Cablefax The Magazine - July 2013 - 22

2013 Top Ops Awards
INDEPENDENT TECHNOLOGY AWARD
Vermont Telephone Co
and Cedar Falls Utility
On the surface, this CableFAX honor appears to be driven by
the story of two small, proud companies-one rural, the other
surrounded by rural communities-bringing big-time data
speeds to customers, aping Google's much-discussed but only
partially-deployed iber venture in Kansas City and Austin, TX.
Go deeper and you realize it's much more than that.
Yes, Vermont Telephone Co and Cedar Falls Utility of Iowa
provide tremendous data speeds to their customers. But it's
also possible they are handing these communities a lifeline
for the future. Although company representatives won't
acknowledge it, 1-Gig service could turn out to be a vital
economic driver, retaining and attracting businesses, academics
and citizens to areas that too often are overlooked,
particularly when it comes to infrastructure.
Vermont Telephone Co
Serving roughly 17,000 households in rural
Vermont, the family-owned company's visionary
CEO, Michel Guite, pledged several years
ago to bring VTel's service into the modern
age. Fiber to the home was one of the ways
he pledged to do so. " I want Vermonters to be
happy with the service they will be getting, " Guite said.
When Guite made his announcement, it was thought that
a hybrid iber coaxial plant would be the solution. Then
Guite and VTel had a revelation. For the same cost as upgrading
to HFC, VTel could go directly to iber.
Here's where it gets tricky. When CableFAX decided on
this honor, VTel was not yet offering video. That was taken
care of in July 2013, when VTel launched a 500-channel
product. Another tricky bit: Guite found the resources to
upgrade to iber via federal subsidies, including a $129mln
package in 2010. Government subsidies are like Kryptonite
to cable operators. They pay lobbyists to shout down subsidies
in Washington, D.C. But VTel gets a pass here since it
is using the federal money as intended, building in remote
rural areas of Vermont.
Speaking of money, VTel offers its speedy service to subscribers
for $35 per month, half the price Google is charging
in Kansas City. An article and blog in The Wall Street
Journal in late April touting the price difference between
Google in Kansas City and VTel that began " Look Out,
Google Fiber " attracted worldwide attention.
When we spoke in June with VTel's marketing manager, the
affable John Caceres, he said about 1500 customers were
using the 1-Gig service. " Take rates have been pretty high...
we've been going whole hog getting customers cut over, "
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Caceres added. About 60% of its customers take Internet.
" We expect the take rate [for Internet] to improve when video
is introduced, " he said. The goal is to have VTel's entire
footprint converted to iber by 2014. Vermonters have been
" blown away " by the 1-Gig service, Caceres said.
Most Vermonters have little need for 1-Gig service today;
still, a conversation we had with a VTel customer, who spoke
anonymously, was instructive for today and what might be
tomorrow. The customer works from his rural Vermont home
for a major tech company. " My boss is jealous that I have
more bandwidth [to do work] than he does in Manhattan, " he
said. And all this is in a small rural state, the nation's second
oldest-a place where more people leave than move in. It's
conceivable that VTel's 1-Gig service will do far more than
amass good reviews. It could be saving Vermont.
Cedar Falls Utility
CFU's story is similar to but a bit different from VTel's. Like
VTel, it's a small company, but it's a city-owned cooperative,
whose broadband/cable utility was organized in the early
90s, after a vote of Cedar Falls' citizens.
Earlier this year, after completing a 3-year network upgrade
that brought iber optics to every home and business in
* Purchased in 1994 from GTE, VTel has 60 full-time employees
serving 14 exchanges in 21 communities and was
first in Vermont to offer DSL service.
* The population density in VTel's service area is 55 people/
square mile. By contrast, in Kansas City, where Google is
offering 1 Gig service, the population density is nearly 30
times that (1,471 people/sq mile).
* CFU has 160 employees, providing four services: water,
electricity, natural gas and broadband/cable. While it had
been offering water and electricity for more than 100
years, it began offering cable in 1996 and home Internet
service the next year. It has about 85% of the cable
market; Mediacom, DISH and DirecTV have the remaining
15%, according to CFU.
* CFU and VTel are far from alone. Earlier this year The
Wall Street Journal reported that more
than 700 rural telephone companies
had replaced older systems with speedy
fiber to the home, according to the
Fiber to the Home Council, a trade
group and Calix, a broadband
equipment vendor.
July 2013
CableFAX: The Magazine
http://www.cablefaxmag.com
Cablefax The Magazine - July 2013

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