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

For Maine, the stakes are enormous in this increasingly Internet-driven world.

About two-thirds of U.S. households have Internet service, and about half of them have some form of broadband connection.

For practical purposes, broadband is defined as anything faster than 200 kilobits per second.

“What is driving broadband is the general desire for consumers to access the Internet at faster speeds. Music downloads have been a tremendous help in driving broadband adoption,” said Vince Vittore, senior analyst at Boston-based Yankee Group who describes wireless and satellite broadband as lagging behind cable modem deployments and the aggressive rollout of phone line-based digital subscriber line services.

“[Wireless] technology works, but the history of wireless broadband has been one that is littered with financial failures. New technologies may rewrite that history, however,” said Vittore.

“It almost always comes down to economics. The relatively small percentage of consumers accessing the Internet via wireless means there is less demand for the equipment,” Vittore said. “Less demand translates into higher costs for the manufacturers of the equipment, [but] broadband wireless efforts from municipalities are causing a bit of a shift in this equation. The cost of equipment has gone down as municipalities have created demand.”

A bit of uncertainty surrounds Verizon’s future in northern New England. There is speculation that Verizon is eager to sell off its 5 million residential phone lines in Maine, New Hampshire and Vermont, exiting from the consumer business in one quick move.

According to Peter J. Reilly, Verizon state director of public affairs, Verizon continually evaluates its assets and properties for strategic fit and financial performance.

“We are frequently approached regarding possible deals. Sometimes, these discussions lead to transactions; other times, they do not. In this case, there is no agreement to make any changes in the New England region at this time,” said Reilly.

“It is Verizon’s commitment to let employees and other stakeholders know as soon as possible if that changes,” he said.

Reilly points to the fact that Verizon, along with the rest of the communications industry, has made significant investments to expand broadband availability throughout Maine, with high-speed Internet access available in 96 percent of Maine ZIP codes, according to the latest FCC report, “High-Speed Services for Internet Access: Status as of June 30, 2005.”

FCC reports show that industry efforts have increased broadband availability in Maine from 65 percent of ZIP codes as of June 30, 2001, to the current 96 percent.

“These same reports show the number of high-speed lines in service in Maine growing from 38,149 in June 2001 to 176,916 as of June 2005 – provided by 26 competing companies.”

Verizon is a big supporter of the governor’s ConnectME initiative, which promises greater opportunities for Maine consumers and businesses.

“We agree with its policy direction of creating the Advanced Technology Infrastructure Authority to facilitate broadband expansion and to manage public financial support in targeted areas where broadband infrastructure investment is slow in coming or where market economics are poor,” said Reilly. “It is important to note that this policy undertaking will be technology-neutral and competitively fair, so as to allow natural market dynamics to continue to the extent possible and leave it to consumers to ultimately decide what combinations of services to buy and from what providers.”

Phillip Lindley, utilities analyst at the Maine Public Utilities Commission, said the PUC has no authority to encourage broadband development.

“Companies are free to do as their investors dictate. Is more competition necessary to quicken the pace of broadband expansion? The economist in me would say of course. Wireless broadband is probably the most likely competitor or provider where there are none,” said Lindley.

Nationwide, Verizon has added nearly 1.2 million net wireline – not to be confused with wireless -broadband connections in the past six months and 1.8 million net broadband connections in the past year, a growth rate of 47.1 percent comparing the first quarter 2006 with the first quarter of 2005.

Verizon has invested tens of millions of dollars on infrastructure deployment in Maine.

Its deployment of DSL reaches 111 Verizon switching offices that serve more than 90 percent of Verizon access lines in Maine through 150,000 miles of fiber-optic facilities, among other things.

“In the process, Verizon has done a lot for small businesses, in particular, offering products and services that help our customers better compete in the marketplace and entering markets on a national scale, even globally,” said Reilly.

Verizon Business DSL recently lowered prices to $79.95 to $149.95 a month, down from $204.95 to $234.95 a month.

“If you take our 7.1 mbps package into consideration, the current speeds we offer are helping small- and medium-size businesses to achieve greater efficiency accessing the Internet and running their business,” said Reilly. “In addition, our DSL packages come with features that some cable modem companies do not offer such as domain name e-mail and remote dial-up access. We are continuously working on improving the packages and working on adding more value than just speed.”

Next: Verizon has its critics, who contend that Maine has lost its edge and is falling behind other states.