A small island town must decide this month whether it will continue to build its own broadband system or scrap it and lose hundreds of thousands of dollars it has already invested.
Voters in the town of Southport, County of Lincoln, accused elected officials in 2021 of seeking bail of up to nearly $2.5 million to build a city-owned fiber system. A year and $653,000 later, the project is in jeopardy after opponents collected enough signatures to force a town assembly vote on three project-related issues on June 22.
It shows the dangers of starting a community-owned network with up to $500 million in federal and state funds available in Maine’s expansion over the next few years. Well-established internet providers and their allies have fought proposals to expand municipal broadband or floating service extensions. The latter is proposed in Southport, where opponents have accused elected officials of spending a lot before they can be sure the project is viable.
City officials say residents need to be patient before they can see results. Their success will depend on their ability to convince residents that the sunk costs are worth it and simultaneously increase subscriptions so that the project can deliver on its financial promise.
A recent open letter from breeders to townspeople said the system needed to be operational for a year to generate revenue. It also outlines hundreds of thousands of dollars in grant the city can use to complete the project, including a $400,000 grant from a state broadband program.
This should be returned if the project is rejected at the town meeting this month. But costs paid up front with taxpayers’ money — such as attorneys, licenses and potential default fees from Axiom Technologies, the Machias-based contract vendor — cannot be.
“We urge all residents, voters and non-voters, who support this fiber optic system to also ‘VOTE’ by signing up for the service as soon as possible,” the letter, signed by selectors Gerald Gamage, Mary Koskela and Smith Climo, said.
That upfront money is part of what angered Doug Jones, who helped circulate petitions for the June vote. He said the city should have waited to secure bonds or ensure the project had enough subscribers to be financially feasible. Officials pegged the number at around 320; the service had less than half in April, the Boothbay Registry reported.
“I just don’t think the city can compete with these big companies,” he said.
But Gamage, the head coach, said City had done exactly what they were tasked with. Installing a network can require upfront costs, and the decision to purchase materials in advance was advised by a city attorney, he said. The costs would be reimbursed when the system went live. It takes customers, and he is convinced that they will come.
“I think it’s human nature to wait until the last minute or until you see progress,” he said.
Three mandate questions address broadband: Question 2 would revoke the authority given to selectors to create the project, Question 3 would be a $60,000 fund to connect the 10% of addresses that have no service Internet meets Maine broadband standards and question 4 would uphold last year’s vote.
Progress has been delayed as the city waits for both Central Maine Power Co. and internet service provider Consolidated Communications to allow Southport to hang the wires. Charter Communications, Spectrum’s parent company, is still waiting.
The company offered to pay to connect the remaining people at city expense, which is what the money from question 3 could be used for. Such a service would be more reliable for the city and keep its “limited government resources” focused on providing fast internet access to those who don’t have it and not compete with providers, spokeswoman Lara Pritchard said. of the Charter.
It was this competition that spurred Spectrum and other companies to announce many recent service extensions. Their bid to do so was credited with defeating a network initiative owned by the town of Hampden. A vote in Leeds to create their own network was opposed by the conservative Maine Policy Institute, which received Charter funding, Maine Public reported.
Arguments over who should manage a community’s broadband infrastructure are common, said Debra Hall, president of the Midcoast Community Internet Coalition, a group of two dozen cities working to bring broadband to their region.
But as the internet becomes more critical for rural areas, she said residents need to start thinking of it more as a utility than a private service. Using federal money to pay for most of the construction is key to getting people on board, she said.
“[Broadband] is just as important as the roads, but there are a lot of competing interests at the ballot box,” she said. .. “You’ll never get there in most cities if you tax the residents.”