Bring on the High- Speed Fiber Economy
Thursday, October 23, 2014 5:21 AM
When Nate Davis, 34, and his wife Chelsea were looking for a place to settle down, they could have lived anywhere in the country, but they chose Rockland.
Tech entrepreneur Nate Davis (right) and product designer Jo Lis at the Steel House, a collaborative working space for creative businesses & educational programs in Rockland (Photo: Andy O’Brien)
Back in Wisconsin, Nate had worked from home in his one-man technology company, Kromsware Corporation, doing a variety of software and mathematical modeling projects for businesses around the world. For the couple, Rockland had a number of attractive qualities, including relatively inexpensive housing near the water, walkable streets, safety, and a rich cultural and arts scene. The city is also near enough to business and personal contacts in Boston and New York City.
"Rockland affords a huge amount of the amenities of a big city with not a lot of the negatives of living in a big city," said Davis. "The scale of the downtown is not the scale of Portland or Boston, but it's interesting enough and lively enough for us to just stroll from our house to downtown."
Jo Lis, 36, a product designer from New Jersey, arrived in the area six months ago after he and his wife fell in love with a home in Tenants Harbor. For Lis, it was the strong sense of community that drew him to the midcoast.
"This is a place where connections are more impactful and meaningful," said Lis. "I felt like I found that on that beach in Tenants Harbor, and I found it when I clicked with Nate."
Currently, Lis, Davis and a half dozen other artists, designers and entrepreneurs have set up shop in the Steel House, a collaborative working space for creative businesses and educational programs on Main Street. It's a new business model for the area, but as Rockland has made the gradual transition from a post-industrial, down-on-its-luck fishing town to a mecca for food and the arts, Davis says there's an opportunity for it to also become a tech business hub.
"Unlike manufacturing, the infrastructure needs of technology companies are relatively modest," said Davis. "The real infrastructure need is the high-capacity, high-speed Internet. If you want to start a company you don't need a factory. You just need an office and that's it."
It was this kind of entrepreneurial spirit that the federal government aimed to boost through Maine's 3 Ring Binder project, which was completed in 2012, and resulted in a 1,100-mile, dark fiber-optic highway capable of up to 1,000 times faster speeds than the average 10-megabit DSL Internet connection. The $25 million in project funding came from the 2009 American Recovery and Reinvestment Act (the "Stimulus"), along with $7 million in matching funds from the Maine Fiber Company, which leases the fiber-optic line to telecom carriers on a non-discriminatory, open-access basis.
According to Maine Fiber Company Vice President of Business Development Jeff McCarthy, the goal of making the network open-access was to ensure that no single carrier would be able to monopolize the network. Currently, about a half dozen carriers in the midcoast have access to it. He said about 150 buildings in the state are connected to the network, but the company has no data on how many people use it. He noted that the line is currently hooked up to around 100 "community anchor institutions," including Mid Coast Hospital in Brunswick and University College Rockland, but it's up to forces of the free market to connect the rest of the area.
"Because it's a middle-mile network . . . anything else that we do has to be a commercially viable thing," said McCarthy.
However, aside from the mile-long expansion into Rockport funded by a combination of municipal and private funds, few carriers are providing the necessary "off-ramps" to the dark-fiber highway, which runs right up through the midcoast along Route 1.
According to Biddeford-based Internet carrier GWI, which set up the Rockport network, it costs anywhere from $20,000 to $60,000 per mile to run the cable from the fiber line, which is usually out of the price range for most small businesses. However, if businesses and government leaders could follow the Rockport model of pooling their resources to expand fiber-optic access, advocates say it could be a boon to a range of business sectors including manufacturing, insurance, hospitality, and banking, as well as high-bandwidth users utilizing Cloud back-up services, digital imaging, and telemedicine.
"There are very few businesses now that don't need high-speed Internet access," said GWI President Fletcher Kittredge. "Using the [fiber-optic network] you would never notice that your Internet connection is there again. Things would always automatically happen as quick as you can snap your fingers."
