Maine Leaders Discuss Whether Public Broadband Investments Should Support National Private Providers

MCA continues to balance its mission to connect as many households as possible with high-speed internet as possible, with the desire of some communities to develop and fund their own infrastructure projects.

Over the past three months, I’ve asked hundreds of shoppers, walkers, community leaders, and business owners across rural Maine one question: “Do you know if your town has fiber-optic broadband?”

Women often answered with a question, “Are you looking for yarn?”

A man in a former mill town responded, “We used to have a place to buy glasses. Now we have to go to Augusta.”

Most didn’t know what fiber-optic broadband was.

Once I explained that it’s the backbone for providing high-capacity and high-speed internet service, they’d typically say, “Oh, yeah, I have Spectrum (Charter) or cable (Consolidated). My neighbor down the way doesn’t have anything. No one goes that far.”

But getting the internet via cable or copper wires isn’t the same as having fiber-optic connectivity. Fiber can deliver information at extremely high speeds, ensuring that users with such a connection have more than enough capacity to run any data-intensive applications they need to work from home, run a business, or take classes from home.

Maine is in the midst of an ambitious project to deliver fiber-optic connectivity across the state. The effort is investing public money in that buildout. In many cases, those public funds are going to partnerships that include private, for-profit internet service providers. Some see this as improperly rewarding commercial ISPs that may have been slow to serve rural areas.

While most everyday folks still have little knowledge about fiber-optic broadband, earlier this year, town leaders, community broadband coalitions, and Internet Service Providers across the state anxiously awaited Maine Connectivity Authority’s (MCA) Connect the Ready funding announcement. The single largest investment in Maine’s broadband infrastructure to date, Connect the Ready grants funded unserved or underserved areas that have internet speeds less than 25/3 Mbps (that’s 25 megabits per second upload and 3 megabits download). In this current round of funding, MCA leveraged $17 million in public/private partnerships awarding $34 million to 12 projects providing internet access to more than 16,000 homes and businesses.

Mark Ouellette’s company, Axiom Technologies, received two of the nine grants awarded to locally-owned internet service providers. Ouellette explained the leveraging component of the funding process.

“Our application needed to include a financial match. That match could come from a variety of sources including an internet service provider, the town, or rescue funds or county funds. The state would love to say money got matched two to one, but we live in a highly remote rural, expensive state. There’s only so many homes per mile. A suburb of Seattle has more people than the entire state of Maine. This makes it untenable for an ISP to provide the level of match some other states require from communities or ISPs.”

Typically, the more a town contributes, the more financial ownership it retains. Both of Axiom Technologies’ projects will be town-owned.

On the other hand, the less contributed by the town, the more likely it will be owned by the company applying for funding.

Consolidated Communications Holdings, Inc., a national telecommunications company that serves 23 states and has its headquarters in Illinois, received two grants totaling more than half the overall funding.

Some critics questioned whether granting public funding to large corporations with headquarters more than 1,000 miles from Maine was a good use of limited investment dollars.

“I’ve said this many times and I’ll keep saying it: Public monies shouldn’t fund nationally owned, corporate companies,” said Danny Sullivan of Downeast Broadband Utility, a municipally owned fiber-optic internet network. “Funding them is not in the best interest of communities who have been beholden to these companies for decades.”

Andrew Butcher, the president of the Maine Connectivity Authority, said that he understands those concerns but that the funding should be evaluated on its impact on broadband service.

“Our (MCA’s) goal is to get unserved households connected,” Butcher said. “In this last funding round, Consolidated was awarded two large projects. They not only had the infrastructure and capacity to provide service to close to 10,000 unserved/underserved locations, but the communities proactively selected and worked with them to move forward on these projects. Additionally, they put forward competitive proposals contributing over $10 million worth of funds. I get the consternation about Consolidated, but I think we need to keep our eyes focused on the end outcome.”

Butcher said ensuring that grant recipients provide the infrastructure and services they commit to is crucial. For example, he said if state funding went to another corporate ISP, Spectrum, which is the second-largest cable company in the U.S., the state would want the commitment it would expect from a small, local ISP.

“We’d want the ability to establish accountability, in the same way that we establish accountability with all of our other partners,” Butcher said. “We’d want to see that reflected level of community engagement, participation, and endorsement.”

Butcher said his biggest concern is the frequent ownership changes within communications companies.

“Bee Line Cable, a hyperlocal Maine company, sold to Spectrum/Charter just last month,” he said. “We can’t impose an ownership structure, but the ISPs do have to commit to maintain the specifications of their proposal for five years.”

Regional and national broadband experts, along with community coalitions and researchers, expressed concern about the potential precedent being set. Many spoke with the Daily Yonder on the condition of anonymity due to their professional positions, or their need to “fly under Spectrum/Charter’s radar” as they garner community support to build a town-owned internet network.

Regarding Consolidated’s award, one expert commented, “They are marketing savvy and have very deep pockets. By partnering with local communities where they already have a stronghold, they receive public funding and also prevent competition from other ISPs who could overbuild (add parallel fiber cable) on existing infrastructure. It’s telling that the industry chose the term ‘overbuild’. For poorer remote regions who lean conservative, this option provides a no-risk, tax-free solution. It’s highly technical and financially complex. Few understand the implications, even town leaders. What many don’t realize is that it’s their very tax dollars funding these corporate companies.”

Ouellette with Axiom Technologies said future rounds of funding via Connect the Ready are likely to raise even more complicated questions.

“This current round purposefully focused only on unserved locations,” Ouellette said. “The process didn’t address other aspects, including whether the infrastructure was community owned, whether Consolidated owned them, whether they had larger matches or smaller matches, where the matches came from, or who the provider was. All these elements were secondary to the state providing service to unserved locations. This is perfectly fine, but it creates very specific winners and losers. The question I ask is, what do you do in a town where part of it is served and part of it is not served? How do you weight towns with little capital but significant engagement? That’s the challenge the state is facing.”

Before grants were announced, Maine Connectivity Authority began meeting with communities who didn’t receive funding to help strengthen their proposals for the next round of awards later this spring.

While community leaders and ISP’s forge partnerships, I continue to talk to everyday folks in tiny towns across Maine. Last week, when I asked a real estate agent if his town was one of the towns funded this round, he said, “I wish we were. Our town desperately needs fiber! If you hear of anything coming our way, will you let me know?” He had no idea his town was one of the communities selected for this round of Connect the Ready grants.