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In what would be the largest broadband investment Vermont has made in years, the House on Wednesday passed a package of funding and policy measures designed to expand internet access in rural areas of the state.

The broadband bill, H.513, would establish a new loan program for small “startup” internet providers, allocate $700,000 to help municipalities plan broadband buildout, and raise $1.5 million annually to subsidize internet service providers to expand infrastructure in rural areas.

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Rep. Tim Briglin, D- Thetford, who chairs the House Energy and Technology Committee, said about 17,000 Vermonters lack basic internet access and 50,000 whose internet is “not even remotely up to 21st century standards.”

Briglin said delivering good internet access to every last address in the state would be prohibitively expensive, and come with a price tag of hundreds of millions of dollars.

“That’s money that the state doesn’t have,” Briglin said.

But there has been fresh momentum in both the Statehouse and the governor’s office this year to give municipalities, communities and small businesses the tools and financing to build out broadband themselves.

“This really a huge investment in building the capacity to get this job done,” said Rep. Laura Sibilia, I-Dover, vice chair of the Energy and Technology committee and an architect of the broadband legislation.

“We’ve basically said the federal government isn’t fixing it for you, the providers aren’t fixing it for you, so regular town folk governing your towns, you’re going to have to figure this out,” she said.

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The legislation includes $700,000 for up to 12 grants that towns and communication union districts can use to write plans for how to roll out broadband.

The bill also funds a new permanent staffer in the Department of Public Service who will advise municipalities and rural communities that are interested in building out broadband.

Much of the bill reflects a package of proposals that Gov. Phil Scott pitched to lawmakers earlier this year.

The legislation includes the governor’s proposed loan program for “start up” broadband providers that would be administered by and funded annually through the Vermont Economic Development Authority.

VEDA would loan out $10.8 million to small providers in rural areas, and give up to $1.8 million to each company.

Briglin said small broadband providers often struggle to raise startup capital.

“So a funding model that allows these entities not to have principal payments on $1.8 million in loans, but essentially provides the forbearance for those entities to kind of get up and running,” he said. “It’s very difficult to find that from a bank or from the capital markets.”

The bulk of the bill’s funding — $1.5 million — lands in the state’s connectivity fund, which is used to help telecom providers build out to areas where they are otherwise not financially incentivized to expand.

The money for “connectivity grants” would come from a 0.5 percent hike on the 2 percent universal service charge: a tax on consumer phone bills.

Connectivity initiative grants are not a new concept, but they haven’t been funded for several years.

Briglin said the grants could be as small as $20,000, and could be used as an incentive for telecom providers to reach two or three houses at the end of a dirt road.

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