Thanks to the support of CEI, and NeighborWorks, Maine Broadband Coalition is happy to present this video that beautifully demonstrates the impact high speed broadband can have on Maine’s rural communities. Please share widely!
Thanks to the support of CEI, and NeighborWorks, Maine Broadband Coalition is happy to present this video that beautifully demonstrates the impact high speed broadband can have on Maine’s rural communities. Please share widely!
Last week OTELCO’s marketing team made their way to Newry, ME, for the 73rd annual New England Management Institute. The institute is a four day conference for Maine town managers, put on by the Maine Town City and County and Managers Association. While there, Tracy Scheckel, OTELCO’s marketing manager, and Heather Johnson, the director of the ConnectME Authority, gave a presentation on broadband expansion in Maine. Their address covered everything municipality leaders need to know about bringing reliable Internet to their communities, including:
All the information shared was relevant and important to anyone with the desire to bring better broadband to their community. If you weren’t there to see the presentation, here’s a recap of the presentation because community broadband expansion is something we should all know more about.
Return on Investment
Return on Investment, or ROI, is a big part of any venture. The ROI for an Internet Service Provider (ISP) and a Municipality is going to look very different. For the ISP, it is going to be about a fiscal return. There is a basic example of an ROI for a Fiber Build that OTELCO uses quite often. It is based on the following assumptions:
From these estimates, we conclude that a one-mile build with thirteen homes would bring the total cost of the project to $20,000 with an added cost of $600 for each home that connects to the service. If every home purchases Fiber to the Premise from this build, the total cost per home would be $2,140. A 100% take rate (the number of homes that actually subscribe to the service) is unlikely so let’s say that seven homes actually subscribe, bringing the total cost per home to $2,460. When you divide the cost per home by the net revenue per home ($33), you can see that it will take roughly nine years for the ISP to see break even. That is what the ROI on a broadband build looks like for an ISP.
For a municipality, the ROI is about the growth and prosperity of the community. A municipality is looking at things like:
Too often, towns get looked over by ISPs because they are not seen as profitable. Those municipalities are left with slow, unreliable Internet, which hinders the whole community. That is why municipalities may take charge of their own broadband.
Building a Network
Municipalities have two options when it comes to building their own broadband network. They can:
Going it alone can be a real challenge for most municipalities. In addition to the hard costs in your budget, you’ll need to add the cost of an engineering firm for design, and a company to actually build the infrastructure. Once it is built, you will have to pay the price of maintaining and the network, including upkeep, customer services, marketing and more. Unless your municipality already runs its own utility company, building, operating, and administering a broadband network is a tall order.
Public-Private Partnerships are beneficial because ISPs already have the resources and expertise that go into building and running network. Municipalities can choose between a local provider or a non-local provider. A local-provider has the potential to save a municipality money because they may already own resources, such as utility poles or central office space, in your area. Non-local providers are still a fine option, they just won’t have the local resources, which can mean more spending for the community. Whichever you go with, a Public Private Partnership can help realize your community’s broadband vision..
The ConnectME Authority is a government agency whose mission is to “facilitate the universal availability of broadband to all Maine households and businesses and help them understand the valuable role it can play in enriching their lives and helping their communities thrive.” They do this by awarding grant money to towns and providers aiming to expand broadband in rural Maine. They are administered by the Maine Department of Economic and Community Development and funded through a .25% assessment on landlines.
ConnectME is an important resource for any municipality looking to develop a broadband network. Already this year they have:
ConnectME obviously does much more than just grant money to help with broadband builds. They also provide multiple resources for towns looking to take on these projects.
There are many successful broadband stories across the country. During their presentation, Heather and Tracy touched on four communities that either have or are in the process of strengthening their connections.
Broadband expansion is an important issue across the country. Whether you are a town manager in Alabama, or a farmer in Maine, broadband can make a difference in your life. If you want to learn more about Municipal Broadband, download OTELCO’s Broadband 101 primer. The more people that become involved in this discussion the faster we can connect the whole country to reliable broadband.
