
DVFiber Has Evolved
The representatives and alternates appointed by the Select Boards of the member towns have worked diligently to sustain our Governing Board and our committee structure, which consists of the Operations, Communications, and Finance and Audit Committees. Each remains as viable as ever, and it is this committee structure that is key to keeping us on track as we do our work.
Because the pace and volume of work have increased significantly, we have added an Executive Committee to act on behalf of the Governing Board for quicker decision making. For that same reason, we have for the first time shifted from an all-volunteer administration to hiring an Executive Director and anticipate hiring additional administrative support in the upcoming budget.
In addition, DVFiber has had to adapt our perspective to accommodate the engineering progress we have achieved. We no longer think about town boundaries. Fiber optic cables do not know when they have crossed a town boundary. Instead, the engineers have created what are called fiber service areas (FSAs). A member town will be served by more than one FSA, and an FSA may cross one or more town boundaries. There are 156 FSAs in the district, each connected to a distribution hub on the backbone rings of our network.
The federal grants we have received are two of the most significant events of this past year. The first was a pre-construction grant for $4.1 million. It paid for high level design, final design and engineering, pole studies, and a “make ready” process. Our cables, like all communications cables, are hung on existing utility poles, most of which in our district are owned by Green Mountain Power (GMP). The rest are owned by Jacksonville Electric Company (JEC), a small electric company that serves much of the Town of Whitingham, and by Consolidated Communications Inc. (CCI). We are required to apply to each pole owner to request permission to hang our cables on their poles and they are required by law to agree, but with the stipulation that each pole must be in good condition to accept the new cable and some existing cables may need to be moved before ours can be attached. The process of inspecting every pole, replacing some to bring them up to standard, and making room for our cables is called “make ready”. The pace of this process is in the control of the pole owner–GMP, JEC, or CCI in our case–and thus the pace of this “make ready” work has everything to do with the speed with which DVFiber can meet its build-out goals.
Our second grant, for $21.9 million, was awarded by the Vermont Communications Broadband Board (VCBB) on July 11, 2022. This grant, which was signed by DVFiber on August 12, 2022, will fund the construction of 513 miles of fiber optic cable capable of connecting up to two-thirds of the more than 7,700 unserved and underserved addresses in our district. Pending submission and review by VCBB of DVFiber’s detailed engineering designs for the first FSAs, we will have access to these funds.
In addition, these grants require specific and detailed reports to VCBB and need a considerable degree of detail and accuracy on a monthly basis. For this purpose, we have contracted with the Brattleboro Development Credit Corporation (BDCC) to manage our grant reporting and possibly evolving to include our accounting and other management activities.
Most significantly, DVFiber hired Gabrielle Ciuffreda of Guilford to be full-time executive director. She began September 1 and has worked closely with Project Director David Jones of Halifax to accomplish a smooth transition of leadership and authority. We thank David Jones for his nearly three years of tireless service and advocacy for DVFiber.
We plan to go “live” with an initial group of customers by the end of 2022. Construction of the southern backbone ring will continue unabated into 2023. A special taskforce is working to develop DVFiber’s capacity to subsidize eligible customers who cannot afford the monthly charges for our service. We are working with Equal Access to Broadband (EAB), a charitable organization founded by ECFiber to make fiber optic service truly affordable for all. EAB’s mission is to build the capacity to help customers access existing federal subsidies and to establish additional resources to support the education and awareness work required.
Several towns have already contributed town ARPA funds to help make high-speed internet accessible and affordable to their neighbors. The Town of Marlboro donated $24,652 to DVFiber for the purpose of subsidizing the initial connection costs for the underserved and unserved residents in the town. The Town of Jamaica donated $22,100 for the purpose of helping subsidize residents’ connection costs. The Town of Halifax donated $40,000 to subsidize the installation and connection costs for qualifying residents. The VCBB is matching the donations from these towns (so these funds will be doubled), and will continue to match any town ARPA funds (up to $100,000) relating to increasing access to high-speed internet if these funds are committed by the town by May 31, 2023.
We anticipate a new round of federal funding to become available for construction in the coming year, funds earmarked for broadband expansion in the Infrastructure Investment and Jobs Act (IIJA), recently signed by President Biden. That grant will allow DVFiber to continue building our network to the point where we have enough customers to produce annual revenues sufficient to access the municipal capital markets for revenue bonds to finish construction to connect all on-grid premises in our member towns. In the meantime, large corporate broadband providers are increasing their efforts to attract the same customers, so we find ourselves working in an increasingly competitive arena, something new to single purpose municipalities like ours. To do so, we continue to work as fast as we can to build a reliable and resilient fiber optic network, connect customers, and earn our reputation as the public’s first choice Internet service provider (ISP).
To the Select Board members of all our member towns, we are most appreciative of your continued support and for appointing capable and dedicated representatives and alternates who have committed not just their talents but thousands of hours of their time to bring us to this point of construction. These volunteers serve the public on DVFiber’s Governing Board and its working committees. They are the foundation of DVFiber’s success as your community-owned and -operated high-speed fiber optic ISP.
2022 Forecasted Activity & 2023 Proposed Budget
|Deerfield Valley Communication Union District|
|2023 Draft Budget|
|Subscriber Revenue net of deductions||$228,478||$1,760||$451,492|
|Grant Revenue & Donations||$14,033,541||$3,971,428||$9,990,031|
|C/G/S less depreciation||$118,394||$52,278||$439,585|
|Total Operating Costs||$666,804||$324,145||$1,191,242|
|PreConstruction & Construction Expenditures||$13,479,787||$3,608,119||$9,508,326|
|Earnings includes grant revenue used to fund the construction of capital assets|
|EBITDA is earnings before interest expense, taxes, depreciation & amortization|
|Recurring EBITDA add back depreciation and subtract grant & donation revenue|