Federal funding is helping, but there’s room for improvement

Broadband planning was already underway in several New Hampshire towns when the pandemic emphasized the need for highspeed, reliable internet in rural areas.

In June, the Governor’s Office of Emergency Relief and Recovery announced the availability of $50 million in federal CARES Act funding that could be used to complete broadband projects.

For municipalities taking the initiative to tackle their broadband woes, their eligibility for federal funding depended on where they were in the process.

The towns of Dublin, Harrisville, Rindge, Walpole and Westmoreland, which voted last spring in favor of 20- to 30-year municipal bonds to build out fiber in partnership with Consolidated Communications, had bad timing, since they showed their ability to cover a portion of the cost, which will be offset by a $10 or so monthly fee charged to future network subscribers. And Carroll County, which is wrapping up a survey of its internet availability and offerings thanks to a U.S. Department of Agriculture grant, was too early in the process to meet CARES Act requirements.

But for Bristol, “the CARES Act funding came at a perfect time,” said Nik Coates, Bristol town manager. And in early August, Gov. Chris Sununu announced the town received $1.8 million for 24 additional miles of fiber.

In total, the governor expects approximately $16 million will be awarded to communities to build out fiber for more than 5,500 homes and businesses in New Hampshire.

So far, the governor has disclosed details for some of the projects, with $6.5 million to connect more than 2,000 residences in the towns of Danbury, Springfield and Mason as well as Deering, Hillsborough Upper Village, Stoddard and Washington.

Sununu called the unanticipated federal funds a win for New Hampshire, which does not allocate state funding for such projects and has talked with New Hampshire’s congressional delegation to seek more federal funding.

But the CARES Act also highlights an ongoing problem: the disconnect between how government and industry operate and the need to ensure the left hand is speaking to the right, so federal funds can achieve broader goals.

Federal requirements for the CARES Act — such as the requirement broadband networks are prepared to make residential connections by Dec. 15 or else not be reimbursed — were meant to expedite projects to meet immediate needs. Bordering on unrealistic, the guidelines were criticized by the Monadnock Broadband Group and others interviewed by NH Business Review for excluding efforts that were already underway or could have made planning inroads with financial assistance.

“We put an initial $50 million into the fund because it was completely unknown what the application process would yield,” said Sununu. “I think we could have done a lot more with this money, but we just didn’t have the time. That was one of the biggest drawbacks is the time constraints the federal government put on these dollars.”

Broadband implementation

The process leading up to building out fiber is extensive.

First, data needs to be collected by municipalities, since the Federal Communications Commission’s census block data is admittedly flawed. (In March, Congress passed a bill requiring the FCC to determine a new process.) And, per New Hampshire law, towns cannot bond to build networks where there is already the FCC’s definition of 25 megabits per second download speed and 3 Mbps upload speed.

Towns need to determine where there are served, unkserved and underserved areas, sometimes by distributing residential surveys, though mainly relying on requests for information sent to internet service providers.

Coates said he has spent 2 1/2 years looking at maps of Bristol, “trying to figure this whole thing out of how do we connect the dots as a town and a region.” His project will tap in to existing fiber at Plymouth State University to connect other parts of town. Even then, he notes, “the money is not going to [cover] the entire town.”

“It’s not rocket science to build fiber to the home, but there is a time frame that’s normally required to do it thoughtfully,” said Mike Reed, director of external affairs for Mission Broadband, a Maine-based rural internet consulting firm working with some New Hampshire towns. “Many broadband projects require feasibility studies, they require engineering studies,” and once a plan has been established, it takes time for internet service providers to buy and hang fiber and required electronics on telephone poles, he said.

About eight to nine months would be a reasonable amount of time for the length of a project, start to finish, said Reed, who also previously served as Maine state president of FairPoint Communications. With just four months to complete CARES-funded projects, it explains why funds were not applied to projects not ready to contract with a provider. (Towns that had already entered a contract were also excluded.)

Ownership over telephone poles also leaves some providers better positioned than others.

“In a sense, Consolidated Communications has a leg up over anyone else because they own poles and they own assets on those poles,” said Carole Monroe, chair of the board for Vermont-based internet service provider ValleyNet and a member of Dublin’s broadband committee.

Pole ownership

Dublin issued a request for proposal last year that attracted a few internet service providers, including one from out of state, but settled on a public-private partnership with Consolidated because the build-out would be $1 million cheaper.

“Any other provider — other than the electric company, that’s unlikely to respond — would have those costs,” said Monroe.

For that reason, and prompted by member frustration over internet service, one electric company is responding to the need for broadband.

The New Hampshire Electric Cooperative announced it applied for $6.7 million in CARES Act funding to build out fiber in Lempster and Colebrook. NHEC owns a majority of the 120,000 poles in its system.

“When we own the poles, we don’t have to go through the attachment process, and we don’t need permission to hang fiber,” said Seth Wheeler, NHEC communications administrator. But when the poles are owned by the phone company, “it’s a logistical complication. We have to pay an attachment fee just like they do for equipment on our poles, and we need an agreement with them.”

Pole disputes can cause significant delays, as Hanover Town Manager Julia Griffin has heard firsthand.

One resident called her office, furious about Comcast delaying its broadband build-out downtown due to a pole dispute with Liberty Utilities.

The complicated nature of the telecom world, and stipulations of a $132,157 federal grant from the Northern Border Regional Commission, led Bristol to hire Drummond Woodsum as legal counsel to navigate the concepts of pole leasing and network management. The grant requires Bristol to own the planned fiber, but maintaining and operating a broadband network is outside the purview of the small town.

