A Pioneer Broadband worker helps install fiber optic internet service. Credit: Courtesy of Pioneer Broadband

Down East Maine has long been an example of large companies’ reluctance to get high-speed internet to rural regions. A few towns are changing their fates.

Underserved Calais and Baileyville formed their own community-owned broadband utility. By the end of January, every household in the two communities will have the option of receiving internet that is more than four times as fast as the federal definition of broadband internet, Downeast Broadband Utility President Dan Sullivan said.

Nearby towns have taken notice. So has internet and cable giant Spectrum, which earlier this year agreed to connect nearly all homes in neighboring Robbinston to its broadband fiber network, despite never offering cable service — let alone high-speed internet — there before.

More than $400 million in federal funds are expected to expand broadband internet in Maine in the coming years, and that money is expected to empower communities to pursue broadband projects and incentivize private providers to expand their networks.

It will be up to municipalities across Maine to decide whether they want to own part or all of their broadband networks or pay providers like Spectrum to bring broadband to town. With ownership comes control. The possibility of such projects may already be influencing big providers to expand service to places they deemed unfeasible before. But community ownership comes with risk for local governments that face the prospect of being on the hook if projects fail.

Main Street in downtown Calais is pictured on Feb. 5, 2020. Credit: Linda Coan O'Kresik / BDN

The Downeast Broadband Utility was funded by $3 million in commercial loans taken out by Calais and Baileyville. Nearby Alexander and Indian Township have joined. The network is “open access,” meaning multiple companies can compete for customers, although there is only one provider offering service on the network.

South of Calais, 500-resident Robbinston went another route. Spectrum will install fiber to 95 percent of homes there and offer service for $49.99 per month, less than the $59.99 over the Downeast Broadband Utility’s network, Selectman Tom Moholland said. The town pays nothing up front and takes on no risk, but it also has no long-term control of the system.

Advocates for community-based municipal networks argue that companies like Spectrum have failed to deliver on promises to expand broadband access in the past and have left communities in limbo. They see the involvement of telecom industry allies and free-market groups in creating laws that have effectively blocked municipal broadband projects in at least 17 states as an indicator that the coming federal funding will fuel a fight over rural Maine’s broadband destiny.

“We are truly competing against these telecoms,” said Debra Hall, a former Rockport select board member who chairs the Midcoast Internet Coalition, a group of two dozen towns working to bring broadband to their area.

To secure broadband funds from the American Rescue Plan Act and the Infrastructure Investment and Jobs Act, communities across the state will have to submit projects to the newly formed Maine Connectivity Authority. The authority has not yet set a timeline for when it will begin disbursing funds, but it is hoping some of the money will be allocated in the spring, said Andrew Butcher, Gov. Janet Mills’ nominee to lead the agency.

Those funds are not expected to be enough to connect the entire state to broadband, so communities will compete and they will have to choose whether to own their own networks — which usually requires a contract with a local provider — or go with incumbent companies.

Hall and other advocates of community-owned networks believe the coming influx should go to help rural communities build and own their fiber, which they argue is a “future proof” technology. Big providers argue that community-based expansions are risky and municipalities don’t have the resources to fund upgrades and maintenance over the long run.

“Municipalities have to provide critical services like police, fire, education, and others, and shouldn’t expose taxpayers to risky investments that often fail to generate the revenue or market share necessary to support these complex networks,” said Lara Pritchard, a regional spokesperson for Spectrum parent Charter Communications.

In Maine, few community-owned networks have gotten off the ground. But a 2017 Harvard study found community-owned networks typically charged lower prices than private ones while noting that it was “extraordinarily difficult” to compare broadband pricing. One industry-affiliated nonprofit said this year that local providers are poorly positioned to regularly upgrade systems, but it conceded that the model makes sense in places that have been ignored by the market.

That is what led community leaders in Calais and Baileyville to launch the Downeast Broadband Utility after years of discussion in 2017. Commercial loans funding the network are backed by both towns. A portion of each bill will go to Pioneer Broadband, the Houlton-based provider that the utility contracted to build and operate the network. The rest will go toward paying back the loans. Once paid, the revenue could be a funding source for the towns.

The town of Alexander voted to join the utility in 2020 and the total cost for fiber broadband to every home came to approximately $540,000, said Ted Carter, the town’s broadband liaison and a school board member. A $10,000 grant from the Maine Community Foundation and a $147,000 more from the ConnectME Authority helped lower the cost to just under $400,000.

“That’s a deal,” Carter said.

Robbinston officials saw it another way. The town began looking at broadband options in 2014, Selectman Moholland said. Talks with a large provider fell through, then he talked about joining the Downeast Broadband Utility, learning the town would have to pay for plans.

This Sept. 4, 2018, photo shows Charter Communications, Inc.’s Spectrum trucks in the parking lot at a Spectrum customer center in Orlando, Florida.  Credit: John Raoux / AP

Moholland then began talking to Spectrum, which said it would foot the cost of network design, and it applied for a grant from ConnectME to fund the broadband expansion. The grant went instead to another town that already had a provider, Moholland said. Spectrum agreed to fund the network expansion itself, but the experience left the selectman critical of the state’s priorities.

“We’re going to expand competition in one town, meanwhile the town that has nothing can stay with nothing?” Moholland asked. “It just seemed to me the ConnectME authority really seemed to have a bias toward community broadband.”

Spectrum did not answer a question asking if it was expanding services to areas it wouldn’t otherwise serve in response to the possibility of community-owned networks. But last month, a Hampden town official credited a defeated bond issue to create a municipal network for prompting service expansion in the town. This history has many advocates of community ownership anticipating a fight.

“We really have got to stay focused and make sure this federal money goes toward municipal type networks, which actually benefit the public that supplied the money in the first place,” said Sullivan of the community-owned utility.