House asks federal government to audit VTel wireless project

Fifty-one lawmakers are calling on federal regulators to conduct an audit of a $116 million telecommunications project that started in 2010.

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HOUSE ASKS FEDERAL GOVERNMENT TO AUDIT VTEL WIRELESS PROJECT APR. 15, 2016, 8:13 PM BY ERIN MANSFIELD 21 COMMENTS VTel vice-president Diane Guité speaks at a ribbon-cutting ceremony in Hardwick. (Right to left:) Her father, VTel president Michel Guité, Rep. Peter Welch, D-Vt., Gov. Peter Shumlin and Sen. Patrick Leahy, D-Vt., look on. Photo by Hilary Niles/VTDigger VTel Vice President Diane Guité speaks at a ribbon-cutting ceremony in Hardwick in 2014. With her are, from right, her father, VTel President Michel Guité, Rep. Peter Welch, D-Vt., Gov. Peter Shumlin and Sen. Patrick Leahy, D-Vt. File photo by Hilary Niles/VTDigger Fifty-one lawmakers are calling on federal regulators to conduct an audit of a $116 million telecommunications project that started in 2010. Five senators and 46 representatives have signed on to sponsor concurrent resolutions in the Senate and House asking the U.S. Department of Agriculture to examine VTel Wireless’s performance in building out wireless broadband infrastructure. The identical resolutions ask the USDA’s Rural Utilities Service to also do a financial audit of the grant and loan that VTel received and to require VTel to finish building three remaining towers on the project. Rep. Laura Sibilia, I-Dover, spearheaded the resolutions. The House passed H.R.19 on Friday. The Senate’s version, S.R.13, has been referred to the Finance Committee. VTel was awarded an $81.7 million grant and a $35.2 million loan in 2010 to run fiber-optic cable to households and major institutions in the Springfield area and build 119 towers and antennas to set up a system of wireless broadband in the state’s most rural areas. As part of the application to the USDA’s Rural Utilities Service, VTel was also required to invest tens of millions of its own money into the project. The timeline to complete the project was extended in the summer of 2013. The company now advertises wireless Internet service in more than a dozen towns. But the resolution says the following: “Despite the obligations VTel agreed to in accepting the RUS funding, it is apparent that the wireless project has failed to meet the stated objectives of the grant to the detriment of many expectant Vermont communities.” “VTel’s wireless coverage seems neither as expansive nor robust as anticipated, and there is doubt that many of the 33,000 unserved households are now in range to receive a reliable signal,” the resolution says. “It also appears that VTel may have placed unwarranted focus on competing with the highest possible speeds in its previously existing service area rather than building out a new wireless system.” Michel Guité, the president of VTel Wireless, responded that the project, called World of Wireless, is largely complete. He said about $24.3 million of the USDA Rural Utilities Service grant and $10.5 million of the loan went toward the wireless project. The company used $22 million in its licensing and $22 million of its own money, he said. Guité said the company built 124 towers and antennas, covering about 97 percent of the locations promised under the deal with the federal government. He said he has about 1,000 wireless customers in Vermont, “and it’s a long, slow process because it’s probably providing service to 10 or 15 people per town.” “Our plan was to get to about 8,000 over about four years, and I think that’s probably achievable,” Guité said. “There’s nothing standing in the way. It’s following the pattern that we had predicted.” Laura Sibilia Rep. Laura Sibilia, I-Dover. File photo by Amy Ash Nixon/VTDigger Guité said that would give him about 25 percent market share. But he cautioned that not everyone in rural Vermont would want the service he offers; some might prefer to buy Internet service through a satellite or cable company, he said. Sibilia has been one of Guité’s most vocal critics. “Originally, we were looking at an investigation, but these are federal funds and it’s hard for us to investigate federal funds,” she said. “This was not an issue for me coming into the session,” Sibilia said. “I have been waiting for VTel (service) to come on, as it were. Where I’m from, the valley, people were ecstatic. I was ecstatic. … A lot of towns have been waiting.” Rep. Cynthia Browning, D-Arlington, is a co-sponsor on the House resolution. She said there’s a VTel facility that’s turned on in West Arlington, but her constituents in the area do not know how to get Internet service from VTel. “If VTel can tell me, ‘No, we’ve got 1,200 subscribers in that area,’ I’d be happy to hear that,” Browning said. “But I don’t understand what all the money went for and who got coverage for it.” Jim Porter, the telecommunications director at the state’s Public Service Department, is also frustrated. Porter said his office has been trying to get VTel to send in its “granular, address-by-address data for its coverage” in order to determine whether certain areas need more funding for broadband. “We’ve requested it for, I believe, two towns and have not received that data,” he said. “Anything that would help ensure that VTel performs its obligations under the federal grant, I think we would welcome.” Guité said Porter’s request is not that simple. Guité said his company uses the same off-the-shelf software to project where its wireless signal reaches, and has shared that with Porter, but the company may not be able to find every rural home that can’t receive VTel’s signal.