By Gene Bifano
I am all for competition, which usually stabilizes prices or lowers them for service and goods.
However, in the case of VTel, it is unfair competition and, I believe, in violation of their grant. Why? Because they received a $30 million grant to provide broadband service to under-served parts of Vermont that cannot get broadband Internet service.
In this Valley and all of the Waitsfield/Champlain Valley Telecom area, to my understanding, broadband is available to every home or business – 100 percent. In fact they are providing fiber to the home/business for all their services, well ahead of other carriers. This is very costly. Hence, we are not under-served and there is no reason for VTel to poach Waitsfield/Champlain Valley Telecom's territory. There is also satellite Internet as well.
Look at VTel's history. They were a small-time telephone company in Springfield that could not match the service that Waitsfield/Champlain Telecom provides to us. And all of a sudden they can come into our neighborhood and put up a 90-foot tower. Hey, let them put up a cellphone tower, that is what we need – not broadband Internet.
And what about our buy local campaign – Springfield is not local to us, is it? And what about all the opposition to cell towers because of radio emissions and unsightliness?
This thing, from my understanding, will be emitting hundreds of a percent higher radio emission than a cell tower. There is no public good that this tower offers. It doesn't meet the state's standard of "public good."
I clearly remember the terms of the grant as presented, about three years or so, because it was Senator Bernie Sanders who had the press conference to announce the grant. He was so proud because it was a local company and they would be solving this huge problem. Well sort of, it is owned, from my understanding, by a family in Connecticut.
In my letter to the Vermont Public Service Board when this happened, I cautioned that they would be using this money to come into areas that have broadband and cherry pick – a term used to describe stealing another company's best customers. The better way to have achieved the goal of providing broadband to the under-served was to give the funds to the local company to invest in their infrastructure. I knew the plan they came up with wouldn't work.
Again, I am all for competition, but using federal funds to steal from others is unethical and just plain wrong. Especially when we still hear the governor and other politicians wanting to invest more of our tax money to provide the broadband service that VTel is supposed to provide with the $30 million they already got from us.
I understand cherry picking and why they are not providing broadband in under-served locations. Simply that even with the relatively low cost of providing service through wireless, my guess, and it's just a guess, is they still cannot earn enough from the limited customer base to cover the cost of operation, much less make a profit, without overly burdening their customers/ratepayers.
In fact that is why the local carriers don't provide the service. They would love to provide the service. But they cannot because it is economically unfeasible without overburdening their customers.
The way it works in tariffs and any business is you take your total cost of operation plus some profit and divide that cost by your customer base. If you have highly skewed cost in one area it is blended with the others which raises the overall cost. In this case it's too much.
There are two things the government(s) can do: Allow the carriers to charge more to service the outlying areas or allow tax credit for the additional cost of service or some blend of both.
Again we must stop, in my view, a corrupt and unethical effort by VTel to poach in our neighborhood that is serviced by a truly local Vermont company. Yes, we all like competition, well in some cases, but let us do it fairly.
Bifano lives in Warren.
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