In a first for NH, town pays to get fiber broadband for all
CHESTERFIELD, N.H. (AP) — Since the days when 1,200 baud modems were called “fast,” New Hampshire has been lamenting how hard it is to get good online service outside of cities. Chesterfield, a small town on the Connecticut River west of Keene, might have found the way to finally make it happen.
Chesterfield is the first town to take advantage of a new state law that lets communities issue bonds to pay for broadband connections, just as they’ve long issued bonds to build highways, sewer lines and schools. Voters in March approved a $1.8 million bond and will string fiber to every home and business in this community of 3,500 people in a public-private partnership with Consolidated Communications, the successor to Fairpoint.
“The New Hampshire ability to bond is the first of its kind that I’m aware of in the country,” said Rob Koester, vice president of consumer products for Consolidated.
Rouzbeh Yassini, executive director of the UNH Center of Broadband Excellence, who carries the title “father of the cable modem,” is very enthusiastic about the move.
“Think about it: every home will have fiber in Chesterfield, New Hampshire. It used to be only downtown New York that had this . now the people in Chesterfield will have access to unlimited plumbing,” he said. “This is a huge milestone for New Hampshire.”
Great, but why did it happen in a town that’s far from the state’s geek hubs? When I asked at Chesterfield Town Hall, the answer was always the same: “You need to talk to Brad.”
As is often the case when change comes to a small town it was driven by one person, an engineer named Brad Roscoe. Roscoe is on a long and well-earned vacation right now, but he took time to answer my questions by email.
“We have lots of fiber running through our town. However, very little of it stops. The real issue is the classic ‘last mile’ issue where nobody wanted to install new fiber (or cable) where the population density was 10 houses or less per mile,” he wrote.
Here’s how it will work: Voters approved $1.8 million worth of bonds, which are long-term loans to the town government, to help build the network. Consolidated will pay the other $2.5 million estimated cost of stringing fiber to each resident in the town.
The town bond will be paid off by a monthly fee starting at $10 tacked onto the bill of broadband subscribers, with no cost to taxpayers. The fee is likely to go down and will not go up, Consolidated says.
The minimum speed will be 25 megabits/second download and 3 Mb upload, the federal definition of broadband, while “there are places in town that can get 60 to 80” MB download, Koester said.
The town is completing details on the bond, and Consolidated says that the entire network will be in place before the contract deadline of 24 months.
“We think we’ll do it much faster,” said Koester.
This project was possible only because of years of projects building fiber-optic “backbone” throughout the state, both by private companies and by state-supported projects such as Network New Hampshire Now.
“Proximity was important. The former Fairpoint network is very fiber-rich, with lots of fiber backbone on the network,” said Koester. “We are usually 7,000 feet or less away from fiber, in one way or another.”
Consolidated Communication’s enthusiasm for this project is slightly ironic. For many years the biggest obstacle to town-funded broadband in New Hampshire was opposition to government-aided competition by telephone companies, cable firms and other communications industries. New Hampshire state law has actually allowed municipal bonding for broadband for many years, but free-market fans constrained the definitions so much that nothing could actually get built.
Last summer’s passage of SB170 by the legislature with support from Gov. Chris Sununu changed that. Even so, this deal wasn’t easy, according to Roscoe.
“As far as the biggest stumbling block with the current deal, it was making sure that we met all the requirements of SB170, state law, and bonding requirements. No one had done this before, so we had to figure out a business model where this worked . with who owns what assets and things like that. That model can be used in other towns now that we have figured it out,” Roscoe wrote.
Consolidated will own the fiber and the connections when the bond is paid off and no other provider will be able to use them. So this arrangement isn’t exactly like a town bond used to build a public road; it’s more like a bond to build a sewer extension that gets paid off by the users but is not available to any other customers or providers.
Yasini at UNH agreed that this project falls short of the purest dream of municipal broadband that can be used by any internet service provider, but he said it’s still a big leap forward.
As for Consolidated, this move fits into the industry trend of phone companies increasingly becoming internet providers as people ditch landline phones for cell phones.
The company won’t release figures, but presumably the trend is similar to what we’re seeing on the rest of the planet. The World Bank estimates that the number of fixed telephone subscriptions in the world fell to just over 13 per 100 people last year, which is a whopping one-third decline from just a decade ago when there were almost 19 landlines per 100 people.
Phone companies are replacing income from voice calls on the old switched network with other sources, such as linking cell phone towers with the phone system via “backhaul” connections. Providing internet connectivity is an increasing part of that business model.
So does this mean that in the 2020 Town Meeting season Consolidated - and perhaps TDS or the few independent telephone firms left in New Hampshire - will be partnering with towns all over the state to spread fiber optic cables?
“Chesterfield has good geography, good economics. . They were prepared, they had worked on it already,” said Koester.
Other towns hungry for fiber to the home need to do their preparation.
“In other areas, we will sit down with towns, understand where the core need is, and overlay that with where speeds may be lower,” said Koester. “The first step is building a comprehensive broadband map, get non-disclosure from each provider. I think one of the things that towns are going to find as they go through this process is that they are pretty well served in a lot of cases. I think a lot of towns are going to be pleasantly surprised.”
As for little Chesterfield, it’s happy to be the test bed.
“That model can be used in other towns now that we have figured it out,” wrote Roscoe.