Starting in 2016, Maine Fiber Co. will offer deep discounts in rural communities to increase access to its “Three Ring Binder” fiber-optic Internet backbone, the company said Friday.

Maine Fiber is trying to spur the growth of high-speed Internet service in communities where providers say sparse populations make it too expensive to offer significantly faster broadband service. To accomplish that, it plans to offer two years of free service followed by a deeply discounted rate to providers that lease fiber-optic strands to connect rural homes and businesses.

The adoption rate of broadband Internet users in rural Maine has been slower than the company had hoped for when it completed the network in 2012, said Jeff McCarthy, vice president of Maine Fiber.

New hook-ups “were kind of faltering,” McCarthy said. “They were only moving along at a slow pace.”

Under the incentive program, Internet providers will pay nothing for new connections for the first two years, he said. Thereafter, they will pay $1,250 a month per 100 miles of fiber, rather than the existing rate of $1,750 per 100 miles.

Over the first five years, that represents a total savings of about $60,000, or 57 percent. The discount isn’t likely to translate to lower prices for consumers, but it could allow providers to operate in areas in which it previously would not have been economically viable.

Mark Ouellette, president and chief operating officer of Machias-based Internet service provider Axiom Technologies, said the price reduction creates an opportunity to serve more customers in rural Maine.

“Maine Fiber’s announcement makes serving customers with fiber connectivity much more economically viable and a company like ours more likely to use Maine Fiber to help bring connectivity across our current footprint and beyond,” he said. “These rate changes are exciting and show (Maine Fiber’s) commitment to helping to revitalize Maine’s rural economy.”

One important aspect of the incentive program is that it will encourage rural broadband providers to provide faster service even in areas where they already have a presence, said Phillip Lindley, executive director of ConnectME Authority, a state agency charged with fostering universal access to broadband service in Maine.

ConnectME offers grants to rural service providers to help them with their up-front capital expenses. Only providers vetted and approved by ConnectME will be eligible for the two years of free service, according to Maine Fiber.

More than 90 percent of Maine residents have access to download speeds of at least 550 kilobits per second, which used to be the standard for broadband, Lindley said. But in January, the standard for true broadband increased significantly to 10 megabits per second, both upload and download, he said, adding that fast upload speeds are particularly important for businesses. A megabit is equal to 1,000 kilobits.

Lindley said the incentive program is “certainly going to have a big impact” on rural service providers’ ability to meet the higher standard.

“You’re going to see more of them providing the 10/10 service,” he said.

In a news release about the incentive program, several Maine officials emphasized the need to connect more rural residents with high-speed Internet service.

“Too many people in Maine today don’t have access to economic and educational opportunities because they lack high-speed broadband, but thankfully, Maine Fiber Co. and others are stepping up to ensure Maine keeps pace in the digital age,” U.S. Sen. Angus King said in the release.

Maine typically ranks in the bottom of states with high-speed Internet access, and behind nations like Estonia, according to a report from Akamai Technologies, an Internet and cloud service provider in Cambridge, Massachusetts.

The Three Ring Binder network, built with a $25.4 million grant and $7.4 million in private investment, was completed in mid-2012. Connecting 172 communities, it consists of about 200,000 strand-miles strung completely on telephone poles in three loops that wrap around the state, including rural areas that previously lacked the potential for high-speed Internet access.

The network does not connect directly to homes and businesses, so it requires third-party Internet service providers to build and maintain “last-mile” connections to individual customers. The greater the distance between customers and the fiber-optic backbone, the more expensive those last-mile connections are to maintain.

Thus far, Maine Fiber has 28 service providers leasing a total of 20,000 strand-miles, roughly 10 percent of the network’s total capacity, McCarthy said. By Jan. 1, it expects to have about 240 “anchor” customers connected to the fiber-optic network, including schools, libraries and hospitals, he said.

 

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