Vermont Plans Access Expansion, Deregulation of FairPoint, Pole Attachment
Despite a $176 million budget gap, Vermont Gov. Peter Shumlin proposed $13 million in capital spending over the next two years to improve high-speed Internet and cellphone coverage, the Democrat governor said during his presentation of the state budget Tuesday. He also proposed easing pole attachment regulations. Meanwhile, state Senator Vince Illuzzi (R), who opposed the sale of Verizon lines to FairPoint in 2007, is drafting a bill that would deregulate FairPoint, he said in an interview.
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The infrastructure spending will supplement the $40 million in revenue bonding already held by the Vermont Telecom Authority and more than $200 million federal stimulus money to jump-start broadband expansion and cell tower construction in unserved areas, said Shumlin, who took office earlier this month. The governor eyes full coverage by the end of 2013. Former Gov. Jim Douglas had said he planned to have the state fully covered by the end of 2010. The state also needs to address regulatory areas that could potentially hamper the progress of universal broadband in the state: utility pole attachment regulations, consolidated land use and environmental permits for the placement of poles, and long-term telecom lease agreements to erect infrastructure on state land and buildings, Shumlin said. Rapid build out could be delayed and “millions of dollars could be wasted if we fail to act,” he said. The governor will submit legislation to expedite the actions shortly, he said. The state’s Republican Minority Leader, Rep. Don Turner, praised the governor’s broadband commitment.
Meanwhile, Vincent Illuzzi, chairman of the Senate Economic Development, Housing and General Affairs Committee, said his committee is among those looking at changes in legislation to speed broadband expansion. One proposal seeks to exempt Vermont’s largest operator, FairPoint, from “regulatory burdens,” Illuzi said. That would allow the company to compete on a level playing field with cable companies, regional and independent operators and wireless carriers, he said. Those other companies have power over pricing while FairPoint needs approval from the regulators, he said.
The company is also subject to enormous financial penalties, sanctions to which its competitors have no exposure, said Mike Smith, FairPoint’s Vermont president, in a letter to Illuzzi. “This disproportionate and excessive penalty structure hampers our ability to invest in our network and compete with other providers,” the letter said. Illuzzi’s proposal would allow FairPoint to make rate changes without going through an approval process and lower fines for violations of service delivery standards. FairPoint expects to offer total broadband coverage to half of its exchanges this year, with 95 percent of that to be completed by June 30 and the remaining sections to be built on demand within 90 days, Smith said. But James Porter, a staff attorney with the Department of Public Service, has warned Illuzzi’s committee that the company had significant customer service issues and came close to being fined millions for service quality lapses (CD June 30 p9).