The latest news about Maine lakes and ponds.

Internet Bonanza for Rural Maine?

February 24, 2009 - MACHIAS -- Washington County was a technological backwater with virtually no high-speed Internet service when Susan Corbett moved her medical billing business from Boston to Jonesport in 2004.

In desperation, she consulted with a former Verizon engineer and, with her future business partner, launched a small wireless broadband service to meet her business needs.

Five years later, Axiom Technologies employs 12 people in well-paying technology jobs in Machias and provides high-speed connections to some 30 county communities.

"Word got out and it just kind of exploded and we got onto the path we are on," Corbett said.

Corbett's story may become more common in Maine, now that President Obama has signed an economic stimulus bill that includes $7.2 billion to expand rural broadband access nationally.

Major private companies, including FairPoint and Time Warner, as well as the ConnectME Authority, a publicly funded state entity, say they may be applying for some of that money.

Rural broadband advocates contend that funds spent on high-speed Internet connections have the potential to transform the moribund economies of Maine's poorest counties.

But others, including some economists, argue that there is little research to support the contention that improving high-speed Internet access creates jobs.

And some major service providers worry that publicly subsidized service could compete with the private sector as broadband extension grows.

The stimulus bill would divide broadband funding between two federal agencies -- $4.7 billion for the National Telecommunication and Information Administration at the Department of Commerce, and $2.5 billion for the Rural Utilities Service program in the Department of Agriculture.

Phillip Lindley, executive director of ConnectME, said it's likely the agriculture program will loan or grant money mostly to private companies, while public groups like ConnectME will seek Commerce Department funding.

The Legislature created ConnectME in 2005 and established a 0.25 percent tax on retail telecommunications services to fund the expansion of rural broadband.

The tax generates a little more than $1 million in revenue a year. Since 2007, ConnectME has awarded about $2.2 million in grants for high-speed connections in rural Maine.

Lindley said ConnectME is eager to tap into the federal economic stimulus funding because it could significantly expand connection efforts. The federal fund will require a 20 percent state match, meaning that $1 million of ConnectME money would generate $5 million in total funding.

"So just that leverage of having stimulus funds is quite significant," Lindley said.

State grants have supported the extension of broadband service to about 22,000 homes or businesses in virtually every Maine county.

Most of the services are wireless, using radios located atop tall buildings, water towers or other elevated points. The broadband signal is transmitted to a small receiver mounted on the customer's rooftop and fed by wire to a router.

GRANTS HELP SPREAD SERVICES

Axiom Technologies, the Machias service provider, has received three ConnectME grants totaling $658,000 to serve accounts in about 30 Washington County communities.

The grants subsidized about 30 percent of the costs of setting up the service. Customers pay a $99 installation fee and a monthly charge of about $40 for a high-speed connection.

Corbett, the company's chief executive officer, said some of the connections have gone to homes, while others serve businesses. She said Axiom is working with several partners on a proposal for state funding that will help the blueberry, lobster and other natural resource industries.

Using laptop computers, advanced broadband systems and new software, blueberry growers, lobstermen and others will be able to manage their businesses, access markets and handle regulatory reporting from their fields, boats, wharves or living rooms, she said.

"We can be the most technologically advanced county in Maine," she said. "It's going to be done somewhere. Why not in the poorest county in the state?"

Lindley, at ConnectME, agrees that high-speed connections produce economic benefits. He noted that broadband allows for the rapid transmission of medical information and enables businesses to market their products far outside Maine.

He said he has heard anecdotal accounts that tourists and vacation homeowners have extended their stays at Maine properties after fast Internet connections were provided.

"That's economic development on its own," he said. "This being Vacationland and everything, I think that's pretty important."

CRITICS: IT DOESN'T CREATE JOBS

But some observers of the rural broadband movement are skeptical.

At an Agriculture Department workshop on rural broadband last fall, economists and other analysts questioned whether the value of high-speed connections could be quantified.

"We want to be very careful about selling broadband to increase overall job growth in the rural economy because there's very little evidence that increasing broadband access indeed does create jobs," said Robert Crandall of the Brookings Institution.

His comments were reported in the Daily Yonder, the Web site of the Center for Rural Strategies, a nonprofit advocacy group that promotes rural values and economic development.

Part of the problem in calculating the value of rural broadband lies in the scarcity of information about market penetration. Lindley, at ConnectME, said there are no reliable maps of who has a high-speed connection in Maine, in part because federal reporting requirements are primitive.

ConnectME will be seeking grant money to build an accurate inventory of Maine broadband customers through use of new GIS mapping technology, he said.

Not only will mapping help calculate the value and impact of faster connections, but it will also avoid overlaps with private Internet service providers, such as Time Warner Cable and FairPoint.

Under ConnectME rules, no more than 20 percent of the customers served by a grant-subsidized project can have access to high-speed connections from a private company. The rule is designed to prevent unfair competition.

Lindley said several ConnectME grants have been challenged by private companies, including Time Warner Cable, which has raised concerns about customer overlap. Next month, an administrative hearing will be held on a Time Warner challenge to a ConnectME-funded project serving several towns on Mount Desert Island.

Peter DeWitt, a Time Warner regional spokesman, said the state has an important role to play in providing rural access, and the company tries to work cooperatively with ConnectME.

"Where overlaps exist, we'll just want to work collaboratively to prevent conflicts," he said.

DeWitt said if federal stimulus funds were available to private companies, Time Warner might be interested in applying for money, but the company needs more information to make a decision.

At FairPoint, the state's leading telephone service provider, a spokesman said the company will aggressively seek stimulus funds to help pay for rural broadband service extensions.

Jeff Allen, the vice president of external relations for FairPoint, noted that the company already has a strong presence in rural Maine. He said FairPoint could deliver service quickly, create jobs and meet demands for accountability called for in the federal stimulus bill.

"So the way I look at it is, if there's somebody that should be the poster child for the stimulus plan, it should be FairPoint," he said.

Allen said the company is already working with a number of the smaller companies funded by ConnectME, providing technical assistance and, in some cases, wholesale bandwidth.

Lindley, at ConnectME, said cooperation will be the key to extending broadband service under the stimulus bill. He said the state is focusing on involving companies like Time Warner and other providers in the earliest stages of the next round of grant-making to avoid conflicts.

"We don't want public money where private money is doing the job," he said.

By DIETER BRADBURY, Political Correspondent, Portland Press Herald, February 22, 2009


Lakes:
Regions:


Print this story

Email this story

return to Lake News