January 24, 2019
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Can the Internet be the boon Maine towns need? Local governments look to fiber-optics to buoy economies

George Danby | BDN
George Danby | BDN

The rural regions of this country have been largely left out the Internet golden age. Connections to high-speed Internet provide access to resources for education, opportunities for employment and economic development, and independence for people with disabilities and older adults, if the connection is good enough.

According to the National Broadband Plan, the cyber infrastructure buildout necessary for a good connection has been slow to reach rural America, even though it’s near universal in urban towns and cities. This access gap, the report argues, will have social costs by increasing inequality and disenfranchisement for people unable to access the Internet’s resources.

What’s held back this development has been a reluctance to invest in cyber infrastructure from Internet service providers that don’t see an economic benefit in building-out into rural communities. Some Maine municipalities, however, have decided the time has passed for waiting and are laying the groundwork for fiber-optic networks.

‘It’s a last resort’

Earlier this month, Rockport unveiled its municipal fiber network that aimed to meet the needs of the Maine Media Workshops and College, a local anchor institution, which attracts a diverse student body from across the globe. Local officials hope the improved high-speed Internet will spur economic and population growth. For other municipalities contemplating uncertain futures, Rockport shows a road forward.

Rural municipalities have reasons to take initiative on cyber infrastructure projects as they are a route for local governments to take charge of their future, especially as private enterprises, state and federal governments have been unable to create the growth these communities need to thrive.

For example, since 2012, Orono and Old Town have banded together to form a municipal fiber corporation — OTO Fiber — to find a way to bring long-awaited fiber to their residents and businesses in the urban service area. Until recently, the project has been stalled from a lack of investment.

The financial reality is often grim for rural communities faced with expanding and improving access to high-speed Internet. For example, the Orono and Old Town fiber network will initially cost about $720,000 to build-out six miles of fiber cables, while one mile of fiber cables in Rockport costs about $75,000.

According a 2014 report by the U.S. Government Accountability Office, the low population density in rural regions makes it hard for Internet service providers to recoup costs from investing in building and maintaining cyber infrastructure. As a result, Internet service providers faced with slim prospects for profit opt not to build faster and more reliable networks.

Local governments see no option other than to venture on their own.

“It’s a last resort because we don’t think that existing telecommunication companies are in the position to establish ‘last mile’ fiber,” Orono Town Planner Richert said. “We think [OTO Fiber] will provide a stimulus.”

One reason Orono and Old Town decided to take this road is the boon it may provide the many startups, small- and home-businesses sprouting around the university. More than a dozen local businesses have sent in letters of support to Orono, many suggesting the fiber network would allow them to expand their business, engage with customers and compete nationally and internationally, enabling them to hire new full-time employees.

In its report, the Government Accountability Office found small businesses in areas targeted by federal and local high-speed Internet projects benefited from expanded and improved cyber infrastructure. A 2011 study by the McKinsey Global Institute also found small businesses with a high-speed Internet connection had a 10 percent improvement in productivity, and it stimulated job growth.

Down the coast from Rockport, the town of Islesboro is investigating how a municipal cyber infrastructure project will benefit the island community. Paige Clayson, a representative of the Islesboro economic development group, said it started with the question: “What’s keeping us from being a vibrant community and maintaining a year-round population?”

Population growth has been a motivating factor behind this project, Clayson said, adding a sustainable future depends on attracting new residents. According to the U.S. Census Bureau, Islesboro’s population fell 6 percent from 603 in 2000 to 566 in 2010, with a number of seasonal residents.

This isn’t a problem facing just Islesboro but Maine as a whole, which is one of the oldest states in the nation. According to the U.S. Census Bureau, Mainers age 65 and older make up more than 17 percent of the state’s population, with estimates that it will increase to 25 percent within 10 years.

“In an aging state, we need to attract young families,” Clayson said, adding families want to live where their children can do homework and access the tools needed for a successful education, such as the resources available with a high-speed Internet connection.

“The market is not going to solve this problem,” Clayson said. “We need the Internet and access to it, but the market [on Islesboro] is not big enough for providers to do it.”

Despite the uncertainty about how Islesboro will approach its cyber infrastructure project, “we’re optimistic something will come of it,” he said.

Not everyone welcomes municipal fiber, however, in particular, incumbent providers for whom such projects present competition, which, some argue, is unfair. Resolving industry skepticism is necessary for municipal fiber to survive.

Both FairPoint Communications and Time Warner Cable have voiced opposition to the Orono and Old Town fiber proposal in letters to the ConnectME Authority.

“We firmly believe that this [OTO Fiber proposal] does not match the intent of the ConnectME Authority [grant process],” said Jeff Nevins, FairPoint public relations manager for Maine and New Hampshire.

“We feel that the [ConnectME grant] money should go to unserved areas, which would seem that’s where the priority would be,” Nevins said, adding FairPoint has facilities in place and deploying fiber would undermine FairPoint’s investment in its infrastructure.

Some Internet service providers, however, are eager to jump on board, such as GWI that partnered with Rockport to engineer the mile-long fiber network that runs through the heart of downtown. Startup Internet service providers are likely beneficiaries of municipal fiber as it removes a financial speedbump.

Richert maintains the municipalities don’t want to be competition, instead “we want to be cooperative with them [incumbent providers],” he said.

Christopher Burns is a BDN intern and University of Maine student.

 



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