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The Upper Valley Fiber Initiative
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Overview of The Upper Valley Fiber Initiative (UVFI)The Upper Valley Fiber Initiative is an umbrella application, supported by Dartmouth College – the region’s largest employer – covering longstanding broadband expansion efforts in municipalities of the Upper Connecticut River Valley of Vermont and New Hampshire. These efforts include ECFiber and WCNH.Net The Upper Valley has potential unique advantages to a Google test network site:
ValleyNet was founded in 1994 as a non-profit spin-off of Dartmouth College to provide local dial-up internet access in the Upper Connecticut River Valley of Vermont and New Hampshire. Over the years, ValleyNet’s service offerings have evolved (link to timeline page), but it continues to advocate for universal and effective Internet access and has been instrumental in bringing the East Central Vermont Community Fiber Network (ECFiber) to its current shovel-ready status. ValleyNet and Dartmouth believe that one of the most significant problems in the Upper Valley is the underdeveloped state of regional internet access infrastructure which disadvantages local citizens, communities and businesses. The former local cable company, Adelphia, and now the local LEC, Fairpoint, have both been in financial distress and bankruptcy over the past several years, leaving the Upper Valley’s infrastructure in a checkered state. Cable line extensions, DOCSIS upgrades, copper network maintenance, and DSL deployment have all been delayed or deferred by financial or competitive constraints. Low population densities and hilly topography combine to make wireless coverage (for cellular or WISPs) extremely difficult. State and federal governments have been no help to this point, despite the birth of the much publicized Vermont Telecommunications Authority. In the Upper Valley (and much of rural America,) no private operator can independently afford to provide the universal broadband coverage that ValleyNet believes is as essential as electrical or phone service. Unless the federal government’s National Broadband Plan brings about something akin to the Rural Electrification or Universal (telephone) Service programs – and quickly – we believe the Upper Valley’s dynamic, knowledge based economy (largely medical, educational, and work-from-home) will continue to suffer. One town in the ECFiber region has already pre-registered over 80% of its residents! In summary, ValleyNet and Dartmouth College believe that the Upper Valley’s unique combination of attributes would make a fruitful testbed for Google’s “Fiber for Communities” which could then be replicated (using private sector or public sector financing) in other rural areas of the country. Upper Valley Broadband Timeline 1994 – ValleyNet founded to provide local dial-up service throughout
Upper Valley. Unique Regional AttractivenessVarious Regional Efforts in PlaceBecause of the poor state of internet access infrastructure in the area, there have been several efforts to improve broadband coverage over the past six years. These efforts have varied from private corporations (Merton Group’s RUS Hanover application 2004,) town managers (2005 - West Central NH, covering 8 towns from Lyme to New London,) grassroots (2007 -ECFiber, covering 23 towns from West Windsor to Montpelier,) and institutional (2009 - FastRoadsNH, covering WCNH.net and southern NH, spearheaded by the University System of NH and the NH Community Development Finance Authority.)
ECFiber - 2007 Similar GoalsAll these efforts share goals similar to that of Google’s “Fiber for Communities.”
Open Access Diversity of SupportGrass RootsECFiber has pre-registered nearly 5,000 of the 20,000 households in its region, a penetration rate of nearly 25%. Several towns have signed up more than 50% of their residents. Many residents have submitted their stories about lack of broadband – they make truly compelling reading, Municipal23 ECFiber towns voted overwhelmingly in 2007 town meetings to support ECFiber. Voice votes were often unanimous. In Australian ballot towns, the lowest percentage for approval was Montpelier, with 78%. Eight NH towns are participating in WCNH.net, and Lebanon, NH, home of the Dartmouth Hitchcock Medical Center is supporting this application. InstitutionalThe FastRoads project is a collaboration of the New Hampshire Community Development Finance Authority, the Monadnock Economic Development Corporation, the thirty-four towns of the Monadnock region, and WCNH.net (the eight towns of of the Upper Valley–Lake Sunapee region). The goal is to bring a modern “big” broadband telecommunications infrastructure to the region. FastRoads intends to build a complete middle mile and last mile network that aggregates demand for the entire region, including community anchor institutions, large and small businesses, government offices and agencies, and residents. The routes built with stimulus funds will provide middle mile fiber to 25 communities and 125 community anchor institutions in the Fast Roads region, and two last mile projects will provide fiber connections to more than 500 businesses and residents. CorporateVital Communities’ Corporate Council and many of its constituent business members on both sides of the river support the UVFI. Educational