“We’ve worked out a situation where they’re willing to accept a long-term lease arrangement,” said Coates. “The request for proposal is written so it could be a construction company comes in to build it and we go to a second RFP to hire an internet service provider. It’s flexible. It also could be they’re using existing assets, so NHEC, for instance, has a bunch of poles — we can partner with them.”

Wheeler confirmed NHEC has been in communication with Bristol and other towns on pole leasing, but there are currently no plans to officially partner on such a project. Bristol plans to negotiate RFPs at the end of August, beginning of September.

Communications districts

HB 1111 made another significant option available to municipalities — it allowed them to bond together as a communication district to address broadband in areas that don’t meet the FCC’s definition of adequate service.

Last spring, Carroll County commissioners convinced a broadband of a handful of towns to include a selectman from every town in the county. The county is working with the Center on Rural Innovation, a Vermont-based nonprofit, and the North Country Council, a regional economic development agency, to complete a comprehensive survey of its internet offerings.

“We thought it was a huge undertaking, but we made the decision to do it, and I’m glad we did,” said Rick Hiland, co-chair of the Carroll County Broadband Committee. No bonding measure is in place, but the feasibility study from CORI will help determine the best path forward.

While the pros and cons of a countywide approach have yet to be determined, Rob Koester, vice president of consumer product management at Consolidated, is intrigued by the geographical balance of the model.

Koester led Consolidated’s negotiations to partner with Chesterfield to build out fiber in that small southwestern New Hampshire town. That model sparked more public-private partnerships in the Monadnock Region that will break ground any day now.

“We can do the public-private partnership route with each of the towns individually. I think all of them would be great candidates, but if we can do it together, there’s scale benefit of doing it at the same time,” said Koester. “The networks we build don’t follow town boundaries. We can do it either way, but it’s more efficient the larger the block.”

“It’s always better to aggregate the unserved together to create a business model,” said Monroe of ValleyNet. “It means no small town will be left behind. If we continue to pick them off one by one as we’ve been doing, it will take 20 years to get New Hampshire down.”

The North Country Council, which helped distribute Carroll County’s survey, has adjusted it for both Grafton and Coos counties, which will soon hold their first broadband committee meetings, said Executive Director Michelle Moren-Gray.

Local advocates

“One of the things we see as a success for Carroll County Broadband is that it had community champions,” said Moren- Gray. “They started small with local champions that moved to local support, the county came on board and now every community in Carroll county is essentially participating in one way or another in their initiative.”

It was NHEC members who shined the light on broadband needs in the electric company’s market area after circulating a petition signed by more than 900 members to hold a May ballot initiative to change NHEC’s charter to include facilitating access to broadband.

The initiative just barely failed to pass by the two-thirds margin that was required, with 64.4% voting in favor. But the board got the message.

“The board understood, given the [level of] support, we would continue to seek ways to provide broadband access to customers,” said Wheeler.

Since the vote, NHEC applied for CARES Act funds in two towns, with plans to take out a $3.8 million capital loan if its application is approved.

“You’re talking about a 20-year loan over that period for $3.8 million. It’s almost a negligible effect on rates over that period,” said Wheeler. “Over time, we see a business model where we could actually make money off of this.”

Ultimately, the end goal is to build a fiber backbone to members.

“We’re too early in the process to know how long that will take — it will take years — or what role NHEC plays, whether we build a backbone and another company does service is still to be determined,” Wheeler said. “We have to balance our members’ needs to provide their electric service, but we believe there’s a lot we can do to facilitate broadband access.”

Federal funding

Meanwhile, U.S. Sen. Maggie Hassan, D-NH, and Sen. Chuck Grassley, R-Iowa, are sponsoring a bill that would extend the deadline for all CARES Act funding through 2021. More likely, there will be another stimulus package, said Reed of Mission Broadband.

“We’re actively looking with Michelle [of North Country Council] for grants that can fund similar work we’re doing in Carroll County,” said Kelley of the Center on Rural Innovation. “The efficiency and expertise you gain from doing it in one location in northern New Hampshire can be applied to make the other processes go faster.”

There are other federal funding pools, though also criticism of overly restrictive limitations.

Richard Knox of Sandwich, who helped lead the NHEC ballot initiative, is eyeing an upcoming October bidding deadline for the FCC’s $20 billion Rural Digital Opportunity Fund auction, which NHEC may participate in. If his town were to take part individually, “only a percentage of Sandwich would benefit from that money,” since the FCC’s flawed census block mapping system overstates broadband in the town. And efforts to redo mapping won’t likely be implemented before the deadline.

“We have a lot of data now about who has broadband service and who doesn’t, which is the one reason we know the FCC maps are not very good,” he said.

Monroe of ValleyNet likewise lamented the U.S. Department of Agriculture’s 10 Mbps download and 1 Mbps upload threshold for broadband, which eliminates towns from applying for broadband funding through the agency’s ReConnect program.

For Hiland of the Carroll County Broadband Committee, CARES Act funding “is a sore subject.” He and his team contacted providers and put together a proposal for engineering design and process of pole access that was a touch over $11 million, but it was not submitted once he learned it was not advanced enough in the process for the Connecting New Hampshire Emergency Broadband Expansion Program.

“It doesn’t make sense. Why did you throw that dog bone out when you’re just going to make it difficult to get it?” said Hiland. “The $50 million would have gone a long way — you could have done all of the engineering and design work for rural New Hampshire.”

Liisa Rajala can be reached at lrajala@nhbr.com.

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HB 1111 allows municipalities to bond together as a communication district to build high-speed internet — a concept under consideration for northern counties.