Broadband access focus of new board

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Editor’s Note: This is the fourth report in a multipart series about the availability of broadband Internet service in Maine.

Maine’s Legislature, in response to concerns about access to broadband service in rural areas, passed LD 2080, An Act To Accelerate Private Investment in Maine’s Wireless and Broadband Infrastructure.

LD 2080 creates the Advanced Technology Infrastructure Authority, or ATIA, which will try to accelerate the deployment of advanced communications technology infrastructure, defined as “any communications technology infrastructure or infrastructure improvement that expands the deployment of, or improves the quality of, broadband availability and cellular service coverage,” according to the authors of LD 2080. This will be accomplished by “partnerships, grants, direct investment, loans, demonstration projects and other appropriate means.”

The cell phone dimension is extremely important. In fact, in a recent interview, a top executive at one of the world’s largest manufacturers of cell phones said company employees have been ordered not to use the term “phone” any longer and must refer to these wireless devices as “multimedia computers.”

At the core of this initiative is what is known as Qualifying ConnectME zones or specific geographical regions statewide that are eligible for tax reimbursements once the ATIA determines that the region is unserved or underserved by an advanced communications technology infrastructure. Among other things, LD 2080 allows a reimbursement for taxes paid on the purchase of machinery and equipment to develop an advanced communications technology infrastructure in a Qualifying ConnectME zone.

The ATIA will have five voting members including the chairman of the Public Utilities Commission, the chief information officer of the state, someone to represent consumers, and two members with significant knowledge of communications technology. Aside from the PUC chairman and the information officer, the other three will be appointed by the governor.

Besides its own executive director and staff, the ATIA will be advised by the Advisory Council on Advanced Technology Investment, made up of pairs of experts in broadband access infrastructure, wireless telecommunications infrastructure, and educational telecommunications and technology infrastructure. In addition, this panel will include an expert on the statewide emergency radio network, and, representatives from the Maine Technology Institute, the Maine Telecommunications Education Access Fund Advisory Board, and the Small Enterprise Growth Fund, along with two additional members.

Other responsibilities assigned to the ATIA include:

. Collecting, aggregating, coordinating and disseminating information and data concerning communications services in the state.

. Continually assessing the availability of and need for advanced communications services in unserved and underserved areas within the state.

. Identifying and securing federal and other funding sources for broadband or wireless deployment or education.

. Identifying opportunities for coordination among providers, consumers and state and local governmental entities, including coordination with the statewide emergency radio network; and

. Creating and facilitating public awareness and educational programs to encourage the use of broadband services.

Federal programs haven’t been much of a help. Under the U.S. Department of Agriculture Rural Development Broadband Access Program, more than 50 loans to rural broadband projects amounting to more than $870 million have been approved since the program was created in 2002. Maine has not seen a penny from this funding source thus far because, according to a USDA administrator, nobody from Maine has applied for funding under the program.

“Overall, the objective of the [Maine] bill was to come up with a series of incentives to encourage the expansion of high speed internet access to areas of the state that are not currently being served with options or affordable options. The bill has tax incentives and a new authority whose primary goal is to better evaluate the underserved areas and try to creatively figure out how to expand access to these areas with an eventual funding mechanism for leverage funds,” says Hannah Pingree, the legislator from North Haven who introduced the bill. “There is so little coordination currently, some believe that just helping providers understand those areas that are not served with citizens who want to be served, might spur development with no incentives.

“USDA and other federal granting options, possibly including Community Development Block Grants, were discussed, and it was believed that this funding would fit well into [ATIA’s] role. Other states have been more successful in getting USDA grants with a coordinated effort,” she adds. “North Carolina. for example, set a goal several years ago to cover more of their state and rural areas, and, they have had some real success. They started an authority to do it, and they did many of the same things Maine is considering.”

Pingree insists that many broadband service providers are eager to serve small rural communities, even towns with 25 to 40 people who want access and would be willing to pay for it.

“Connecting those communities with providers is key. In other communities, some leverage funding might make service more economically feasible for a small provider and that is the point of leverage funds,” Pingree says.

“In the small communities I serve who have partial or no access, I know the lack of access impedes many people’s ability to do business, telecommute, attract visitors, and go about their daily lives. In a small state where our rural areas are struggling to maintain population, the lack of access will serve only to drive people out more quickly.”

Because Pingree is chairwoman of the Health and Human Services Committee, she is fully aware that there are many competing needs for state funds. This is why LD 2080 endorses the creation of a 0.01 percent fee on telecommunication bills to fund future development.

“With creativity, I believe a small amount of leverage funds could go a long way to make a big dent on this issue in our small state. We are already years behind states like North Carolina on this front,” says Pingree, who constantly hears from frustrated small-business owners in communities such as Brooklin who are desperate to get access to broadband.

“While broadband continues to be relatively expensive in many rural areas – she pays $50 a month for wireless broadband service, and the take rates are low, I think more and more people are demanding broadband for surfing the net, downloading music, or for their children’s access,” she says. The take rate is the percentage of households that subscribe to a service in a specific zone.

In addition, Pingree sees the business development attributes of ATIA extending to mostly small Maine companies doing the bulk of the work today when it comes to breaking new ground and providing broadband services to unserved, remote and hard-to-reach areas of the state.

“The big guys including the cable companies and Verizon compete everywhere else,” she says.

Brian Booher, chairman of an Internet task force in Bar Harbor, has studied LD 2080, and finds that as with most things, the devil’s in the details.

“It is interesting in that it gives a new body a great deal of power to act. A lot of the effectiveness of this committee will depend on the will and vision of the members,” says Booher. “It could be a benevolent dictator as such. If it acts boldly, it will likely find itself fighting a lot of lawsuits. If it does not act boldly, it will be costly and ineffective.”

Booher’s home in a new development in Bar Harbor is too far from downtown for existing DSL service and Adelphia did not build out their cable network to this new development.

“I petition the new ATIA to help. Would they: subsidize a carrier to build out their network to this new development? If there were two carriers who could solve this but it would cost more to build out one carrier’s network than the others, who would the ATIA pick?” asks Booher. “What if one carrier provided a more costly 10 Mbs service while the other carrier provided less expensive but slower 1Mbs service?”

Booher is concerned about encouraging competition in the broadband arena and wonders if the ATIA wants at least two broadband providers in any region.

“If two providers sought funding to build out their networks so as to compete for business in the same area, would the ATIA provide incentives and otherwise aid both interests?” he asks.

The ATIA must anticipate a scenario where a rural Maine business might be competing globally, therefore requiring not just 1 mbs service, but 1 gigabit per second service in order to remain competitive, and it petitions the ATIA for help.

Booher asks these questions because he wants to see a better charter for the ATIA.

“Perhaps that will be one of its first tasks when it is formed. I personally suspect that it is inevitable for government to take over operation and support of the data highways, much like they do the physical highways. These are too important to be left in the hands of private business,” says Booher.

“But that has its own issues. Maybe the inevitable result of the ATIA is to obtain all of the telecommunications infrastructure in the state.”

Next: A couple of smaller Internet service providers relate their experiences in the Maine market.