After Years and Millions, VTel’s Wireless Promises Unfulfilled

Dispatcher Martha Morse works during her shift at Hartford dispatch in Hartford, Vt., on March, 4, 2016.  (Valley News - Jennifer Hauck) <p><i>Copyright © Valley News. May not be reprinted or used online without permission. Send requests to</i></p> - Jennifer Hauck | Valley News
Dispatcher Martha Morse works during her shift at Hartford dispatch in Hartford, Vt., on March, 4, 2016. (Valley News - Jennifer Hauck) <p><i>Copyright © Valley News. May not be reprinted or used online without permission. Send requests to</i></p>

Springfield, Vt. When it comes to VTel’s her alded plan to bring mobile phone service to Vermont, the company isn’t talking.

The Springfield, Vt., telecommunications company in 2012 and 2013 won separate funding grants from both the federal government and the state to launch wireless mobile phone service to areas of Vermont that do not receive cellular phone service.

The federal money was to make mobile phone service available along 941 miles of state roads where drivers cannot get a cellphone signal. The state money was to add mobile voice capabilities across VTel’s statewide wireless broadband network.

Neither project appears yet to have been deployed, based on a Valley News investigation.

Meanwhile, the company has argued with state regulators over whether the cellphone service it offers needs to comply with rules governing the geographical location of callers that is automatically supplied to dispatchers when customers make emergency calls.

For the first project, VTel won a $2 million funding grant from the Federal Communications Commission to cover the so-called “black holes” along Vermont roads where cellphone service is unavailable. The grant was announced with great fanfare, including praise for the project from Gov. Peter Shumlin and all three members of Vermont’s congressional delegation.

VTel President Michel Guite said at the time that Vermont was “becoming a leader in wired and wireless broadband innovation.”

Nearly four years later, that project appears to be in limbo. VTel has not yet been authorized any of the $2 million in FCC funds a nd the company has barely publicly discussed it since, according to FCC records.

Also slow to materialize is the project funded by a $2.6 million award from the former Vermont Telecommunications Authority, known as the VTA, to provide mobile voice service around the state by utilizing the technology behind VTel’s 4 G LTE wireless broadband data network that was built with $35 million in federal stimulus funding.

VTel’s wireless broadband project was part of a federal grant and loan package that the company received to bring wireless high-speed Internet access to nearly all homes in the state , along with building a fiber-optic network in VTel’s core service area around Springfield.

VTel’s wireless data networks already support third-party voice-over-IP services, known as VoIP, and include programs such as Skype and Google Voice. Such voice services work over the Internet by downloading an app, but can be unwieldy to use with a handset. VTel says on its website that it will additionally “begin offering” voice-over-LTE service, known as VoLTE, over its 4G LTE network in 2016. VoLTE technology offers better quality service — less background noise and fewer “dropped packets” in which a call cuts out for a second — that would forgo the need to download an app.

Still, officials at the state Department of Public Service, which picked up responsibility for overseeing the expansion of broadband and cellphone service after the VTA was dissolved last year, say VTel hasn’t informed them when the company’s m obile phone service will become available.

“We haven’t heard anything” from VTel about the phone service, said Jim Porter, director of telecommunications and connectivity at Vermont’s Department of Public Service.

Members and staff of Vermont’s all-Democratic congressional delegation uniformly expressed dismay over VTel’s lack of progress.

U.S. Rep. Peter Welch said the lack of cellphone service on some Vermont roads is a safety concern.

“I am disappointed that federal funds dedicated to achieving this goal have yet to be put to work (nearly) four years after they were awarded,” said Welch. “It is my hope that VTel, the state, and the FCC resolve any issues that stand in the way of making use of these funds as soon as possible. Providing access to reliable cell service for all Vermonters is not just an issue of convenience, it is one of safety.”

David Weinstein, senior policy adviser and acting state director for U.S. Sen. Bernie Sanders, said, “When we first heard last July that VTel was considering turning back the FCC grant, we expressed our serious concern to the company about the missed opportunity to expand cellphone coverage in rural Vermont. It is enormously frustrating that, almost 3 1 2 years after receiving federal funds, VTel has failed to improve phone service along hundreds of miles of Vermont roads as they said they would.”

U.S. Sen. Patrick Leahy, called cellphone service “a matter of public safety and a pillar of the age we live in,” and said he expects “any entity that accepts significant federal funds” to be accountable. “I expect those promises to be kept, and for federal agencies to hold such entities accountable if those promises are broken,” he said.