GrowSmart Maine was pleased to participate in the ribbon cutting for the municipally-owned broadband network and follow-up roundtable discussion hosted by the Island Institute in Islesford, Little Cranberry Island, on Tuesday July 10. These events highlighted the collaboration and local commitment and was coordinated with a visit to Maine by Anne Hazlett, Assistant to the Secretary of USDA for Rural Development. The Cranberry Isles broadband initiative was funded in large part by a Community Connect grant from USDA:RD as this agency recognizes e-connectivity as a critical strategy for economic development, innovation & technology, workforce development and quality of life. The Island Institute coordinates this initiative and supports island and coastal communities as they choose to take charge of their future through community-driven process.
A local broadband committee worked extensively to articulate the value of access to highspeed internet within the communities and with funders and other supporters. These include access to work opportunities, improved telehealth and educational opportunities, as well as access to resources and markets for island-based businesses. And on Tuesday islanders were joined by other partners in celebrating successful deployment of fiber on all three of the Cranberry Isles.
Following the ribbon-cutting there was a roundtable in which other regional approaches to addressing the broadband divide were presented. Franklin and Cumberland counties are deep in planning for regional solutions (yes, there are rural towns in Cumberland county!). Maine West updated the audience on their broadband planning process in which coordinated plans have been outlined for 25 towns. Action plans range from beginning steps to larger efforts and include both youth engagement and increasing uptake when broadband is available. Islesboro, another year-round Maine island community, has successfully deployed a town-funded municipal system offering universal service with a low-income subsidy resulting in a 90% uptake. With this variety of strategies, the best models allow the flexibility necessary for ease of transfer to other towns. Each has town and system design has unique assets and challenges, but any community focused on managing their future can incorporate high-speed reliable internet in their plans.
GrowSmart Maine serves on the steering committee for the Maine Broadband Coalition with CEI and Maine’s Small Business Advocate and in that role will continue to advocate for and support community-driven efforts. As with most significant issues in rural areas, regional solutions will be the most effective. We will be highlighting several Maine-based “localism” efforts focused on the rural economy at our October 11th Summit in Bangor. There is still time to submit a proposal if you are part of such an effort and want to share outcomes and lessons learned with peers from across the state.
Cities are the future and the countryside is doomed, as far as population growth, jobs, culture and lifestyle are concerned. Right?
Certainly, that is the mainstream view expressed by two analysts from Brookings in article titled “In 2017, Rural Places Won a Little more, But Will It Last?” Their conclusion? Not likely. “Many of the industries that added jobs in rural communities in 2017 – such as logging, mining, oil and gas, and construction – remain cyclical given economic and commodity trends…The types of physical and rote jobs prevalent in rural America remain disproportionately vulnerable to automation and globalization.”
What is interesting about their list is its complete dismissal of a digital economy in the countryside.
Yet as the digital age continues to unfold, conversations around the impacts it has and will have on the socioeconomic landscape intensify. On one hand, one camp argues that the digital age is as prone to clustering as the industrial age was. Digital will deepen and accelerate the competitive advantage that cities have always had in the economy. On the other hand, other pundits and researchers argue that the digital age will result in a “decentralization” and a more leveling playing field between urban and rural. Digital technologies are insensitive to location and distance and potentially offer workers a much greater range of opportunities than ever before.
The real question is whether such decline is inevitable or if the digital economy has characteristics that are already starting to write a different story. We have recently completed research that suggests it is.
While metro areas still capture the majority of new jobs and population gains, there is some anecdotal evidence pointing in a different direction. Consider a CBS article that notes how, due to high housing costs, horrible traffic, and terrible work-life balances, Bend Oregon is seeing an influx of teleworkers from Silicon Valley. The New York Times has reported on the sudden influx of escapees from the Valley that is transforming Reno, Nevada – for good or ill, it is not yet clear.
Likewise, a Fortune article argued that “millennials are about to leave cities in droves” and the Telegraph mentioned “there is a great exodus going on from cities” in addition to Time magazine reporting that the millennial population of certain U.S. cities has peaked.
Why millennials? Well, dubbed the first digital native generation, their migration patterns could indicate the beginning of a digital age-related decentralization.
In search of insight, we looked at population change among the three generations that make up the entire country’s workforce: Millennials, Generation X, and Baby Boomers.
First, we defined each generation. Table 1 shows the age ranges of each generation according to the Pew Research Center, both in 2010 and 2016, as well as the age categories used to measure each generation. While not an exact match, categories are consistent across years and geographies.
