FairPoint eyes stimulus cash to expand service

By Kevin Miller, BDN Staff
Posted Aug. 21, 2009, at 7:30 p.m.

AUGUSTA, Maine — FairPoint Communications is seeking more than $37 million in federal stimulus money to expand high-speed Internet services into parts of rural Maine, New Hampshire and Vermont.

FairPoint says the money would help the company provide high-speed Web access to more than 19,000 households and businesses in Aroostook and Washington counties. Congress earmarked $7.4 billion within the federal stimulus package for expansion of broadband Internet services, which are regarded as key to attracting new businesses and retaining existing ones in rural areas.

FairPoint will have to compete for the funding with other service providers nationwide, including with a public-private partnership involving the University of Maine System.

If approved, roughly $10 million would be used to expand the high-speed Internet infrastructure in Houlton, Caribou, Limestone, New Sweden, Mapleton, Danforth and Grand Isle. Another $6 million in stimulus funding would be used to expand broadband service in Columbia, Eastport, Milbridge and Winter Harbor.

Applicants should find out by November whether they were selected for funding. Grant winners then will have three years to complete the work.

FairPoint spokeswoman Jill Wurm said the company has always planned to expand its DSL and Internet offerings in Aroostook and Washington counties.

“This funding will allow us to accomplish it much sooner,” Wurm said.

North Carolina-based FairPoint agreed to boost the availability of broadband services in Maine, New Hampshire and Vermont as part of the company’s acquisition of Verizon’s telephone and Internet businesses last year.

In Maine, the company agreed to spend more than $50 million in order to make high-speed Internet services available to 90 percent of its customers by 2013.

FairPoint’s problems with the changeover of telephone services from Verizon have received widespread attention from regulators in the three states and the media in recent months. But FairPoint officials have made clear since before the acquisition that they believe the true business potential lies in expanding high-speed Internet offerings to the region.

“Voice communication is taking a back seat to data communication,” Wurm said.

Among FairPoint’s competitors for the federal stimulus money is a public-private partnership which includes the University of Maine System. That competition already has caused some tension.

Earlier this month, FairPoint officials charged that UMS is competing unfairly for federal stimulus money. FairPoint believes it will lose some of its best customers, such as hospitals and large institutions, to the public-private partnership.

But the federal money is open to applications from both the public and private sectors. The state’s Broadband Strategy Council will review the proposals and could recommend one for funding.

Wayne Jortner, senior counsel at the Maine Public Advocate’s Office, said his office has submitted recommended modifications to improve both applications. While the public advocate disagrees with FairPoint’s contention that the partnership in which the university is involved is unfair competition, Jortner said his office wants to make sure the public-private application also expands broadband Internet to customers and small businesses.

Jortner said his office also would prefer to see any broadband grants awarded to FairPoint be held by a public entity until the company is ready to use the money. That would help protect the money should FairPoint be forced to file for bankruptcy protection because of the company’s financial struggles, he said.

FairPoint officials are working to renegotiate with its creditors in order to avoid a bankruptcy filing.

“We would love to see more resources going to FairPoint,” Jortner said. “We just hope it is used in the most efficient way and that some of these protections are put in place.”

kmiller@bangordailynews.net

623-0024

http://bangordailynews.com/2009/08/21/business/fairpoint-eyes-stimulus-cash-to-expand-service/ printed on October 24, 2014