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Vermont gets a gigabit network. And it only costs residents $35 a month

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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.

24 Responses to “Vermont gets a gigabit network. And it only costs residents $35 a month”

  1. a-fool-on-the-hill

    fine print: 500 GB per month data transfer (up+down?) and then overage fees…
    thus: zero-to-overage-fees in 67 minutes of 1 Gbps traffic…
    but, it’s a start… one moderation of this data limit accounting, which is technically
    easy to implement, is for locally-routed bits to be unlimited while internet routed bits
    are tallied… yet, at even-grossly-inflated peering rates, each GB overage should
    cost ~$0.02/mo rather than dollars-per-GB… at some point, someone will step
    p and offer modern pricing for what is, as susan crawford maintains, an essential utility and the three-billy-goats-gruff pricing now keeping entrenched and unsustainable business models aloft will simply be routed around…

  2. Charles05663

    I live in Springfield and they are by far the best phone company I have every dealt with. They answer the phone on the first ring and will make changes to your phone service while on the phone. I dropped MCI for my long distance after they pissed me off to no end and went to VoIP. I called VTel and had them drop MCI from my account and she made the change while on the phone. I called MCI and told them to drop my account. The lady at MCI asked when I contacted my telephone company and I informed her I just got off the phone with VTel and the did it while on the phone. She argued with me that was impossible. I said then call them. A few minutes later the MCI lady called back and told me she has never seen service like this and I should and I should stick with them. I did as they are very customer oriented and the only other option in town is Comcast.

    I have their fiber and it is wonderful although I have never hit the top speed. I average about 500 Mbs up and down.

  3. Please come to Connecticut. I can’t even get 1 megabit upload speeds in the Hartford suburbs for less than $49 per month. Hard to believe it is 2013 in the country that developed computer networking if you only look at network speeds around here.

  4. It’s “gigabit capable”. We had fiber run in rural Lake City, Florida, too, with the same Federal grant money. Let me tell you: just because the infrastructure is capable of gigabit, does not mean you’re going to get gigabit speeds.

  5. Shankar

    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.

  6. 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…

  7. Alec West

    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. 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.

  9. Adam Smith

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


    • Samuel Smeltzer

      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.
      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

    • Peter Davio

      @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.

  10. wymanator

    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.