Dartmouth College Media – Valley NewsThe regional newspaper, The Valley News, has editorialized no fewer than five times on this topic since 2007 on the topic of poor broadband service in the Upper Valley. 5/10/07 – “As part of an industry that spews out and feeds off the rapid flow of information, we view the delivery of broadband as an urgent undertaking.” 1/20/09 – “Economic competitiveness will increasingly depend on universal, affordable access to broadband service, and no part of the nation should be left behind through an accident of geography.” And finally, 2/24/10 – “Towns on both sides of the Connecticut River have been trying for years to build fast fiber-to-home networks. So far, though, neither the East Central Vermont Community Fiber Network, comprised of more than 20 towns, nor a New Hampshire consortium that includes eight Upper Valley towns has been able to get substantial political or financial support. Yet both projects offer promising models for how to extend broadband access in precisely the ways Google has in mind, through open-access networks that would give users a choice of service providers.” (emphasis ours) Diverse Demographics
(click on image to open full-size PDF of this chart)
Complete Microcosm of a Regional EconomyThe Upper Valley consists of 3 large towns (Hanover, Lebanon, Hartford) that, together, constitute a small city, surrounded by bedroom communities (Norwich, Thetford, Enfield, Lyme) and then a diverse group of rural communities (some extremely rural.) Montpelier and New London, on opposite ends of the area represent their own smaller regional economies. Dartmouth College and the Dartmouth Hitchcock Medical Center are the region’s major employers, but there exist many high technology spin-off companies as well as several independent hospitals, including a VA hospital. Broad Range of DensitiesLinear densities in the ECFiber area range from 4 households per mile to over 90, and average 14 per mile – we estimate the entire VT/NH area averages 17 households per mile. Densities per square mile range from 2 to 100 households per mile and average 31. Dramatically UnderservedIncumbent NeglectThe low level of incumbent telecom carrier investment in the Upper Valley is perhaps unique in the nation. The local cable company, Adelphia, and now the local RBOC, Fairpoint, have both been in bankruptcy over the past several years. Cable line extensions, DOCSIS upgrades, copper network maintenance, and DSL deployment have all been delayed or deferred by financial or competitive constraints. Uncooperative TopographyRolling hills over the entire region, combined with abundant forest, make wireless and cellular coverage difficult. UnservedIncumbent telcos and cable companies do not make coverage data public, but we estimate that nearly half the households in the area have no access to either cable modem or DSL internet service. The rest rely on dial-up, spotty, slow WISP coverage, or expensive unreliable satellite. Cross-Border Cooperation HistoryImportance of Municipal CooperationBecause of their small size, towns in the area have a long history of co-operation in the areas of education, emergency services, regional planning, non-profits, media, and now, telecommunications in order to achieve economies of scale. Dresden and Rivendell Inter-state School DistrictsThe Dresden school district (Hanover NH and Norwich VT) was the first interstate school district in the country and was authorized by Congress in 1963. The Rivendell interstate school district north of Dresden was organized more recently. The superintendent of the Dresden district has been a supporter of ValleyNet’s efforts to advocate for broadband. Dresden – originalAt one point in its history, the southwest corner of Hanover, NH was known as Dresden, which in the 1780s joined other disgruntled New Hampshire towns along the Connecticut River that briefly defected to what was then the independent Republic of Vermont. Greater Upper Valley Solid Waste DistrictTowns include Bridgewater, Hartland, Norwich, Pomfret, Sharon, Strafford, Thetford, Vershire, West Fairlee and Woodstock – all but 3 of these towns are in the ECFiber project (and the others were not included in ECFiber because they are served by independent telcos that provide reasonable DSL coverage.) Non-profitsNearly all non-profits in the Upper Valley serve both VT and NH. Vital Communities / Corporate CouncilThe Corporate Council meets every other month to identify, study, address, and make recommendations with respect to the important issues facing our region. Recent issues being addressed by the Corporate Council include universal fiber-optic service and joint energy conservation measures to reduce greenhouse gas emissions. James Varnum, President and Chief Executive Officer of Dartmouth Hitchcock Medical Center (ret.) serves as Chair. ValleyNetCorporationsSee links to support letters in left column Media
Valley News ECFiber, WCNH, FastRoadsNHUnique Transportation HistoryThe Upper Valley has been a center of long-distance transportation since pre-history, thanks to its location at the confluence of the Connecticut, White and Mascoma rivers. White River Junction was a major railroad hub (and still has significant long-haul fiber infrastructure to Boston and New York which utilizes RR rights of way.) In the 60’s, the interstates I-89 and 91 were built. ApplicationsStandard applicationsIn addition to the fairly predictable areas of innovation that are likely in any community with a ubiquitous 1 Gig network such as:
