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The Public Service Department will give more than a half-million dollars to three companies to upgrade internet speeds in rural areas of Vermont.

The department this week announced the $547,500 in grants to Comcast, Consolidated Communications (formerly FairPoint) and ECFiber to upgrade speeds at 307 homes and businesses.

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The grants are part of the Connectivity Initiative, a program the Legislature started in 2015 to reduce the number of Vermonters without high-speed internet. The program is funded through a surcharge on Vermont’s universal service fee on phone bills.

The money must be used to upgrade homes and businesses that have access to something slower than 4 megabits per second downloading and 1 Mbps uploading (written as 4/1 Mbps) to speeds of at least 10/1 Mbps.

The official definition of broadband at the Federal Communications Commission is 25/3 Mbps.

Clay Purvis, the director of telecommunications and connectivity for the Public Service Department, said most of the 307 homes and businesses that will be served by this round of grants will have access to speeds far greater than 10/1 Mbps.

Comcast will receive $300,000 to upgrade speeds at 114 addresses in Cavendish. The company offers speeds up to 1 gigabit per second both uploading and downloading, the equivalent of 1,000/1,000 Mbps.

ECFiber will receive $72,500 to run fiber-optic cable to 31 homes and businesses in Randolph, Royalton and Stockbridge. ECFiber currently offers speeds up to 400/400 Mbps.

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Consolidated Communications will receive $175,000 to upgrade speeds at 162 addresses in Reading, Woodstock and Whitingham. The company has fiber-optic cable in the middle part of its network and then connects digital subscriber lines, or DSL, to people’s homes. Those lines offer slower speeds than fiber-optic cable, but will be at least 10/1 Mbps.

Purvis said the department received bids this year that were more competitive than bids in previous years and that the amount the department is paying companies for connections at each address is lower than in previous years.

“I think we’re getting better bids,” Purvis said. “These three providers submitted several different projects, so we primarily looked at projects on the cost-per-address basis.”

As part of this year’s grants, the department is planning to pay Comcast $2,632 per address, ECFiber $2,339 per address, and Consolidated $1,080 per address.

In 2015, the first year of the grant program, the state granted an average of $5,026 per address to the same three companies.

Whitingham is getting service in part because the town worked with Consolidated to get the company to upgrade speed, Purvis said. He said the company has “been working with a lot of towns in southern Vermont, and they put forward a pretty competitive proposal.”

Cavendish had been struggling for a long time to find an internet service provider for residents. Purvis said the town was able to identify three specific areas that needed service, and Comcast is upgrading speeds at 114 of the addresses in those areas.

“Cavendish went through every option,” Purvis said. “They talked to every provider that they could, and Comcast was the only provider that ended up submitting a proposal.”

Purvis said the state is making a dent in the number of Vermont households that don’t have access to high-speed internet, but there are still nearly 30,000 households that are considered underserved. He said it would be a long time before the state brings high-speed internet to everyone.

“These are incremental improvements,” Purvis said. “At current funding levels, I don’t foresee this program completely solving the problem in the near future. However, it does provide benefits to Vermonters.”

“Where towns can partner with broadband providers and identify discrete and doable projects, it does provide an immediate benefit to those towns,” he said. “And we’re starting to see that, where towns are starting to reach out to providers and say, ‘Hey, we want to do a connectivity project.’”

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