PORTLAND, Maine — Camden-based Redzone Wireless launched its wireless Internet service in Greater Portland and Waterville on Wednesday, marking the start of service Gov. Paul LePage and state officials said could be a “game changer” for expanding broadband Internet in the state.
The service uses a specific range of the wireless spectrum the Federal Communications Commission set aside for educational institutions, which Redzone uses through a 30-year agreement with the University of Maine.
Jim McKenna, president of the Camden-based Redzone, said Wednesday the company planned to set up service at 15 towers this year, including in Lewiston and parts of Bangor. Four of those first 15 towers will serve the Greater Portland region, McKenna said.
Whether that initial effort allows the company to break even will determine how quickly the company may expand to rural areas of the state, McKenna said.
“If we do that and are successful, then we enter 2016 and we immediately start looking to rapidly expand to more rural areas of the state,” McKenna said, noting that timeline remains uncertain.
But the potential is large as the company seeks to build its network on top of existing cell tower and fiber-optic cable infrastructure.
McKenna said there are 600 cell towers in the state connected to fiber-optic cables. Setting up a new site involves connecting its radio heads to that fiber-optic cable and using 4G LTE, or long-term evolution, radio technology similar to what phone companies use to send data to smartphones to connect with a router in a customer’s home or business.
The wireless model is similar to what existing cable providers do in the state, extending a fiber connection from a local “node” out to specific households using coaxial cables. Redzone instead provides what’s called “last-mile” service over the air using the type of technology cell phone providers use for data service.
Jeff McCarthy, vice president for business development at Maine Fiber Co., said Redzone’s towers are “a great use” for the open fiber network it manages, called the Three Ring Binder, which was built throughout the state with the help of federal American Recovery and Reinvestment Act funds.
“It’s a cutting-edge technology, and it’s truly a game changer for Mainers,” LePage said.
The company touted the service as an economic development tool and a way to advance Maine’s historically poor standing against other states for Internet speeds more quickly than with wired technologies.
“Some would say that fiber is our best or only solution, I respectfully disagree,” Redzone President McKenna said. “I have built hundreds of miles of fiber in 20-year telecom career and I can attest to the fact that these builds are prohibitively expensive… it would cost about $3 billion to get fiber to all of Maine and we can’t hope to attract that level of investment in our rural state.”
McKenna said Redzone can get 4G LTE service up and running in about 90 days.
The company announced Wednesday it also launched service to Great Diamond Island off Portland in Casco Bay.
That project provides an example of another setup for its networks, using 4G LTE to provide service to customers and a separate microwave transmitter to connect users wirelessly to a fiber-optic cable on top of One City Center in Portland’s downtown.
The 4G LTE wireless technology is a little better than line-of-sight service, according to Tilson Technology CEO Josh Broder, whose company prepares tower sites and installs equipment for Redzone’s network.
Through its 30-year agreement, the company will pay the university system about $210,000 a year for the lease and also reserve about 5 percent of its capacity for university uses, which UMaine System Chancellor James Page said will support its “one university” initiative to increase collaboration and sharing of services across the system’s seven campuses.
Page said the agreement is a win-win for the university and Redzone as the university faced the possibility of losing its rights to the wireless spectrum in the range of 2495 megahertz and 2690 megahertz if it did not maintain the infrastructure.
“A potential liability has become an asset and the incremental revenue is welcome,” Page said.
Capacity that’s not used by either its customers or the university can be deployed as roaming service for wireless phone providers like AT&T or Verizon eventually, but McKenna said such service won’t be practical until the company sets up more towers.
Stand-alone Internet providers like Redzone have faced some challenges entering markets where cable companies offer bundled services including cable television channels. McKenna said he’s not worried about that marketing challenge.
“We’ve seen an overwhelming demand from people who’ve cut the cord from cable or satellite,” McKenna said. “They feel that you’re adding insult to injury to pay for programming and then to sit and watch ads every 10 to 12 minutes. It’s a new world and it’s the Internet that’s driving that.”
Redzone advertises a basic service with 5 megabit-per-second downloads for about $35 per month and its fastest service with uploads and downloads up to 25 megabits per second for about $65 per month. All of its plans carry a $75 installation fee.
The company has gotten help from various state agencies, securing a Pine Tree Development Zone designation in its move from Rockland to Camden and loan insurance from the Finance Authority of Maine for a $4 million loan from Camden National Bank.
That means FAME will pay back up to 90 percent of that loan with taxpayer dollars if Redzone defaults.
McKenna said the company’s network can also deliver speeds that meet a new state standard by which the ConnectME Authority will decide on which projects to subsidize.