RRA pitches municipal telecom network
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By STEPHANIE M. PETERS STAFF WRITER - Published: September 4, 2009
It's been about 15 months since the Rutland Redevelopment Authority's Tom Macaulay last publicly floated his plan to construct a fiber-optic municipal telecommunications network between Middlebury and Pittsfield, a project that largely stalled in the interim because of the economy.
In the meantime, the extra time has allowed the RRA to hone its business plan for Rutland Telecom and contract with a consultant, Tim Nulty, responsible for setting up both Burlington Telecom and EC Fiber, a similar project between White River Junction and Montpelier that just had its groundbreaking this week.
On Thursday evening, Macaulay was back before representatives from nine of the 14 communities in Rutland, Addison and Bennington counties invited to participate to present the revised proposal – the highlight of which is that being wired into the high-tech service won't require a financial buy in the municipalities.
"What we're proposing to do is create a limited liability corporation that is wholly owned by the RRA," Macaulay explained in an interview Thursday afternoon. "That LLC itself can apply for federal dollars, which is what allows the towns to be protected from financial risk."
As Macaulay explained in answer to one question Thursday, it's possible for the RRA – itself technically a separate municipality from the city – to own and operate an LLC. It hasn't been formed yet because once done, an LLC only has 90 days to begin doing business, Macaulay said.
Meanwhile, Nulty said $55 million in funding (which also accounts for debt service until the target date for the company's profitability) would likely come from nonrecourse project financing made possible by the 2008 Farm Bill.
He said he's confident Rutland Telecom shouldn't have trouble being granted the funds; similarly, EC Fiber just submitted an application for stimulus fund and the construction company on the project is so confident the money will be granted it began mapping telephone polls on spec this week in Tunbridge.
According to Macaulay, the only thing the invited municipalities – which include Poultney, Fair Haven, Castleton, West Rutland, Rutland Town, Rutland City, Proctor, Pittsford, Brandon, Middlebury, Mendon, Killington and Pittsfield and Dorset – need to do is sign a letter of intent and pick a town resident to serve on Rutland Telecom's board of advisers.
In return, towns would receive payments in lieu of taxes, or PILOT, and revenue sharing based on a town's volume of participation when the company becomes profitable – something that Nulty estimated would happen at the end of the fourth year in business. Participating towns can also expect that every residence will be connected "without excuses," product packages – including cable television, Internet and phone service – cheaper or on par with private competitors like Comcast and "superior service."
The RRA hopes to know soon what the communities' interest is in participating; Macaulay, Nulty and possibly representatives from towns involved in EC Fiber are willing to speak to select boards, but the RRA is hoping to receive letters of intent by the end of September or early October.
The project is also expected to create 45 to 50 new, permanent jobs and be operated out of the city in a facility separate from the RRA.
stephanie.peters@rutlandherald.com
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