Friday, January 29, 2010

Maine Fiber Company Provides Three-Ring Binder Update

An update on the Three-Ring Binder Project was the highlight of today’s meeting of the ConnectME Authority meeting at Public Utilities offices in Hallowell.  Dwight L. Allison III, one of the major investors in the Maine Fiber Company along with Robert C. S. Monks, reported on what has happened so far, subsequent to the $25 million NTIA grant in December:

  • The Maine Fiber Company is up and running, with Allison and Monks as its two current board members. A new web site was launched yesterday
  • Receipt of federal money is expected soon.  Meanwhile, funds pledged by private investors have already begun to come in. (NTIA incorrectly understood that GWI would be the recipient rather than Maine Fiber Company.)
  • It is expected to take 2 to 3 years to complete the entire 1100 mile network.  The first section will be between Brunswick and Bath.  It could be operational by June.
  • Maine Fiber Company is a carrier of carriers.  It will sell access to dark fiber only.  It will be up to last-mile carriers to “light up” that fiber.
  • The dark fiber will be open to any vendor on an open, equal and non-discriminatory basis.
  • No single carrier will be allowed to consume more than 20% of the capacity of the network at any point.
  • Currently, plans call for running 288 fibers along the entire network.
  • Josh Broder has been named Maine Fiber Company President and will have major operational responsibility.  Tilson Fiber Technologies has been retained to assist in technical operation of the network.
  • Neither GWI nor the University of Maine System are investors in Maine Fiber Company, notwithstanding that they were official backers of the grant proposal.  The University will not be on the Board.
  • It is expected that an advisory board will be created consisting of carrier customers and others.
  • Should Maine Fiber Company fail to make good on its pledges, NTIA has the authority to come in and take over the project.
  • Maine Fiber Company is not legally a public utility.  Thus it does not have “attachment rights” for the utility poles to which the fiber need to be installed.  A bill has been introduced in the Legislature to grant the Project the same attachment rights, including the normal rate structure for use of those poles, that would be available to a vendor that is recognized as a public utility. 
  • The Project is subject to a potentially significant taxation issue that also applies to many other grant recipients around the country.  IRS may want to view the grant as income and tax it.  The tax would be greater than the total amount of private investment being made in the project.  It would probably call the viability of the entire project into question.  The Maine congressional delegation and others are involved in attempting to avoid this interpretation of tax laws.
  • Maine Fiber Company has met already with a number of prospective last mile carriers and would-be vendors of construction services. 
  • Public support is needed for the bill granting the Project pole attachment rights.
  • Typically, the pole attachment process involves “make-ready” by the owner of the pole before actual cable installation.  Make-ready is usually most expensive and time-consuming part.  Existing wires may need to be moved or, in some cases, an entirely new pole may need to be installed. 
  • Questions arose about pricing to the carriers who will light the fiber and provide last-mile connections to customers.  Allison mentioned some ranges with caveats that a large number of factors could affect final pricing.  
  • Once developed, official pricing will be publicly posted on the web site. 
  • Before discounts for really large purchases or commitments for a long time period, pricing might be in the range of $8.00 to $12.00 per strand per mile per month.
  • The company will also have an annual minimum charge, perhaps in the range of $25,000 to $50,000.

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