Gaming Applications unique to this rural areaValleyNet believes the Upper Valley provides special opportunities in the areas of: Health CareThe area is home to a wealth of health care delivery and research institutions, including Dartmouth Medical School - Hanover, NH; Dartmouth Hitchcock Medical Center/Norris Cotton Cancer Center - Lebanon NH; Alice Peck Day Memorial Hospital - Lebanon NH; Veterans Affairs Medical Center – White River Junction VT; Gifford Medical Center - Randolph VT, and New London Hospital – New London, NH. Rural delivery Some of these hospitals (particularly DHMC and VA) draw patients from a broad area. An FTTH network would allow numerous opportunities to revolutionize not only the doctor-patient and patient-hospital relationships, but also the doctor (at home)- hospital relationship. MunicipalContent Most of the towns in the area are not covered by public access television systems because they do not have cable service. Citizens in these towns cannot view public meetings (selectboard/council, school board, planning board, town meeting, etc.) without attending them. An FTTH network would allow users to upload video content from public meetings and community members to watch these at their leisure. ValleyNet would hope to facilitate volunteers in each town to provide content of these public meetings. Administrative With such a network, the small towns in this region could link together to share municipal IT efforts. (see educational administrative savings below.) EducationalCurricular All area school systems face severe financial pressures. Property taxes are increasing at a rate greater than GDP growth, primarily due to school budgets. And most schools in the Upper Valley face declining enrollments. Pressure to cut “extras” like art, music, sports, languages is intense. An FTTH network linking area high schools (and Dartmouth) would be transformative for the breadth of curricular offerings in the area high schools. Each high school could be outfitted with one or more state-of-the-art “telepresence” rooms. High schools could choose to anchor certain special courses which would be taught in the telepresence facility and then any other high schooler in the area with access to a laptop with a camera and a microphone could participate remotely. As an example - Hanover High School, arguably the best public high school in the Upper Valley, does not offer a Chinese or Arabic language option because it is not an exceptionally large school (~1,000) and course enrollment would need to be ~20 per class to make financial sense. Administrative Savings Each district (and in some cases, each school) in the area employs separate technology co-ordinators and servers to maintain systems like “PowerSchool.” A network linking each school could allow centralized administration of such servers. Dartmouth content/classes Many Hanover High School students (and some from nearby high schools) attend introductory Dartmouth classes in their Junior and sophomore years. By utilizing the network and Dartmouth’s “smart” classrooms, this opportunity could be extended to all students in the 32 town region. RuralTelecommuting, flex hours The Upper Valley is bisected by two interstate highways, I-89 and I-91. Because of this, and because of the cost of housing in towns like Hanover, Hartford, and Lebanon and Norwich, employees at Dartmouth College, DHMC and the VA Hospital commute from long distances. Traffic in and out of Hanover and Lebanon in particular is a real issue for commuters. Agricultural Farmers and their customers (retail or wholesale) could be linked together to advertise the availability and quality of their offerings. Vital Communities has an active Valley Food and Farm program Dartmouth and DHMCDartmouthDartmouth President Jim Yong Kim - “We believe Dartmouth and the Upper Valley offer a unique proposition in offering 50 years of experience with new computing paradigms, along with the appropriate research, educational, and community infrastructure necessary to leverage that experience effectively with the Google Fiber Network. We hope that this letter of support encourages serious consideration of the Upper Valley Fiber Initiative, and hope the opportunity arises that will allow the Upper Valley to be selected for this project.” Computing Innovations Dartmouth College, despite its liberal arts reputation, has an impressive history in innovating in the area of computer usage, including the BASIC language, time sharing, required computer use, Blitzmail (email client), fully wired campus, and a fully wireless campus. Dartmouth, renowned for the quality of its undergraduate teaching, has also been innovative in the field of using technology in the classroom. The Dartmouth Center for the Advancement of Learning was established in 2004 to assume “primary responsibility for the professional development of Dartmouth's teachers,” in part by “promoting the purposeful use of new media and information technology for teaching and learning at Dartmouth.” Dartmouth Hitchcock Medical CenterDHMC is at the forefront of the debate on public health care policy. The Dartmouth Institute for Health Policy & Clinical Practice Dartmouth Atlas For more than 20 years, the Dartmouth Atlas Project has documented glaring variations in how medical resources are distributed and used in the United States. The project uses Medicare data to provide comprehensive information and analysis about national, regional, and local markets, as well as individual hospitals and their affiliated physicians. This research has been widely cited during the recent health care debate. Dartmouth President Jim Yong Kim Dartmouth’s new president, Jim Yong Kim, has an extensive background in health care management and innovation.
