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ECFiber: Empowering Communities with Future-Proof Fiber Optic Network

Learn about ECFiber, the community-owned fiber optic network transforming connectivity in Vermont. Discover its funding model, milestones, and impact. Get involved to bring high-speed internet to rural areas!

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ECFiber: Empowering Communities with Future-Proof Fiber Optic Network

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  1. ECFiber The East Central Vermont Community Fiber Optic Network “Community Owned, Subscriber Financed” Our Mission: Bring state-of-the-art, “future-proof” connectivity to ALL homes, businesses, and civic institutions in member towns. 1 www.ECFiber.net

  2. What is ECFiber? • Public Private Partnership in East Central VT • Public • Network is owned by 24 member towns • Towns joined in an “Inter-local Contract” in 2008 • Now a Communications Union District • Private • Operated by non-profit ValleyNet – telecom expertise • Financially self-standing and sustainable • Under VT law it cannot be supported by local taxes. • Ultimately, operating surpluses will be paid to member towns 2 www.ECFiber.net

  3. Why ECFiber? • Rural Areas ignored by Incumbents • Incompetent “Regulators” – especially Federal • “Regulatory Capture” • Define Broadband Downward • Ex. - Recent award of $66M over 6 years in VT to Fairpoint for 10/1 DSL ??? • Memories of Rural Electrification/Telephone • “we’re mad as hell and we’re not going to take it any more” 4 www.ECFiber.net

  4. Average Density Matters 5 www.ECFiber.net

  5. ECFiber Use of Cash Surplus • When revenues exceed all expenses, the “excess revenues” can be used for: • First extending the network to other locations, and only then* • distributing back to the Towns • *ECFiber’s Governing Board has committed to using all excess revenues for network expansion until every citizen of every member town has service. 6 www.ECFiber.net

  6. So how is it paid for? • No Town Funds used or at risk • Subscriber/system revenues support debt service, operating costs, and continuing capital investment • 1) Initial Operations (2008-2011) ~ $500K • funded by non-profit ValleyNet (and pro bono vendors) • 2) Bootstrap Crowdfinancing (2011-2015) - $7M+ • Local citizens invest, loaning money to the project • Over $7M raised, from over 450 investors • 3) Institutional Investment (2016) - $9M 7 www.ECFiber.net

  7. Fundraising History (000s) 2008-10 - $ 500 (ValleyNet) 2010 - $ 900 (Crowdfinance) 2011 - $ 400 “ 2012 - $ 1,700 “ 2013 - $ 1,700 “ 2014 - $ 1,500 “ 2015 - $ 850 “ 2016 - $ 9,000 (Institutional) 8 www.ECFiber.net

  8. “Crowdfinancing” • Local funds from (mostly) subscribers • $7M raised, 450+ local investors • 18 month holiday (interest and principal) • Then 6.65% tax free paid back over 15 years • Need $30k per mile, 5-6 subscribers • NOT GENERAL OBLIGATION DEBT • 340 miles financed (21 of 24 towns!), 1500 subscribers, 35% take rate • Bridge to “Real” financing 9 www.ECFiber.net

  9. Crowdfinancing • Benefits • Provides funding when no one else is interested • Community Involvement • Word of Mouth Advertising • Prove Business Model over time • Drawbacks • Effectively excludes poorer neighborhoods • 15 year amortization too short • Limited Scale • Sub-Optimal Network and Marketing 10 www.ECFiber.net

  10. Post Crowdfinancing • 1100 additional “unserved” miles = ~$33M needed • Easier to build and market ENTIRE TOWNS • Outside financiers now interested • $9M raised in 2016 • 6 towns/250 miles in 2017 • Plan to complete all “unserved” by 2019 • Last 300 miles in Hartford, Montpelier, Woodstock • Well served by cable – business model not proven 11 www.ECFiber.net

  11. What’s been done so far? • Network Miles: ~300 miles now in service • Passing ~ 4,200 residences and businesses • Customers: >1,500 connected • Revenue ~ $100 per customer per month ~11 FTEs • Double Play – no video (yet) • Positive EBITDA in fourth year of operations • Covers operating expenses and debt service but not growth capital • positive EBITDA (cash flow before capital expenditures and debt payments)after three years 12 www.ECFiber.net

  12. SVC AREA AND PLANNED THROUGH 2016

  13. VTA Fiber Trunks in Central VermontOrange = OCFC (completed 2014); Blue = Sharon/Pomfret BBID's; Brown/Red = N. Randolph/Brookfield, Braintree; Green = Central Greens

  14. VTA (DPS) Projects in ECFiber Territory • Vermont Grants for Underserved Areas: • 2014 - $214,000 for locations in Randolph, Norwich, Thetford • 2015 - $356,000+ Pittsfield, Randolph, Royalton, Norwich • 2016 - $155,000+ Stockbridge, Randolph, Sharon, Chelsea, Norwich • Dark Fiber Trunks: 144-strand fiber-optic cable • Fibers available for long-term lease by various entities • Supports both “middle-mile” and “last-mile” usage: • designed & built with frequent slack loops and access points • Orange County Fiber Connector (OCFC) 2012-13: 39 miles • “Business Broadband Improvement District” (BBID) extensions, • 2014-15 “Cellular Backhaul Enhancements” trunks, • Approx. 80 new miles this year in ECF territory alone. www.ECFiber.net

  15. Can This Work Elsewhere? • The financial model does work in unserved areas, but … needs to be run as a business • i.e., paying back investors is as important as social goals • Requirements • Lead/Local Investors – no town risk • Angry and Determined Communities • State – Regulatory/Grants/(Dark Fiber Availability) • Willing Service Provider (ValleyNet) • Operations Company • Dedicated Volunteers • Governance, Marketing/Sales/PR, Vendors • PATIENCE 16 www.ECFiber.net

  16. Your turn! Questions? Contacts: Carole Monroe, CEO carole.Monroe@ecfiber.net Stan Williams, CFO, stan.Williams@ecfiber.net 17 www.ECFiber.net

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