FairPoint questions broadband expansion

By Eric Russell, BDN Staff
Posted Feb. 04, 2010, at 8:30 p.m.

BANGOR, Maine — Officials with FairPoint Communications are contending that a proposed broadband network expansion known as the Three Ring Binder project that recently received $25 million in federal stimulus funding duplicates much of the existing broadband network owned by FairPoint.

Michael Morrissey, vice president and assistant general counsel for FairPoint, suggested during an interview Thursday at the Bangor Daily News that the federal government strayed from its stated intent when it awarded money for the Three Ring Binder.

Morrissey said his understanding of the $7.2 billion in stimulus funding that has been steered to broadband projects nationwide was that the money would support underserved areas. But the areas to be covered under the Three Ring Binder already are being served by FairPoint, according to Morrissey and Jeff Nevins, FairPoint’s spokesman.

Nevins used this analogy: “Would you build another interstate right next to the existing one?”

The Three Ring Binder is a collaborative effort among public and private organizations led by the University of Maine System and GWI, a Biddeford-based Internet service provider. The project will build 1,100 miles of fiber-optic Internet cable across western, northern and Down East Maine.

A representative for GWI said Thursday that FairPoint’s claims are old news.

“First of all, they have a good point, but the government already looked at this issue,” GWI CEO Fletcher Kittredge said. “FairPoint lobbied hard and raised this issue and the feds looked at it because they didn’t want controversy. But they decided it wasn’t an issue.”

An attorney with the Maine Public Advocate’s Office also called FairPoint’s claims “completely wrong.”

Wayne Jortner said that the Three Ring Binder will create a foundation that all Internet providers will be able to use to “serve the underserved areas. FairPoint clearly isn’t doing a good job of that, even if some of that is out of their control,” Jortner said. “But we don’t trust FairPoint to do the job, at least not the entire job.”

The National Telecommunications and Information Administration awarded $25.4 million to the Three Ring Binder project last December. The federal grant will be matched initially by more than $7 million in private sector investments by GWI and others. So far, 10 Maine companies have indicated that they plan to lease fiber-optic network space.

Jortner said the public-private partnership is exactly the type of project the American Recovery and Reinvestment Act aimed to support.

“The private market has failed to do the job and that is true of FairPoint,” he said. “Their argument that the public funds shouldn’t compete with private interest is at odds with the whole point of the stimulus plan.”

Despite the likely overlap of broadband cables, Kittredge said the Three Ring Binder lines would be different. First, he said they would have a higher fiber count than FairPoint, and therefore would allow more capacity. Second, he said, it’s open access and designed specifically to support strategic institutions such as schools and libraries.

“The feds loved our proposal,” he said. “It rang all their bells.”

But Nevins and Morrissey still wondered whether the government did enough research before approving funds for the Three Ring Binder. They also questioned whether the money should have been used to support so-called “middle-mile” infrastructure, which creates a backbone, versus “last-mile” projects, which bring the network to the final destination.

Adding to the drama is a piece of legislation, LD 1697, that would prohibit the state and divisions of the state from providing telecommunications services to clients outside the government sector. The bill’s sponsor, Rep. Stacey Fitts, a Pittsfield Republican, and FairPoint representatives believe that the Three Ring Binder will enable its partners to offer services at a lower price because of the federal subsidy.

“We’re not afraid of competition,” Nevins said. “We feel we can compete, but we want a level playing field.”

Kittredge, however, said once it’s built, the Three Ring Binder will be privately owned and operated by Maine Fiber Co. That company then will offer access to its fiber-optic network on an equal basis to all Internet and telecommunication providers interested in serving rural Maine.

http://bangordailynews.com/2010/02/04/business/fairpoint-questions-broadband-expansion/ printed on August 22, 2014