Wireless network still operational
WHITINGHAM- CoverageCo’s cellular network remains operational, and the company’s interim CEO, Richard Biby, says he’s working to find a way to turn the beleaguered company around.
Last month, it was announced that CoverageCo, which was contracted to address cellular connectivity issues throughout the state through the installation of small cell sites to provide rural coverage, was in danger of closure. Last week, Gov. Phil Scott announced that a Cellular Site on Wheels, or COW, had been deployed to Grace Cottage Hospital in anticipation of a possible CoverageCo closure.
Biby says he is working to find a path forward to continue and maintain the work the company has been doing to provide cell coverage to the state. Biby has history with the company. “I was around at the founding of the company and was the original CEO,” said Biby. “I did all of the original engineering. I was involved from 2011 to 2015, and then the company was not doing fantastic and there was a need for someone to try to pull the pieces together, and that’s what I’m working to do.”
Biby says the company has hired contractors to evaluate some areas that have faced difficulties due to hardware issues, including Twin Valley Middle High School. Biby said that as of Thursday morning, he had not had an opportunity to get a progress report, but that “If there was ever a site that we would want online if we had to prioritize, it would be a high school.”
Clay Purvis, director of the Vermont Telecommunications and Connectivity Division, said that despite the turnaround Biby is working to achieve at CoverageCo, the state remains vigilant.
“We’re still very concerned about the ability of CoverageCo to continue,” said Purvis. “And so we are looking for a clear and credible business plan from CoverageCo that includes information on how the company plans to resolve the outstanding debt that it has with several creditors, and its plan for maintaining operations.”
Biby says those are concerns he shares. “We’re concerned too, otherwise I wouldn’t be in this position I’m in,” said Biby. “We have to work on those things. It’s going to take some cooperation of the company, the investors, and the state to find a viable business model that is sustainable in these very rural areas with the relatively high cost of operating and maintaining cell sites in geographically diverse locations.”
The state has a history with CoverageCo that dates back to 2012, when the Vermont Telecommunications Authority, or VTA, was given a mandate to bring cellular coverage to underserved state highways. After corridors that lacked service were identified, an RFP was issued seeking service providers who could address the lack of cell service in those corridors. CoverageCo was one of the companies that responded.
“CoverageCo brought forward a novel idea of serving rural highways with small cell wireless antenna radios,” said Purvis. “They’re low-powered radios that draw small amounts of electricity, and they can actually run on residential-grade broadband services like DSL. Which made them desirable to the VTA, because they could be deployed in areas where there really weren’t good fiber services available. And DSL is low-cost.”
The state’s contracts with CoverageCo are lease agreements, said Purvis, explaining that CoverageCo is a subsidiary of a company called Vanu Incorporated, which was the manufacturer of the small cell units that were to be used to provide cell service to the region. “The VTA had the authority under statute to own and lease telecommunications facilities and equipment,” said Purvis. “So they used that authority to purchase equipment and lease it back to CoverageCo. The state was making an investment in equipment with the idea that it still had the equipment if the business failed.”
Over the course of two years, three contracts were signed between the state and CoverageCo, which were intended to result in just over 400 sites that CoverageCo would be responsible for deploying and operating by 2015. “Today they have about 160 state-owned sites up as commissioned, meaning they’re deployed,” said Purvis.
At a public meeting hosted by Rep. Laura Sibilia and Rep. John Gannon in Whitingham in February 2017, then-CoverageCo CEO Vanu Bose warned that sites that had been installed in much of the southern Vermont region were proving to be unprofitable, and that the company would need to find a way to be profitable if it were to finish the project.
At that meeting, Bose said CoverageCo doesn’t service the end user, but instead creates agreements with cellular service carriers so that their customers may use CoverageCo’s hotspots when in their range. When, for example, a person with a Verizon cell phone makes a phone call that goes through CoverageCo’s cellular site, Verizon pays CoverageCo a few cents per minute of usage. Not enough users were using the hotspots, said Bose, and in turn, CoverageCo was not being paid.
Bose has since died of a sudden heart attack, which Sibilia said an interview last week “complicated matters” for the small company. In March, Purvis sent a letter to legislators warning that Coverage Co was in danger of closure. Biby was named interim CEO around the same time.
Purvis said that although to date the state has not terminated any of its agreements with CoverageCo, they are not closed to the possibility of working with a different company.
“We have been very accommodating to CoverageCo because they have an established network,” said Purvis. “But there are likely other network operators out there that could run this network just as well or better than CoverageCo. And it would be prudent to make sure that we consider those other options as well as whether we should maintain our relationship with CoverageCo.”