On November 15, 2023

White River Junction’s ECFiber bonds gain S&P rating


 ECFiber, Vermont’s first communications union district, has obtained a BB rating for its 2023 Series A bonds from S&P Global, the nation’s preeminent credit rating agency.

 “This is a historic moment,” said Stan Williams, ECFiber’s municipal finance advisor and widely regarded as the architect of Vermont’s Communications Union District (CUD) model. “For the first time, a CUD will be issuing a rated bond, which means that many more investors will be competing to buy those bonds, lowering the interest rate. ECFiber has been managed for its entire existence to reach this goal. It’s hard to overstate the importance of this achievement.” 

“This moment was made possible by over 16 years of grass-roots persistence, driven by a conviction that working together, our region could overcome the failure of the marketplace to offer decent broadband to all our homes and businesses,” said F. X. Flinn, who chairs the governing board. “Along the way, ECFiber had to figure out how to do this with local people and local money, and wound up inventing a new type of municipality, the CUD, which has no taxing power, only the ability to issue tax-exempt revenue bonds backed entirely by customer payments and with no recourse to the underlying assets.” 

Earlier this summer ECFiber celebrated the completion of the original mission to build a 23-town network when it activated its White River Junction central hub. ECFiber still has a network to build. “ECFiber expanded in 2020, adding 8 towns to bring its total to 31,” explained Tom Cecere, who manages the day-to-day business operations. “Now that our work in Hartford is focused on customer installations, our construction crews have moved on and are presently building in the Fairlees and Bradford. We plan to complete the entire network by the end of 2025.” 

With the rating effective today, the District will issue a Series 2023A bond for $7.53 million. The proceeds will be used for ECFiber’s $30 million network completion plan, about 25% of which is in progress, and for which the Vermont Broadband Board has issued or approved about $16 million in ARPA-based grants. ECFiber intends to complete the network before the end of 2025, at which time it will have brought world-class broadband to more than 25% of the 80,000 unserved or underserved addresses in Vermont in 2012. This brings the District’s total bond issuance to $71.83 million.

 ECFiber’s network is capable of delivering 1,000 mbps download and upload, a symmetrical gigabit, the entry point for saying that an ISP provides world-class broadband. Moreover, unlike for-profit providers, ECFiber’s business mission is to build out every home and business on the grid in the member municipalities. Because ECFiber’s buildout process prioritized first bringing broadband to areas that were stuck with dial-up, the denser, cable-served areas were the last part of the network to be built – exactly the opposite approach of cable companies.

 Virtually all of the funding has come from borrowed money: initially over 450 local residents invested $7 million. 




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