Paradoxical affordability crisis facing publicly owned Vermont CUDs

NEK Broadband continues to bring affordable fiber access to the long-neglected corners of the Green Mountain State. According to the latest update by NEK Broadband, a recently completed rollout has delivered affordable fiber access to 700 new addresses across multiple rural Vermont communities. NEK Broadband is one of nine Communications Union Districts (CUDs) scattered across the state of Vermont. NEK Broadband alone represents 45 Vermont communities across Caledonia, Essex, Orleans and Lamoille Counties in the northeast part of the state (see the full list of communities here).

NEK Broadband currently offers four tiers of broadband service: symmetrical 50 megabit per second (Mbps) service for $80 a month; symmetrical 250 Mbps service for $103 a month; symmetrical 500 Mbps service for $135 a month; and a symmetrical gigabit per second (Gbps) offering for $250 a month.

Unlike many large private cable and phone companies, there are no hidden fees, usage caps, or long-term contracts with NEK pricing. As a non-profit municipality, any revenue created through broadband subscription services gets funneled back into building and repairing infrastructure and increasing affordability for local residents.

Vermont CUDs tell Fierce Wireless they are considering the creation of a new, statewide fund to help fill the gap defunding the ACP will create, leveraging “philanthropic dollars, local donations, and digital equity dollars.”

https://communitynets.org/content/nek-broadband-expands-access-affordable-fiber-rural-vermont

If NEK Broadband’s rates are representative of other CUDs, it’s not hard to see why some households might struggle to afford the lowest cost option at $80 a month. It’s also something of a head scratcher insofar as publicly owned advanced telecommunications infrastructure comes with a lower cost structure than investor owned that must generate profits for investors and pay income taxes.

That offers major advantages for access and affordability since more premises can be connected and offered lower monthly access fees than with investor-owned ISPs. Yet ironically, here we are witnessing the same affordability challenges as with investor owned ISPs. And not surprisingly so at rates that emulate those of investor-owned ISPs and unfortunately reinforce the perception of "broadband" as a luxury.

To give NEK Broadband the benefit of the doubt, it could well be those rates are needed in order to service capital expansion and finance costs. But given the affordability issue, it might behoove it and other CUDs to take another look at the numbers before resorting to setting up a charity to support affordable access. For example, can they pencil out at a flat $50/month for all residential users at the same bandwidth for all instead of slicing and dicing bandwidth into price tiers like investor-owned providers do? Most nearly all households could probably do fine over the near term with symmetric 100 to 300 Mbps, assuming they aren’t hosting server farms.