U.S. Sen. Angus King has sent a letter to federal regulators seeking clarity about how FairPoint Communications will be held accountable as it uses millions in federal subsidies to expand broadband Internet access in rural Maine.
The letter comes three months after the Federal Communications Commission announced it was awarding $13.3 million a year for six years to FairPoint to help offset the high cost of providing broadband access to areas of rural Maine. The money, which will total nearly $80 million over the life of the project, comes from the second round of Connect America Fund, or CAF, grants.
King and two other senators sent a letter last week to FCC Chairman Tom Wheeler, asking him to provide more details about the accountability and enforcement measures the agency has in place to make sure companies that receive federal broadband subsidies make good use of the funds.
“We believe strict enforcement measures, coupled with transparency around how, where and when the funds are used are necessary to ensure the integrity of the (Connect America Fund) program,” the senators wrote.
King sent the letter after his office was contacted by several rural Maine residents who want to know if their neighborhoods will receive broadband service or if their existing service will be upgraded as a result of the subsidies. He didn’t have an answer for them.
“High-speed broadband is a gateway to opportunity in the 21st century, but today, too many people in rural Maine lack adequate access – and that’s not fair to them or to our state’s economic future,” King said Monday. “The FCC’s Connect America Fund can help change this, but to be successful, every dollar must be spent efficiently, effectively and in a transparent way.”
Mike Reed, FairPoint’s president in Maine, said he was surprised by King’s letter. He called the expansion project using nearly $80 million in CAF funds a “monumental project” and pointed out that the company only received word that it will receive the funds a few months ago.
“Is there a list of where FairPoint is going to put every dollar of that money? No. Is there going to be tomorrow? Frankly, no. We’re just not there yet,” Reed said Tuesday. “But the towns are asking very good questions. The communication is there.”
ONLY CERTAIN RURAL AREAS ELIGIBLE
Reed said the company will be as transparent as possible about where it intends to make broadband investments, and is interested in collaborating with communities and the state on making the best use of the funds. The company has created a special team to interact with communities and help them understand what service they currently have and whether they’re eligible under the FCC rules to receive the subsidized service.
Reed said it’s premature to start criticizing the company for not being transparent.
“We didn’t make the rules. The FCC made the rules and the FCC said you have six years to build this and here are the eligible locations, here are your milestones – and we’re going to meet those,” Reed said. “But it’s impossible two months after we accept the funds to say, ‘Okay Town X, we think we’ll be in your town in 2016, so don’t do anything. We’re just not there yet; it’s not because of our refusal to do it.”
The company, which is conducting engineering studies now, has accountability standards it must meet, Reed said. When the company decided to accept the funds it also made a commitment to expand broadband Internet service to 35,500 underserved locations in census tracts that the FCC deemed eligible under the CAF program. That broadband service must offer download speeds of at least 10 megabits per second and upload speeds of 1 megabit per second, and do so at an affordable price.
The CAF funds do not require FairPoint to offer broadband service everywhere in rural Maine. In fact, the FCC doesn’t even require the company to provide broadband to every home and business in an eligible census tract. The requirement is only to bring or upgrade service to 35,500 locations. A map of the eligible census tracts in Maine, those colored dark green, is available on the FCC’s website. The FCC decided that areas in red would be too expensive to provide service.
The FCC requires FairPoint to have built out broadband service to 40 percent of eligible locations in Maine by the end of 2017, 60 percent by the end of 2018, 80 percent at the end of 2019, and 100 percent by the end of 2020.
SMALL-TOWN RESIDENTS SUFFER
Besides having to return its CAF funds, there are also financial penalties if FairPoint fails to hit its benchmarks, Reed said.
“I can summarize it by saying we’re not going to miss them,” he said.
Christy Whitmore, a resident of Starks, a small town of 600 residents near Farmington in western Maine, is one of the constituents who reached out to King’s office after she couldn’t get an answer from FairPoint about whether the company would offer broadband service in her town.
She runs a media consulting business with her husband out of their home. Their Internet service, provided through a microwave dish, is intermittent and unreliable. An Internet-speed test conducted on her computer Tuesday morning revealed her download speed was 0.52 megabytes per second, while her upload speed was 0.25 megabytes per second.
“It’s not reliable,” she said. “That’s why we have a key to town hall and can go in and use the Internet when we need to.”
PUBLIC ADVOCATE EXPECTS PROGRESS
Whitmore wants more clarity about whether FairPoint will even consider providing service to Starks. Because if not, she’d want the town to search for other Internet-service providers who would serve the town with the help of a ConnectME Authority grant. But no ISP will consider the town for investment if there’s a chance that FairPoint could show up with its federal subsidies and undercut the competition. It puts towns like Starks in a tough place, Whitmore said.
“We’re supposed to wait nearly a decade? It’s a long time to sit around and not be served or not be able to find a way to make ourselves more attractive to another ISP,” she said.
Reed said he understands the frustration of residents like Whitmore, but believes the challenge of expanding broadband to rural areas like Starks is a problem that all Internet providers in Maine confront.
Tim Schneider, Maine’s public advocate, also has fielded inquiries from rural Maine residents who wonder whether they’ll receive broadband service as a result of FairPoint’s federal funding. He hasn’t been able to offer them any details, but he has faith it will work out.
“This is something where everybody wants the same thing. Everyone wants to expand broadband access in the state of Maine, so if we can get everyone to sit down and find a solution that works for everybody, I think this is problem that can be solved,” he said.
Send questions/comments to the editors.
