Biddeford Internet Corp., the Internet service provider doing business as GWI, is in talks with fiber-optic network owner and operator Maine Fiber Co. to settle a $3.7 million lawsuit, according to documents filed in Cumberland County Superior Court.

The lawsuit, filed in January by GWI, alleges that Maine Fiber failed to build out Maine’s “Three Ring Binder” network – the spine of high-speed broadband service – so that local companies could tap into it and provide affordable last-mile Internet service to their customers.

It also accuses Maine Fiber of overcharging GWI for licensing fees and thwarting a potentially lucrative sublease agreement between GWI and an unnamed third party.

Maine Fiber has called the lawsuit a ploy to gain leverage in a contract dispute between the two companies.

Court documents show that GWI requested and was granted an extension of its original April 12 deadline to reach a settlement agreement. Now, the parties have until Aug. 12 to reach a deal.

Maine Fiber was never served with GWI’s complaint because the companies immediately initiated a settlement process, the documents show. The two parties are working with a mediator, GWI said in court filings.

The complaint by GWI alleges that Maine Fiber owes the company at least $3.7 million. About $728,000 is due because Maine Fiber began charging GWI licensing fees before completing the Three Ring Binder network, according to GWI.

Maine Fiber was formed to build a 1,100-mile fiber network and provide high-speed Internet access to rural parts of Maine. The $31.7 million project, which included $25.4 million in federal stimulus funds, was finished in mid-2012. GWI has argued that the network has too few connection points for local Internet distributors to tap into affordably, so it is incomplete.

GWI also is seeking $3 million for alleged “tortious (wrongful) interference” by Maine Fiber with regard to a prospective GWI customer.

An unnamed third party was in discussions to sublease a portion of the Three Ring Binder from GWI, the company alleges, when Maine Fiber stepped in and threatened not to allow the sublease agreement.

As a result, the third party signed an agreement to lease directly from Maine Fiber, according to GWI’s complaint.

GWI held a news conference when it filed the lawsuit, during which its founder and CEO, Fletcher Kittredge, accused Maine Fiber of misusing the federal stimulus money to build a fiber-optic network that does not work as intended.

But Maine Fiber CEO Dwight Allison said at the time that GWI’s lawsuit was simply an attempt to gain leverage in a contract dispute. He said the allegations by GWI have no merit.

Maine Fiber’s attorney Aaron Pratt said the settlement discussions appear to be going well. “We’re hopeful that we can resolve it,” he said.

J. Craig Anderson can be contacted at 791-6390 or at:

canderson@pressherald.com

Twitter: jcraiganderson