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Summary:

Residents of rural Vermont are getting gigabit networks that will cost $35 a month. No, not from Google, but from their incumbent telco provider.

fiberstrandthumbREAL

The telephone company that provided the copper service that in 1923 allowed Calvin Coolidge to be sworn in as United States President, at Plymouth Notch in Vermont, is trading its storied copper for fiber. VTel, a telephone company providing service to 21 Vermont communities is upgrading its network to an all-fiber, gigabit-capable network.

So far, it’s offering about 500 residents gigabit speeds for $35 a month and plans to cover its 17,500 customers by the middle of 2014. That’s about the same time Google plans to start offering gigabit service to its first Austin residents, and means VTel will be hooking up 200 homes to the network each week. So when we counted gigabit homes earlier this week, Vermont likely supplied a few.

VTel’s transition from POTS (plain old telephone) to photons was made possible in part from the broadband bucks the federal government allocated as part of the American Reinvestment and Recovery Act in 2009. Thanks to ARRA grants totaling $94 million, plus matching grants from the local utility that wanted to use the planned network for smart grid deployments and its own investments, VTel has spent over $150 million building out more than 1,200 miles of fiber.

VTel uses Alcatel 100 gigabit routers at each of its 14 rural central offices serving its GigE customer base

VTel uses Alcatel 100 gigabit routers at each of its 14 rural central offices serving its GigE customer base

VTel also operates a 100 gigabit per second backbone in the North East with peering points in New York City, Boston and Montreal, which supports the network and provides redundancy via alternate routes. Inside the home Vtel has to upgrade the equipment it offers consumers to match the gigabit speeds coming into the house. It purchased Actiontec routers for inside the homes, and now its customers are typically experiencing speeds of 925 Mbps to 950 Mbps.

VTel CEO Michel Guité, told the Wall Street Journal that the growth of Google Fiber helps him get approvals for the federal grants to upgrade the network. From the article:

That comes as Google’s Fiber project, which began in Kansas City and is now extending to cities in Utah and Texas, has raised the profile of gigabit broadband and has captured the fancy of many city governments around the country.
“Google has really given us more encouragement,” Mr. Guité said. Mr. Guité said he was denied federal money for his upgrades the first time he applied, but won it the second time around–after Google had announced plans to build out Fiber.

Most tellingly however, was Guité’s quote to the Journal where he says it remains to be seen if this is a “sustainable model.” Selling broadband access for $35 may be possible if much of your deployment costs were covered by federal grants, especially in a rural area where homes are spread out. Generally the more dense a population, the lower the broadband deployment costs, which generally translates in higher monthly bills for customers. But since customers aren’t sure why they need a gigabit yet, getting too far ahead of demand can mean VTel spends money to upgrade before customers want to pay money for the product.

VTel is scheduling community meetings to educate people about the benefits of having a a gigabit network as part of a drive to get customers to sign up. However, for those that are leery about living so far in the future, VTel still offers customers dial up access for $21.95 a month. Now, that makes for a digital divide.

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  1. I was a VTel customer until 2009 when we sold our home in Vermont. I loved the company. Best part was when you called them a human answered the phone who would generally solve your issue on the spot.

  2. Title is rather misleading. VTel’s planned FTTH coverage area is not “Vermont”, it’s actually part of sourthern Vermont:

    http://mapsengine.google.com/map/view?mid=z-hviQGr-hd0.kYLBdKWN2czs

    After Austin got its fiber network, we didn’t say, “Texas Gets a Gigabit Network”, right? So perhaps we shouldn’t needlessly startle people by writing a title which reads, “Vermont Gets a Gigabit Network”.

  3. i bet it wont be at my house! ever! just burlington area! yeah technically it’s vt but not anywhere near all of it!

    1. Actually, VTel’s rollout seems to be moving out from the Hartland (where CEO Guité lives) and Springfield (VTel’s headquarters) area.

  4. The headline should be, “A very small part of Vermont gets . . .”

  5. “Generally the more dense a population, the lower the broadband deployment costs, which generally translates in HIGHER monthly bills for customers.”

    ??????

    1. I had the same WTF moment.

    2. This right here makes me want to move to Vermont, an honest cable company………..words cannot describe how much faith has been restored in humanity. Where I live in Michigan high speed capabilities are IMPOSSIBLE except for mobile broadband. Verizon says I owe them 900$ for data services alone. https://www.youtube.com/watch?v=0ilMx7k7mso
      oh and those services I was paying for? I was receiving 10-20% signal strength and my speeds were between 10-150KB/s with an average ping of 200ms to chicago.

      I am moving to Vermont, you can count on that :D

    3. Its contemporary American journalism: Write…dont think

    4. @Adam, rural areas are eligible for more grants, which defray a substantial portion of the costs, more urban areas are thus more expensive, because the carrier can expect to spend less, and recover more of their costs. This is also a method of encouraging the deployment of broadband to rural areas.

  6. Living in New Mexico with public utilities like CenturyTel and PNM – and NM Gas Co – I can only dream of modern services.

    My sole access to for-real broadband is Comcast for double the price and speed with an ironclad governor.

  7. I live nowhere near Vermont. But this article made me hopeful in one respect. It’s one of those rare articles that uses the more honest “typically experiencing” terminology than the more frequently seen “up to” terminology as it relates to speed. I once had a WiMax Internet provider (Clear/Clearwire) that promised “speeds up to 12mbps.” Of course, when you use the “up to” phrase, 1mbps is within the “up to” realm. Typically, my speeds with them were about twice that of dialup speeds … still within the “up to” realm.

    Anyway, I hope that at some time in the future, Congress will pass a truth-in-marketing law that forbids the use of “up to” speeds in advertising campaigns – and encourages them to use the “typically experiencing” phrase (backed up with evidence, of course).

  8. idrivegreenly Saturday, April 27, 2013

    This sucks. Our tax dollars going to subsidize rural fiber buildout, and they have no idea if it will ever be economically viable. I live in Silicon Valley and don’t have fiber speeds to the home. Another example of ham fisted government program…

  9. Hope Mayor Bloomberg Get noticed,With Time Warner,Verizon and RCN giving 15 Mbps at an Avg cost of $55.It is Time for the NewYork to kick them out or get one like Vtel going in the city.That is the only way you can make New York a Techstartup hub.

  10. 125000 dollars per mile ?! 1/3 being taxpayer money…

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