Financial ViabilityThe following financial approximation is designed to show that the economics for FTTH in the ECFiber region are not impractical. It takes $60M in capital expense to cover the 20,000 households and connect 10,000. So when half the households subscribe (and many municipal networks have penetration in excess of 60%,) the cost per subscriber is $6,000. Each subscriber generates $120 per month in revenue for telephone internet and TV and the earnings before interest, taxes, depreciation, and amortization (EBITDA) margin in such a developed business is approximately 50%, so each subscriber generates $720 in EBITDA per year on a $6,000 investment. That is approximately a 12% return. Of course, operating losses in the early years must also be factored in but we hope this makes the point that well-managed, rural FTTH networks can generate sufficient return to repay relatively low cost financing. ECFiber has conducted numerous surveys and a detailed business plan to support its planned municipal capital lease offering with Oppenheimer as placement agent. (ECFiber’s offering in September ’08 was cut short by the demise of Lehman Brothers and subsequent financial distress.) A telephone survey by Osborne Associates showed that residents in the ECFiber area spent an average of $135 per month for telephone, internet, and multi-channel television. The Fiber to the Home Council supports ECFiber’s penetration projections. [http://www.ftthcouncil.org/en/knowledge-center/publications/reports/ftth-north-american-market-update-april-2009] “For non-Verizon FTTH customers, take-rates have been fairly steady at over 52%. (While these rates include some cases where fiber has been replaced to all customers, even voice only customers, it is important to note that even voluntary take-rates for some individual FTTH projects exceed 80%. This is especially true in rural areas that were previously underserved with both Internet and video product and therefore have little real competition.)” Demographic and service conditions are nearly identical in the nine NH towns. Speed and Cost of DeploymentRegional Utility Configuration – Primarily AerialThe region is characterized by aerial utilities – only limited portions of certain town centers (Hanover, Woodstock, Montpelier) and a few newer subdivisions have underground utilities. Many newer homes do utilize underground conduit for utilities from the street to the house and directly buried fiber using micro-trenching techniques will be utilized to complete these drops. The major electrical utilities in the ECFiber territory include Green Mountain Power and Central Vermont Public Service. In New Hampshire, National Grid predominates. Telephone service is almost entirely Fairpoint with the exception of New London which is served by TDS. Pole ownership varies but responsibility for make-ready is split between the electrical and phone company. Scope and Estimated Cost of NetworkECFiber has completed a detailed engineering study of its 1600 miles of roads and nearly 39,000 poles and believes that, including make-ready, the distribution portion of its FTTH passive optical network (PON) could be built for $30M. (ECFiber and ValleyNet have executed a not-to-exceed contract to construct the distribution network and drops to approximately one-third of drops with the Atlantic Engineering Group, which has constructed 17 municipal FTTH projects nationally.) Hub/headend and fiber aggregation sites have been identified. Extending the ECFiber distribution cost to the demographically similar NH towns results in an overall cost to build of approximately $50M (excluding hub/headend.) Speed of DeploymentBecause of the aerial nature of the utilities, ValleyNet believes the VT portion of the UVFI network could be fully built to every last mile of road in three years, with service commencing to the first homes covered in less than one year. CPGValleyNet has obtained the requisite permissions for the VT Public Service Board to provide both telecom and CATV services in the 23 ECFiber towns. ValleyNet and/or ECFiber would likely be a “triple play” service provider on the Google network. VT pole attachmentAll states are required to have rules implementing the Federal Law obligating owners of public utility poles to permit any licensed telecom provider to attach to the pole. But the rules devised in different states differ substantially as the terms, timing, cost, and overall fairness of the pole attachment rules. Vermont rules (Rule 37 of the VtPSB) are among the most rigorous and favorable to new attachees in the nation. This has facilitated new attachments in the past and will certainly do so in the future. ECFiber has extensively surveyed the poles in its region and believes that its budget of $10M for make-ready on the 39,000 poles in its region is conservative. Management TeamThere exist in the area a large number of qualified personnel to operate a ubiquitous FTTH network. ECFiber has identified candidates for nearly all mid and high level positions in the requisite functional areas.
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