Municipal finance is not for the weary.

But for the wise – at least according to the number-crunchers enmeshed in that world – one particular sliver of municipal finance (issuing bonds) has long been a viable way for local communities to finance the construction of municipal broadband networks. And as one Communication Union District in Vermont has discovered, bonding is better – when it’s rated.

Shining a light on bond-backed municipal broadband projects is the recent announcement that ECFiber, Vermont's first Communications Union District (CUD), obtained a BB rating from Standard & Poor Global, the nation’s preeminent credit rating agency. The rating will allow ECFiber to pay lower borrowing costs to complete a network expansion project.

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“This is a historic moment,” Stan Williams, ECFiber’s municipal finance advisor said in a prepared statement. “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.”

East Central Vermont Telecommunications District governing board chairman F. X. Flinn added that the new bond rating "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."

CVFiber continues to make progress in deploying affordable fiber to long-neglected rural areas in Vermont, as the state’s effort to embrace CUDs (Communications Union Districts) as a cornerstone of bridging the digital divide also pays dividends.

In late 2022 CVFiber broke ground on an ambitious plan to build a 1,200-mile fiber-optic network to bring affordable gigabit broadband access to 6,000 rural Vermont addresses deemed underserved by commercial broadband providers.

According to an October announcement by the CUD, its first customers have been connected in the central Vermont town of Calais, with construction ongoing in nearby Middlesex, East Montpelier, and Worcester.

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“We are enthusiastic about our progress as we bring high-speed Internet to central Vermont communities,” CVFiber Executive Director Jennille Smith said. “The progress that we have made and the impact that we’ve been able to achieve to date could not have been accomplished without the unwavering commitment from our partners. We are optimistic as we expand to other service areas.”

CUDs have proven to be a useful way for municipalities to band together to cooperatively build broadband projects that may have been financially and logistically impossible to try alone. Vermont CUDs can legally fund needed broadband expansions through debt, grants, and donations—but not taxes, though they themselves are tax-exempt nonprofits.  

CVFiber’s fiber deployment is expected to cost $60 million, $27 million of which is being paid for by federal grants made possible by the American Rescue Plan Act (ARPA). The remaining cost is expected to be funded by network revenue, loans, and future grant opportunities.