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ECFiber Update, August 2008
It’s been a couple of months since our last update about ECFiber’s project to bring a high-speed fiber-optic network to provide television, telephone, and broadband internet service to its member towns. We’ve been busy – a lot has happened. Here’s a summary:
- 23 Towns Participating
- Three Funding Proposals received, Oppenheimer Chosen
- Fixed-Price Commitment from Atlantic Engineering Group
Full story below the fold ….
23 Towns Participating
The last town presented its signed agreement from its select board at ECF’s Governing Board meeting on May 13th in Quechee, bringing the total number of towns participating in the project to 23. Representatives from these 23 towns will be moving forward over the next few months to continue the pre-registration process, approve documents governing the financing and implementation of the Project, and begin to review proposals to finance the design, construction and operation of the network.
Over 15% of the households in the ECFiber service area have already pre-registered for service, with Barnard currently leading the way at over 75%. You can see a list of participating towns, and their current number of pre-registrations, on the ECFiber homepage at www.ecfiber.net. There is also a list of each town’s ECFiber representatives at www.ecfiber.net/townlist.
Three Funding Proposals Received, Oppenheimer Selected
While the Governing Board has been working on the details of creating the organization, two sub-committees have been doing important work to secure funding for the Project and to finalize contracts for its operation. The Finance Committee received several proposals for the financing of the capital lease from potential underwriters, reviewed those proposals, and recommended an underwriting firm. At the June 10th meeting, the Governing Board authorized the Executive Committee to engage the chosen institution, Oppenheimer & Co., Inc., of New York City.
According to Kim Mooers of Sovereign Securities, who is acting as ECFiber’s financial advisor in the deal, Oppenheimer is essentially breaking the lease into pieces and bringing them to market in a public offering. Each “piece” is called a “certificate of participation” (in the Lease) and the entire mechanism is called a “COPs” (or certificates of participation) financing.
Loredo Sola, chair of ECFiber’s Executive Committee said Oppenheimer was selected from three qualified bidders because of their experience with COPs for fiber-to-the-home projects, their understanding of the project and the deal, their proven track record of succeeding with the sale of similar certificates, and their reputation in the market. Apart from a nominal initial signing fee, Oppenheimer has agreed to make all fees and out-of-pocket costs contingent on the success of the financing.
Now begins the important task for the ECFiber towns: disclosure of the Project and the financing structure to potential purchasers of the certificates and “due diligence”. Oppenheimer needs to be sure that the Project is on a solid financial and legal footing. To ensure that this information is thorough and complete, and that it complies with all legal requirements, ECFiber has retained Greenberg Traurig, LLP, a national law firm with an office in Boston, that is well-respected by the financial community, to help the 23 towns provide Oppenheimer with the information it requires.
The “working target date” for closing is currently mid-November, but Tim Nulty, Project Director, is cautious. “I’ve done a lot of complex financings and I know that there are always bumps in the road. Realistically, I will be delighted if the money is in the bank by the end of the year.”
Fixed-Price Commitment From Atlantic Engineering Group
ValleyNet, who will be contracting with ECFiber to provide the Project design and construction services, has entered into a letter of intent (the “LOI”) with Atlantic Engineering Group (AEG) for a fixed price construction contract (at $29.3 million plus contingency) covering the Project’s core network infrastructure, including the design, construction and installation of the actual fiber-optic cable network throughout the towns but excluding the hub building and the access equipment. AEG ‘s experience includes building 65 Fiber-to-the-Premises networks, including 16 that are municipally-owned. AEG’s proposal was based upon the financial model prepared by ValleyNet. The LOI states that “AEG considers the ECFiber network design to be sound and has tested the ValleyNet cost figures using its own proprietary pricing models. Our models are based upon our extensive experience building similar networks and have concluded that ValleyNet’s figures for the elements included [in the LOI proposal] are reasonable and achievable.” The LOI also states that “AEG believes that the execution schedule contained in the ECFiber model is reasonable and will commit to meet that schedule, subject to provisions allowing for events beyond AEG’s control.”
Benefits of Fiber to Vermont
At a recent conference in Burlington sponsored by the Snelling Center for Government, Lewis Feldstein, in his keynote address, pointed out the many advantages to communities when they increase the value of their social capital, the connections that their members have with one another. Being connected technologically is more and more a way to do that, and the all-day conference, entitled “Fulfilling Our E-State Potential: Building Community in a Connected Age,” included presentations and discussions on how Vermont can move forward as an E-State without losing the sense of community that is such an important part of its history and character.
ECFiber is working to bring high-speed networks to its member towns to benefit residents, small businesses, schools, organizations, and government, and we expect that this will become a model for other projects throughout the state of Vermont. The Snelling Center has created a website at snellingcenter.wikispaces.com/Symposium with information on the discussions that took place at the conference, and will continue to offer discussions and opportunities for input on these important questions.
ECFiber Timeline
Once ECFiber obtains funding for the Project, work is expected to proceed at a fairly rapid pace. Engineers will determine the exact layout for the network itself, and will survey each utility pole in the entire region to create detailed plans for attaching the fiber. Once the layout of the network is in hand, the location of the remote fiber hubs can be determined. All of the network lines will run to the main hub expected to be located in White River Junction, which will be built and fitted out with a redundant power supply, networking devices, telephone switching servers, and television controls.
At the same time, other aspects of the Project will get underway — implementation of a customer service operation center and software for a billing and collections system, hiring and training of customer service technicians, and connection of the fiber lines on the utility poles to boxes on the side of houses, shops, schools, and town offices to make the final connection to computers, telephones and televisions.
ECFiber currently expects the first connections to be made in the Fall of 2009, consistent with the Governor’s goals for Vermont as an E-State. It is expected that the ECFiber service area will eventually cover one-sixth of the area of the state itself.
Pre-Registrations
As we have indicated, the more pre-registrations that we can process before we actually begin wiring houses, the more efficient our work will be and the less the delay will be in getting everyone connected once the fiber is on your street. Please let your neighbors know that they can pre-register on the ECFiber website at www.ecfiber.net/preregister; there’s no obligation if their needs change before the service becomes available, but we assume that those pre-registering are serious about using our services as we work to make them available. There is also a pre-registration form that you can download and print at www.ecfiber.net/documents/ECFiber-pre-registration.pdf.
Sincerely,
Loredo Sola
Chair, ECFiber Executive Committee
ECFiber is a grassroots initiative to build a high-speed state-of-the- art fiber-optic network in over twenty Vermont towns, bringing cable television service, reliable telephone service, and high-speed Internet service directly to homes, schools, and businesses.
To find out more visit www.ECFiber.Net, e-mail to info@ecfiber.net, or write to
ECFiber, PO Box 8, White River Junction VT 05001