The DDI developed by the Purdue Center for Regional Development, ranges from zero to one hundred where a higher score indicates a higher digital divide and includes two components: broadband infrastructure/adoption and socioeconomic characteristics known to impact technology adoption.
Looking at overall trends, it does look like the digital age is not having a decentralization effect. To the contrary. According to EMSI data, the U.S. added 19.4 million jobs between 2010 and 2016. Of these, 94.6 percent took place in metropolitan counties compared to only 1.6 percent in rural counties.
As far as population, virtually the entire growth in population of 14.4 million between 2010 and 2016 took place in metropolitan counties according to the Census Bureau. Figure 1 shows the total population change overall and by generation and county type. As expected, baby boomers are shrinking across all county types while millennials and Generation x are growing only in metro counties.
But there is a different story. When looking at only rural counties (what the OMB classification system calls “noncore”) divided into five equal groups or quintiles based on their digital divide (1 = lowest divide while 5 = highest divide), the figure at the very top of this article shows that rural counties experienced an increase in millennials where the digital divide was lowest. (The millennial population grew by 2.3 percent in rural counties where the digital divide was the lowest.) Important to note is that this same pattern occurs in metropolitan and small city counties as well.
“Urban” and “rural” can be tricky terms when it comes to demographics. The Census Bureau reports that 80% of the population lives in urban areas. Seventy-five percent of those “urban” areas, however, are actually small towns with populations of under 20,000. They are often geographically large, with a population density that falls off rapidly once you leave the center of town.
On the other hand, some rural counties are adjacent to metro areas and may benefit disproportionately from their location or even be considered metropolitan due to their commuting patterns. Because of this, we turned to another typology developed by the U.S. Department of Agriculture Economic Research Service that groups counties into nine types ranging from large metro areas to medium size counties adjacent to metro areas to small counties not adjacent to metro areas.
Figure 3 (below) shows counties considered completely rural or with an urban population of less than 2,500, not adjacent to a metro area. Among these counties, about 420 in total, those with the lowest digital divide experienced a 13.5 percent increase in millennials between 2010 and 2016. In other words, in the nation’s “most rural” counties, the millennial population increased significantly when those counties had better broadband access.
To conclude, if you just look at overall numbers, our population seems to be behaving just like they did in the industrial age – moving to cities where job and people are concentrated. Rural areas that lag in broadband connectivity and digital literacy will continue to suffer from these old trends.
However, the digital age is young. Its full effects are still to be felt. Remember it took several decades for electricity or the automobile to revolutionize society. Besides, areas outside metro areas lag in broadband connectivity and digital literacy, limiting their potential to leverage the technology to affect their quality of life, potentially reversing migration trends.
Whether or not decentralization will take place remains to be seen. What is clear though, is that although there are clearly other factors at play, any community attempting to retain or attract millennials need to address their digital divide, both in terms of broadband access and adoption/use.
In other words, our data analysis suggest that if a rural area has widely available and adopted broadband, it can start to successfully attract or retain millennials.
Dr. Roberto Gallardo is assistant director of the Purdue Center for Regional Development and a senior fellow at the Center for Rural Strategies, which publishes the Daily Yonder. Robert Bell is co-founder of the Intelligent Community Forum. Dr. Norman Jacknis is a senior fellow at the Intelligent Community Forum and full-time faculty at Columbia University.
It is impossible to compete today without fast internet, but slow speeds are still the norm in many parts of Maine. Just 12 percent of Maine households and businesses are considered to have access to effective broadband, according to the ConnectME Authority.
The state’s rural nature presents a chicken-or-the-egg scenario when it comes to making improvements: Rural areas need broadband to be economically competitive, but often there aren’t enough people willing to pay for high-speed internet to make an investment in upgrades worthwhile for a private company.
Calais and Baileyville in Washington County saw a need and did something about it. Last year, they came together to form the nonprofit Downeast Broadband Utility, and this year, they intend to be the first municipalities to take advantage of new rules that give them a right to attach fiber-optic cables to utility poles.
That detail is key. Fiber-optic cables are designed to transmit data. They can send it faster than copper wire networks originally built to transmit telephone signals and cable television. But before new rules went into effect in January, pole owners didn’t have to respond to municipalities that wanted to create their own broadband networks.
