Auditor’s Report: Just how bad our lawmakers screwed up the broadband buildout.

The headlines two years ago read, “Lawmakers skeptical of Starlink solution for broadband problems.” This was when hundreds of millions of dollars began pouring into Vermont to deal with the pandemic and we were seeing all sorts of stories about kids forced to attend school remotely from homes that didn’t have adequate or any internet service, especially in rural areas of our state. It all highlighted the idea that internet access today, like electricity before it, has become a necessity, not a luxury, in our modern society.

Starlink is the low earth orbit satellite-based high speed internet alternative to cable. All one needs to gain access to the service is a satellite dish, which the purchaser can set up on their own with no training required. In 2021, the start-up equipment cost $499 and the monthly service charge was $99. (Today, with inflation, it’s $599 and $110), which means that for less than $100 million, we could have fully paid for 50,000 rural, low-income Vermont households to get Starlink high-speed internet access installed, and their service fully subsidized for five years, just as soon as the dishes could be shipped and delivered.

The attitude of most legislators regarding Starlink at the time are well summed up by this quote from Rep. Laura Sibilia (I-Dover), “I have less than zero interest in facilitating or seeing the state facilitate that.” (VTDigger, 3/7/21)

Instead, Sibilia and her colleagues opted to go with their own complicated plan to install cable to “the last mile” of every dirt road in the state. As was noted at the time, such hook ups can routinely cost as much as $20,000 per household, and that does not include the in-home equipment and monthly service charge. It would also take years to complete. This government-run plan was to be executed by multiple state and regional bureaucracies comprised of a Vermont Community Broadband Board (VCBB), and ten (so far) Communications Union Districts (CUDs), which represent over 250 separate municipalities.  

What could go wrong?

Well, the State Auditor, Doug Hoffer, just released a twelve-page report about how the cable broadband expansion effort is going two years and over $150 million into what is anticipated to be a $600-800 million project. It’s about what you would expect from a massively bureaucratic, multi-layered government system with a myriad of players all chasing their piece of the money pie.

Hoffer and his office lay out ten potential risk areas contributing to this mess.

Risk 1, according to the report, is a potential lack of funding in 2024. Given the fact that we have already spent the bulk of $150 million setting up these CUDs and are expecting multiple hundreds of millions more in federal funding from things like the Inflation Reduction Act and the Broadband Equity, Access & Deployment (BEAD) program, this seems pretty shocking.

Risks 2 & 3 are the same realities all other aspects of our economy are dealing with as well: supply chain issues limiting access to necessary construction materials and an acute shortage trained labor necessary to do the work. So, even if the money does materialize, there is a strong likelihood that many rural Vermonters still won’t get access to high-speed internet any time soon due to lack of labor and materiel.

Risk 4 the Auditor describes as, “The Tension Between the VCBB Supporting the CUDs and Ensuring They are Viable Risks Allowing Any Weaknesses in CUD Business Plans to Persist and Deepen.” And Risk 5, the “Reliance Upon CUDs with Varying Levels of Expertise and Capacity May Delay Broadband Service to Some Vermonters, Lead to Increased Spending, and Establish Inequitable Policies and Access.” This seems like a polite way of saying the players here are in many cases incompetent and ill equipped to do this job.

And here the report also notes, “While the VCBB’s 2023 Legislative Report indicates that existing grant agreements address methods to support low-income and disadvantaged communities, we have not found any such language in the agreements.” A cautionary tale for anyone who hears stories from politicians about how such-and-such policy is going to prioritize helping the poor and most vulnerable. Not so much, after all.

Risk 6. “With the Exception of the Early VCBB Fiber Purchase, CUDs Have Not Been Partnering for Procurement of Goods and Services, Risking Higher Costs and Inferior Outcomes.” Again, the project is not being competently managed.

Risk 7. “Statutory Confidentiality Provisions Shield Some CUD Decision-making from the VCBB, Policymakers and Residents of the Member Municipalities Despite Receiving Tens of Millions in Public Funds.” So, the actions and spending decisions of these decidedly incompetent regional organizations is neither transparent to the public or the board tasked with overseeing their activity. Well, that doesn’t sound optimal, does it? The report cites instances of contract provisions that are not being made available for public inspection as including: “Proposed pricing plans, Requirements around public access programming and other content, and Service quality expectations.” Yup, those are all things we should probably know about.

Risk 8. The program is supposed to help low-income Vermonters afford high-speed internet, but never defines what “affordable” means. Or, “Lack of Affordability Definitions and Requirements Threaten to Reduce Service Connections, Undermine CUD Business Plans, and Create Regional Inequities.” This is what we’re paying for, folks.   

Risk 9. The program has and is open to conflicts of interest. “The Firm the VCBB Employs to Evaluate CUD Business Plans Has Also Consulted for a CUD and Does Not Appear to be Prohibited from Consulting for Others, Raising Conflict of Interest Risks.” Stir this in with the risks of mismanagement and lack of transparency, and oh what fun we can have!

And Risk 10. The way the state set them up, the CUDs may not qualify for federal BEAD funding. Whoops.

Now, full disclosure, my household got high speed cable internet service about eighteen months ago. It only took twenty years and over a dozen neighbors kicking in a few thousand bucks each to convince the cable company to run a line the mile and a half we are from the center of town. It works great. But if in 1999 when we moved in here a Starlink option were available on day one – as opposed to option B of waiting decades for cable -- we almost certainly would have gone with Option A.

For low income and rural Vermonters who need help accessing high-speed internet now, your politicians chose Option B for you. Enjoy the wait. And for all you taxpayers out there, sleep well knowing that they chose the most expensive, least efficient option available — that you get to pay for! 

Back in 2021, then Rep. Mike Yantachka (D-Charlotte) justified this historically bad decision, saying, “We think this technology is too young for us to actually consider it as a viable solution in Vermont.” Well, given that less than a year later when Russia invaded Ukraine, bombing that country’s infrastructure to rubble, the folks at Starlink basically flipped a switch and provided the Ukrainians with instant, nationwide high-speed internet service. So, Mike, et al…. you thought wrong.

• Rob Roper is a freelance writer with over twenty years experience in Vermont politics and policy.