Maine Now: Slowest Internet Speeds in the Country
At the moment, most Mainers have limited options for Internet access. They can either purchase it through a wireless provider, a cable TV company, or telephone companies using the aging copper wire networks. In Rockland, those costs generally range from $26 to $40 per month for the slowest download speeds (1.5 to 2 megabits per second) to $43 to $60 per month (14 to 30 mbps) depending on how close the connection is to the source. According to a 2013 study by Gizmodo, a technology news website, Maine's top download speeds range from 7.3 to 10.9 mbps, which is about 40 percent to 60 percent slower than the national average.Although 93 percent of street addresses in Maine have access to some form of broadband Internet, Gizmodo placed Maine 49th in the country for Internet access, quality and speed. That puts the state even further behind when compared to other developed countries, as it's estimated that 30 countries have faster Internet speeds than the US. However, as Kittredge notes, Maine used to be in the top five states.
"It's not that our network got worse," explained Kittredge. "It's just that everybody else's got much better."
Kittredge said Maine's high-speed broadband access woes owe to a unique set of circumstances, not least of all the fact that we live in a remote, rural state with a small population. Kittredge points out that the financially strapped Fairpoint Communications doesn't have the resources to make investments in rural fiber-optic lines and Time Warner Cable, which has captured over 90 percent of the cable TV market share in Maine, doesn't have the incentive to expand. Meanwhile, for new high-speed Internet entrants like Google Fiber, Maine doesn't hold nearly the investment opportunities of the major cities. Absent a sweeping federal New Deal-style policy like the Rural Electrification initiative in the 1930s, Maine is left to go it alone.
"Because federal money for expansion is not there and broadband is not a regulated service, it doesn't fall under the same requirements as electricity and telephone," explained David Maxwell, program director of the state's ConnectME Authority. "But our society has evolved to the point where people are beginning to view broadband as a utility, and they're expecting that it's going to be available to them. As it isn't regulated, then there's no requirement that that happens."
Enter the Rockport Model
Up until recently the lack of high-speed Internet access had become a major barrier for Maine Media Workshops in Rockport, said MMW President Meg Weston. In addition to the large amount of bandwidth needed for digital imagery and photography, students were also increasingly using multiple devices to connect to the Internet, which was slowing the system down. Although the college's main campus is not far from Route 1 where the fiber-optic line runs, MMW also needed to connect its other buildings to the network, which was too expensive to do on its own. However, by pooling $30,000 from MMW, $23,000 in in-kind work from GWI, and $30,000 from town funds, Rockport was able to expand the fiber network about a mile into town, creating the first municipally owned gigabit network in Maine.
According to Weston, the students noticed the change right away.
"They were saying, 'this is phenomenally helpful to us because we're constantly transferring large files,'" said Weston. "We are just so appreciative of the partners that got together to make it happen. It's hugely important to us."
She noted that even the administration has noticed a difference as one finance report that used to take 45 minutes to run now runs in 30 seconds.
Since the launch of its municipal network, Rockport has become a national example of how public and private entities can work together to expand rural, high-speed broadband. Under the Rockport model, the town owns the fiber, so subscribers pay GWI for service and GWI pays the town $14 per month for each user.
According to Rockport town manager Rick Bates, the town has since hooked up the Rockport Library and will soon connect the Rockport Opera House, followed by the town office. He said while there are 70 rooftops in town that the network reaches, only four residential users are hooked up to it. Bates noted that the town is planning to do a feasibility study of how much it would cost to connect the rest of the town to the network.
However, he added that the success of the new network will depend on promotion and how much interest there is for the service from residents and businesses.
"The bottom line is just a question of math," said Bates. "It's a question of whether we will have enough money coming back into the fund in order to make the bond payment to pay for the wire on the poles."
Meanwhile other Maine municipalities are pursuing or considering pursuing the municipal fiber network model, including South Portland, Biddeford-Saco, Sanford and Islesboro. The Midcoast Economic Development District will be hosting an informational session for local businesses and residents interested in expanding the fiber-optic network, at the Rockport Opera House on Tuesday, October 28, at 4:30 p.m., featuring Rick Bates and representatives from GWI. While available grants for such expansions are limited, Kittredge points out that, for the potential economic payoff, it's a lot cheaper to build than a road or bridge.
"One reason we're so interested in the midcoast area is it's a magnet for creative digital economy types," said Kittredge. "People will finally be able to work where they live, not have to live where they work. You start drawing those people in and inject their high salaries into the local economy and they need plumbers, general contractors and teachers to teach their kids. It could really have a significant impact on the local economy."