Broadband Infrastructure Bond Legislation
OTELCO Testimony to Maine Committee on Appropriations and Financial Affairs

The Committee on Appropriations and Financial Affairs in Maine is reviewing 2 Broadband Infrastructure Bond proposals.  Following is OTELCO’s testimony to the Committee regarding those pieces of legislation:

OTELCO is IN SUPPORT of LD 295 General Fund Bond Issue To Increase Rural Maine’s Access to Broadband Internet Service and LD 354 To Authorize a General Fund Bond Issue To Encourage the Provision of Reliable High-speed Internet in Rural Underserved Areas of Maine sponsored by Representative Berry and Senator Herbig, respectively.

OTELCO is the tradename for Mid Maine Telecom, Pine Tree Telephone and Saco River Telephone – three rural ILECs that have operated in Maine for close to a century.  Our companies were founded by local farmers and businessmen desperate for communication connectivity when large telephone companies could not make a business case to deliver phone service to low density rural communities.  Today, the same challenge exists but the service is broadband rather than telephone.

We see many communities considering building their own networks, much like the farmers of the late 19th century. Today’s advanced technology, unlike simple telephony, does not lend itself to a Do-It-Yourself philosophy.  Building and running a broadband network requires the resources to not only pay for the physical infrastructure but to also pay for the personnel to install and maintain that infrastructure, the customer care and billing systems and the personnel to manage and coordinate all these activities.   Without substantial financial support (beyond Federal subsidies like ACAM and CAF II), it will be decades or longer before the most rural and economically challenged areas will have the benefit of fast, reliable broadband connectivity.

Funding from the ConnectME Authority has been critical to several communities served by OTELCO.  From the most rural areas of Gray and New Gloucester to unserved portions of Enfield, Burlington, Lowell, Plymouth and Alton, ConnectME grants in excess of $289,600 have augmented OTELCO investment of $365,600 to deliver Fiber to the Premise to 422 locations.

This is why companies like OTELCO, who have been serving rural communities for more than a century, have focused efforts to combine resources to assist communities in bringing broadband to their towns.

After a 2017 ConnectME grant helped OTELCO to build FTTP to 69 locations in Alton, there was quite a buzz around town between the FTTP ‘haves’ and ‘have-nots’.  In early fall of 2018, the Alton Town Administrator contacted OTELCO to see what it would take to build FTTP town-wide.  We provided a budget to construct the project that would serve 260 unserved locations (over 21+/- road miles) and explained that we had no immediate plans, nor the resources, to build the entire town but could, and would, entertain a public / private initiative.

In addition to the obvious benefit of providing fast, reliable connectivity to residents and businesses, this initiative directly supports the Town of Alton’s proactive economic development plans.  Alton’s proximity to Route 95 and Bangor position the Town well for new business development as long as there is adequate connectivity for businesses to operate and compete in today’s digital economy.

As of this writing, there is an agreement between OTELCO, and Alton being fine-tuned that would have both Alton and OTELCO contribute equal and significant portions of the funding for the project.  These funds would be combined with grant funding from the ConnectME Authority.  Despite the commitments of both Alton and Otelco to a combined match of funds in excess of 100% of the ConnectME grant request, the limited availability of funds from ConnectME may hinder the Authority’s ability to award the amount necessary to see the project move forward.

OTELCO expects that similar projects will emerge in rural communities all over Maine and the US.  Currently, OTELCO is exploring another similar project in an Alabama service area.   LD  295 and LD 354. Would provide the ConnectME Authority the financial resources necessary to assist providers and communities as they work to bring critical broadband infrastructure to unserved areas of rural Maine.

At OTELCO we’re doing everything we can to support community efforts to deliver broadband. We hope we can count on you to advance legislation for a general bond issue that will adequately provide the additional resources necessary for all of us, providers and communities, to work together to see broadband available to everyone in Maine regardless of geography.

Thank you for your service and your consideration of OTELCO’s testimony in support of LD  295 and LD 354.