Gov. Peter Shumlin, who has made extending wireless communication in the state a priority of his administration, did not respond to multiple requests for comment.

Given the scope of VTel’s statewide telecommunications infrastructure project to bring wireless broadband service across Vermont and to connect 15,000 customers with fiber-optic lines, delays are not unexpected. The rapid pace of technological innovation in telecommunications — from 3G to higher-capacity 4G LTE and now with 5G on the horizon — can render plans out of date just as they are getting underway. But the lack of updates from VTel about its mobile phone service plans stands in contrast to the publicity that surrounded it at the time the funding awards were announced.

Guite, VTel’s president, and other company representatives did not respond to multiple requests for information and comment.

Expanding Into Mobile Phones

A local phone company that for many years had served landline customers in the Springfield area, Vermont Telephone Co. took a big leap — and a big gamble — when, through its subsidiary VTel Wireless, it won $116 million in federal grants and loans to blanket Vermont with a wireless broadband network as part of Washington’s efforts to bolster the economy through stimulus funding in 2010.

Eventually, through securing additional state and federal funding and contributing assets it valued at $30 million, the entire cost of VTel’s broadband project has totaled at least $152 million.

Besides providing fiber-optic broadband to the Springfield area, the project promised to reach more than 61,000 homes through its wireless network. This included about 33,000 homes currently without Internet access. The project was dubbed WOW, for “Wireless Open World.”

VTel has not revealed how many customers have signed up for its Internet service, but the company reported in its annual filing with state regulators that the system had 265 wireless customers at the end of 2014. In an interview for the February issue of V ermont Business Magazine, Guite said the system was still in a “shake down” period before undertaking more aggressive marketing.

But while VTel boasted about the easy streaming of TV shows, movies and music that the 4G LTE network would provide, its offering lacked one fundamental component of wireless broadband technology: cellphone service. That’s because the wireless broadband project for which VTel received federal funding for in 2010 was a data network, not one easily equipped to handle mobile voice services.

The opportunity to add mobile phone service over its data network arose a year after its stimulus funding award, in late summer 2011, when the state telecommunications authority began negotiating with VTel to provide voice services in areas where cellphones didn’t work. The VTA funding would be applied to “infrastructure and equipment” so that VTel could augment the wireless broadband network it was building with voice capability, VTA said.

A further opportunity for VTel to secure funding arose in the spring of 2012 when the FCC announced a “reverse auction” grant program, known as the Mobility Fund, to help carriers bring cellphone and data service to rural roadways that lacked it. The following October, VTel was a winning bidder for $2 million in FCC funding to bring mobile phone and data service to 941 miles of Vermont roads that didn’t have cell service, including unserved areas of Orange, Caledonia, Orleans and Washington counties. In the Upper Valley, the grant covered portions of West Fairlee and Corinth. VTel would become a “retail provider of cellular service,” the company said.

VTel at the time did not publicly announce the technology it would use to provide mobile phone service, but Guite said in testimony filed with the state’s Public Service Board that “we will sell our own handsets to customers for voice services … (and utilize) a combination of 3G and 4G wireless devices” using a combination of radio spectrum licenses the company owned. (The Mobility Fund money was to be applied to extend cellphone service to areas outside the wireless broadband footprint because federal rules bar tapping two different sources of federal funding for the same territory).

Three months later, in December 2012, VTel’s negotiations with the Telecommunications Authority bore fruit: It won a $5 million grant to add mobile phone service to its 4G LTE network in addition to 19 “target corridors” in southern Vermont, including portions of Windsor County, that did not receive cell service.

The company initially said the total cost of the cellular phone project was $15 million, and would extend voice service by piggybacking on VTel’s wireless broadband 4G LTE network.

“Our original WOW wireless broadband project award did not include funding to tap into the cellular capabilities of our 4G LTE network, or to provide 3G signal for phones that Vermonters already have,” Guite said in a statement at the time. “This award, and the recent FCC Mobility Fund award, make our plan to bring cellular service to Vermonters possible.”

However, by the time the contract was finalized, in May 2013, the state grant had been nearly halved to $2.6 million as plans to deploy it to unserved target corridors in southern Vermont were dropped in favor of focusing solely on the existing 4G LTE network.

Nonetheless, more than four years after VTel began laying the groundwork to offer mobile phone service — and nearly three years after the company won its first funding to make that happen — VTel has not offered a time frame for its introduction. But buried under the “Frequently Asked Questions” page on its website, is a note that the company will “begin offering” voice service in 2016.

