Vermont’s legislators asking the Feds to audit $116 million telecom project

In Daily News Briefs by Wireless Estimator

Vermont’s lawmakers are asking federal regulators to conduct an audit of a $116 million grant and loan provided to VTel Wireless, stating that the company has passed by many communities with the broadband service it was paid to provide in Vermont.

With similar resolutions, the House on Thursday passed  H.R.19, and the Senate’s version was referred to the Finance Committee.

The resolutions said that “In July 2010, the federal Rural Utilities Service (RUS) awarded an $81 million broadband stimulus grant and a $35 million government-backed loan to VTel to build a one gigabit fiber network for VTel’s existing customers, which has been completed, and to construct a wireless Internet system to serve nearly all of Vermont’s 33,000 unserved households plus additional businesses and anchor institutions.”

However, according to the resolutions, “VTel’s wireless coverage seems neither as expansive nor as robust as anticipated.”

The legislators also note that VTel failed to build three telecommunications towers in the State that should have been completed by the September 2015 construction deadline set in the RUS stimulus award.

The House urged the USDA’s RUS to conduct a comprehensive financial and performance audit of the grant and loan that it awarded to VTel, including a finding related to the number of the 33,000 unserved households that remain unserved; and to require the VTel to construct the three unbuilt towers or provide equivalent service to those areas that the towers would have served.

When the RUS announced the award in 2010, Vermont Senators Patrick Leahy and Bernie Sanders, called the stimulus grant and loan “a ‘game changer’ for Vermonters who so far have been left behind on access to high-speed Internet.”

“While much work remains to be done in sorting out the details and making sure that broadband access reaches and is affordable for all Vermonters, this is an important step toward achieving universal broadband access in our state,” Sanders said.

Last month, David Weinstein, senior policy adviser and acting state director for Sanders, told John Lippman at Enterprise, “It is enormously frustrating that, almost 3 1 ⁄ 2 years after receiving federal funds, VTel has failed to improve phone service along hundreds of miles of Vermont roads as they said they would.”

The award was part of a $7.2 billion broadband investment that was included in the American Recovery and Reinvestment Act. The RUS was charged with awarding $2.5 billion of those funds to expand broadband access in rural America.

Jonathan Adelstein was the RUS’s Administrator from 2009 through 2012. He currently serves as President & CEO of PCIA – The Wireless Infrastructure Association.

Earlier this month, the RUS published a Notice of Solicitation of Applications (NOSA) in the Federal Register for the Rural Broadband Access Loan and Loan Guarantee Program (the Broadband Program) for Fiscal year 2016.  Loans are available ranging from $100,000 to $10 million.  Applications will be accepted through July 7, 2016.