Now they do, and Calais and Baileyville are first in line to take advantage of the opportunity. Attaching cables to utility poles will be the biggest cost of the approximately $2.5 million project, which aims to connect fiber to 97 percent of area homes and businesses. Construction is expected to begin this year.
In addition to helping the project get started, having set rules will help clarify costs and project timetables. It should also provide a clearer path for more towns and cities that want to fund their own broadband networks. Other places should pay attention to what’s happening Down East.
There are a few things to watch. Perhaps the most important will be whether the company, or companies, offering faster service over the lines will price it affordably, which will be a factor in determining whether local residents and businesses purchase it. A faster network won’t mean much if people don’t use it.
It will also be helpful to know if the project ultimately has an economic impact, perhaps on household income, employment or business growth. Knowing these details will better inform other communities examining whether to pursue a similar route.
Calais and Baileyville deserve kudos for pursuing a new approach to faster internet. It would have been easier to give in to demographic forces, but instead, there is energy behind trying something new. Other Maine communities can learn not just from their methods but their tenacity.
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It’s inspiring to see what one small community can do to change the trajectory of its future. The Cranberry Isles, a tiny year-round island community off the coast of Mount Desert Island, just finished the first phase of a fiber-to-the-home community broadband network.
Just a year ago, residents had internet that was sometimes too slow to send an email. Upload and download speeds on the Cranberries now exceed 100 mbps, meaning they are able to join the global economy with faster internet than most of the U.S.’s metropolitan areas. Both the U.S. Department of Agriculture and the ConnectME Authority were clearly impressed with the ambition of this project. The recently awarded $1.3 million in federal funding will help cover almost all of the construction costs.
Broadband is so important to the future of the community that residents even voted to issue a bond themselves if that was the only way to make sure the project was built. The mostly volunteer broadband committee worked tirelessly to hold community meetings, create informational fliers, and write hundreds of pages of grant applications. They partnered with Axiom Technologies to design and construct an economically viable network.
Through it all, the Island Institute has been proud to assist with the community process and support the community leaders doing the hard work. It is a true public-private partnership where everyone has skin in the game.
This sort of public-private partnership is one model for the other 36 communities working with the Island Institute to improve their broadband capabilities. Across all of these communities, local leaders are focusing on broadband because it can diversify career opportunities, help strengthen small businesses and give elders access to telehealth to help them stay in their communities longer. It also provides educational opportunities for students and adult learners.
As contradictory as it may sound, reliable high-speed internet can help communities maintain their traditional way of life.
Market forces alone will not provide broadband for Maine’s rural communities, as internet-service providers need to make sure their investments will pay off. Often that’s not possible in much of rural Maine where there are too few customers per mile of broadband infrastructure. Residents in these small communities are taking matters into their own hands to avoid falling behind the rest of the global economy.
Existing state and federal policies to subsidize rural internet access are failing communities like Baileyville, Calais, Penobscot, Millinocket, East Millinocket, Medway and Islesboro, forcing them to solve their broadband problems themselves. In some places, internet capabilities are so unreliable that businesses struggle to run credit card machines, yet this internet access is often considered good enough to prevent them from qualifying for numerous state or federal programs.
Most existing government programs are designed to make sure everyone has some level of connection — not provide world-class speeds and a connection to the global economy. Providing bad internet doesn’t work anymore, and we need to stop trying to solve the internet access challenges of the last decade.
Instead, we need to effectively leverage limited public funding by making long-term investments through public-private partnerships to improve the business case for providing broadband to rural Maine.
We should be inspired by the Cranberry Isles and the other Maine communities utilizing public-private partnerships to help ensure a bright future. Merely being connected isn’t good enough to increase economic stability and growth or attract and retain new families. Government funding should reflect this. Maine shouldn’t continue to resign itself to being one of the worst connected states in the country.
Closing the digital divide by connecting all of Maine with broadband infrastructure is one of the few economic development challenges facing Maine that we know how to, and can actually, solve. The next two to three years is a critical time for Maine to make significant investments in broadband infrastructure.
Let’s make sure we make the right investments and send a strong message that Maine is open for businesses — now and for the future.
Briana Warner is the economic development director at the Island Institute. Nick Battista is the policy officer at the Island Institute.