OTELCO Receives Funding to Expand High-Speed Internet in Rural Alabama and Maine

A picture of OTELCO Marketing and PR manager, Tracy Scheckel, who wrote the blog "OTELCO Receive's Funding to Expand High-Speed Internet in Rural Alabama and Maine"

OTELCO Marketing and Public Relations Manager, Tracy Scheckel.

By Tracy Scheckel, Marketing and Public Relations Manager

If people aren’t talking about the pandemic from a medical perspective, they’re talking about how shelter in place and social distancing have changed our world today, and how some of those changes are likely to stay with us forever.

One significant realization has resonated everywhere:

Access to Reliable High-Speed Internet is Not a Luxury, It’s a Necessity. 

This, as you might guess, is music to the ears of Internet providers everywhere, but it also brings an element of frustration where economics are concerned. Building high-speed Internet in rural areas is very costly and with low population density in those areas, it’s difficult to make a business case to do so.

Here at OTELCO, to the degree that our resources permit, we are continually making network improvements and building new infrastructure. Admittedly, we’re not doing that as quickly as we’d like to.

We have found a couple of ways to help stretch our resources through state grants and community investment. Last week was filled with good news about two grants we applied for in Alabama and Maine.

Alabama Department of Economic and Community Affairs (ADECA)

Earlier this year, we submitted a grant to ADECA’s Broadband Accessibility Fund (ABAF) to build Fiber to the Premise to Morgan City, an unincorporated community located in Morgan and Marshall counties. The grant application asked for $619,500 to augment an OTELCO investment of $1,150,500 to connect approximately 1,650 locations. On May 26th we were awarded the grant. The ABAF will fund up to 35% of the cost of eligible projects to a maximum of $1.5 million. For a project to be eligible, Internet service must be below 25 Mbps download and 3 Mbps upload.

Alabama funds the ABAF from its general fund and in the past 2 years that total funding was $27.4 million.  For that same period, the state awarded $2,363,152.51 to projects with matching investment of $9,452,612.08 that brought service to nearly 3,300 hundred locations.  Award totals for any 2020 grant rounds have not been reported and therefore are not included in this total.  In addition to a round of awards in March, and the one in May, the state expects to issue a third round of awards in the coming months.

Steve Harris of the Broadband Committee, Barbara Veilleux, UT Director, and Tracy Scheckel of OTELCO at the County Commissioners meeting in 2019.

Steve Harris of the Broadband Committee, Barbara Veilleux, UT Director, and Tracy Scheckel of OTELCO at the County Commissioners meeting in 2019.

Maine ConnectME Authority

In Maine, we applied for $81,250 to the ConnectME Authority to augment $162,500 in OTELCO investment and $81,250 in Penobscot County TIF funds to build FTTP to the unorganized territory of Argyle. I’m happy to report that the Authority approved our application for Argyle, and that the TIF agreement is being worked out, but that’s only a small part of the story.

In this grant round, the ConnectME Authority received requests totaling more than $3,000,000, with approximately $400,000 in available funds to award, the vast majority of submitted projects went unfunded in this round. Ultimately, this week’s grant awarded by the ConnectME Authority will help deliver service to approximately 982 locations, more significant are the approximately 4,356 locations whose projects were turned away for lack of available funding.

A major factor in the limited funding in Maine is the fact that, unlike Alabama, where there is a general fund appropriation for its broadband fund, the ConnectME Authority is funded by surcharges on telephone bills which are continually diminishing as people move away from traditional landlines.

Mainers Have an Opportunity to Weigh in on Broadband Expansion in the State

As the Governor was about to issue a shelter in place order for the state in response to the COVID 19 pandemic, during an emergency session of the Maine State Legislature, a $15 million broadband bond, listed as Question 1 on the ballot, was advanced for the public to vote on in the upcoming July 14 election. If passed, the money would be administered by the ConnectME Authority for broadband expansion to unserved areas in Maine.