Conflict Over 911

VTel’s plans to offer cell phone service have also brought the company into an unusual conflict with state officials over complying with federal rules to provide geographic location information for callers placing 911 emergency calls on its network.

Federal rules mandate that wireless phone carriers must provide the longitude and latitude geographical location, known as enhanced 911 or E911, of the cellphone caller through triangulation by “pinging” the signal among cell towers or through GPS technology.

Providing precise geographical information has become increasingly important as people switch from landlines, which are associated with a street address, to mobile phones.

Scott Smith, director of Hartford’s Emergency Communications Center, which handles 911 calls for Hartford, Windsor, Woodstock, Norwich, Sharon and Royalton, said knowing details about the location of a person calling 911 from a mobile phone is “extremely valuable, especially with people who don’t know the area and those in a life-threatening situation.”

He said it is not unusual for the dispatch center, which receives between 1,000 to 1,300 calls a month, to get calls from “people in ski areas who have skied out of bounds” or lost hikers on the Appalachian Trail. By being able to identify the caller’s location, Smith said, operators at the dispatch center can either guide the caller back to safety or direct a patrol crew to the lost caller.

VTel’s stand on the issue came to light in 2013 when it wanted to secure an FCC Mobility Fund grant. To qualify, VTel first had to be designated an “eligible telecommunications carrier,” known as an ETC, by the Public Service Board, a quasi-judicial authority that supervises the rates and quality of service of Vermont’s public utilities such as cable TV, electricity, gas, water and telecommunications.

During the 2013 Eligible Telecommunications Carrier proceeding, in written replies to questions from the board’s staff, VTel argued that “E911 requirements that apply to ETCs depend upon the type of service being provided,” and noted that the standards that apply to typical wireless phone carriers fall under a different section of the law than the standards for the VoIP technology that VTel might use for its cellphone service.

Although VTel has indicated it eventually plans to offer VoLTE, the argument it advanced to regulators involved its use of VoIP technology.

Both state and FCC officials said that is contrary to the practice of all other wireless carriers in compliance with FCC requirements.

While VTel did not provide much rationale for its position, regional and small wireless phone companies have said that complying with the mandate is costly when compared with the volume of call traffic their networks bear.

The section of the FCC rules that cover location information for VoIP requires carriers to provide the dispatcher with only the phone number of the caller and the “registered address” — typically the billing address — with which the number is associated, the VTel filing noted.

A cellphone network that doesn’t provide dispatchers with precise latitude and longitude coordinates will identify which cell tower has transmitted the emergency call, but that information places the caller anywhere inside a wide area.

“These rules are different because of the technological challenges faced by interconnected VoIP providers in providing automatic location information,” VTel said.

The section of the law that VTel cites as exempting VoIP from the tougher standards also requires the cellphone operator to “prominently” warn users that “E911 service may not be available.”

In its response to the Public Service Board, the Department of Public Service, which serves as an advocate for the public in matters before the board, essentially accused VTel of attempting to invoke a technical loophole in the law to avoid its public service obligation.

Despite the disagreement over how VTel should comply with regulations, the Public Service Board nonetheless designated VTel an ETC in 2013 with the provision that “prior to the time it begins to provide voice telephony service … (VTel) file with the Board an explanation of what it believes to be the applicable governing regulations for its provision of E911 services over the new network and its reasons … along with a reaffirmation of its commitment to meet those obligations.”

And in the event that VTel’s position continues to diverge from that of the Department of Public Service “over the nature of the company’s E911 obligations … (the department) may request that the Board open an investigation at that time,” the department wrote in its filing with the board.

The silence from VTel about its current plans to provide cellphone service to unserved areas might reflect the commercial reality of the marketplace, where the company’s wireless broadband network has been slow to take root with customers. Or the company may have fallen short of reaching roaming agreements with other carriers to make a mobile service viable. VTel to date has said it has only one roaming agreement “with a major national carrier” in hand, although it did not identify the carrier, according to the company’s website.

But if and when VTel does offer mobile phone service, state officials say , they expect VTel to comply with the same enhanced 911 standards that are followed by all other mobile phone carriers.

“Our understanding is that VTel is currently offering data-only service,” said Barb Neal, executive director of the Vermont Enhanced 911 Board, which oversees the state’s 911 emergency phone system.

“When (or) if they move to offering voice service we expect them to comply with all the existing FCC requirements for location accuracy for the type of technology in use.”

John Lippman can be reached at 603-727-3219 or

Author: John Lippman Valley News Business Writer

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