Southport residents experiencing buyer’s remorse over bond for new government-owned network
In May 2021, residents of Southport, Maine voted 95-86 at a special town meeting to seek bonding not to exceed $2.48 million to build a municipal-owned fiber optic network. The stated goal of the project is to provide high-speed internet access to every business and family in the town of 622 residents, per the 2020 US Census.
ConnectME, a state agency which compiles data and issues grants on broadband access, considers an area to be “unserved” if residents are offered internet speeds of less than 50 mbps download and 10 mbps upload, referred to as 50/10 service. The agency defines “underserved” households as those which have access to speeds less than 100/100 service, but at least 50/10.
In reality, a small number of Southport residents—some say about 10%—do not currently have access to adequate internet service. ConnectME mapping data show only about five or six small streets which have between 10/1 and 25/3 service available instead of between 50/10 and 100/100 like the rest of the island. According to BroadbandNow, three internet service providers (ISPs) serve at least 99.8% of Southport households, offering plans with speeds up to at least 50 megabits per second (mbps), and some as fast as 1000 mbps (1 Gbps).
Similar kinds of government-owned networks (GONs) have been tools for bureaucrats across the US to spend massive amounts of public funds to build expensive, duplicative fiber-optic infrastructure, often at an unreasonably high cost for local taxpayers. A 2017 University of Pennsylvania Law School study of 20 GONs around the United States found that only two are on track to recover their total costs in 30 to 40 years, their expected lifespan.
Perhaps aware of this history, several Southport residents raised questions about what such a large commitment of funds would mean for their community. At its April 13 meeting, the selectboard received two citizen-initiated petitions on the GON.
One petition would rescind the board’s authority to seek funding for a GON and require the town to sell any materials it has already purchased; the town has spent $640,000 on it already. That petition garnered 144 signatures, more than the 95 residents who voted to approve the GON last year.
The second petition would create a fund to assist residents who are considered to be “underserved” or “unserved,” seeded by money from the town’s general fund. That earned 82 signatures, more than the 43 verified signatures required for submission to the selectboard.
Voters will weigh in on these two petitions at a public hearing on May 18, and ultimately decide whether to accept them or not at another special town meeting on June 28.
Reports from Axiom, the ISP chosen to build the prospective Southport GON, say that the “break-even point,” or the number of subscribers needed to be tax-neutral, is 320. Petition circulators Doug Jones and Tom Myette disagree, mentioning to the Boothbay Register that they believe the number of subscribers needed to achieve tax-neutral status is more than 500. At the April 20 meeting, Selectman Gerry Gamage reported that the town had gathered just 134 initial subscribers. In other words, the town is far from registering enough residents needed to save taxpayers from a certified boondoggle, similar to so many that have plagued local taxpayers around the nation.
“All we are asking is for you to prove you can get the subscribers before moving forward,” Myette added.
Despite all of the signs pointing to another project of dubious value, on April 27, ConnectME announced that it had awarded Southport $400,000 to support the GON. The agency had received the funds through a $15 million state bond approved by Maine voters in 2020. If residents approve the first petition though, they will have rescinded the authority to fund the GON. In that event, ConnectME’s grant money would also be rescinded.
Honestly, this whole scheme reeks. ConnectME, a state agency, hand-picks its preferred local competitor-ISP to write a rosy study about how spending millions in tax dollars will bring residents better and cheaper internet than the multiple companies who have been serving the same market for years. The ISPs already operating in the town are not invited to present to residents. The company is then showered with state and local funds to build the project itself, protected by town officials willfully ignorant to the immense waste with which they will saddle their neighbors.
This is neither the first nor the last attempt by ConnectME to shovel millions in public funds into municipal GONs, despite the dubious national track record of such enterprises. Small communities all across Maine are being targeted with campaigns to leverage federal ARPA funds to add a costly fiber optic network to their balance sheet. In some cases, there may be a considerable number of households who want the internet but don’t have it, or their current service may be inadequate. ConnectME is a hammer, so in both of these cases, they just see nails. Funding a parallel, publicly-owned broadband network is akin to treating every broadband-related problem as the same, whether it be access or affordability.
Couldn’t these problems be solved with more targeted funding? State and local taxpayers could spend a fraction of these costs in a similar way Southport petitioners structured their second petition, setting out a specific fund to help the households who are truly without access.
If the issue is affordability, the state or town issues internet vouchers to families to help them purchase plans with sufficient speeds for their needs, also at a fraction of what ConnectME wants to spend.
As more GON proposals ramp up across Maine, fueled by seemingly-unending streams of federal funds and bureaucrats’ self-interest, more local communities will face wasteful proposals like the Southport GON. As Hampden voters were last November, Maine taxpayers should be rightly cautious and skeptical of these sorts of lofty and expensive public broadband “infrastructure” ideas. It could save future residents a substantial fiscal headache.