Starting in January, the ConnectME Authority will impose a 10-cent monthly surcharge on every wired phone line in Maine to help fund broadband expansion projects in the state.

The surcharge, approved by the Legislature as part of Maine’s most recent biennial budget, will be used to facilitate broadband expansion projects in the state in 2020 and beyond, according to a rulemaking announcement issued Monday.

ConnectME is the public arm of Maine state government whose mission is to facilitate the universal availability of broadband internet service to all Maine households and businesses, among other initiatives.

Proceeds from the new surcharge will be placed into the ConnectME Fund, which provides small grants to fill funding gaps in municipal broadband expansion projects.

The fund currently receives about $1 million a year from a 0.25 percent assessment on all customer bills for wired communication services such as traditional landline and voice-over-internet-protocol phones. The new 10-cent, flat monthly fee for wired phone service is expected to increase the fund’s annual budget by anywhere from $750,000 to $1.5 million a year, ConnectME Executive Director Peggy Schaffer said.

The source of the funding comes from a 10-cent reduction in the E911 fee, which will instead be allocated to the ConnectME fund. Customers won’t see a net difference in their bills.

The rulemaking process announced Monday is to inform wired phone carriers that they will have to start collecting the 10-cent surcharge as a separate line item on customer bills in January. Wireless carriers such as AT&T, U.S. Cellular and Verizon are not required to collect the existing 0.25 percent assessment or the new 10-cent flat surcharge but can do so voluntarily if they wish, Schaffer said.

“No one has ever volunteered, surprisingly enough,” she said.

The ConnectME Fund is used to help fill gaps in funding for municipal broadband expansion projects. Over the past five years, it has helped fund 32 broadband expansion projects in Maine, with about $6.4 million invested in rural infrastructure connecting about 3,000 homes and businesses with broadband service.

In June, Gov. Janet Mills rolled out a $239 million bond package that would have, among other things, invested in broadband internet and renewable energy, replaced aging roads and bridges, and rebuilt the Land for Maine’s Future program. It proposed $30 million in bonding to augment ConnectME’s budget.

In August, state lawmakers approved a $105 million bond proposal for highway and road repairs, but rejected Mills’ proposal to take on additional state debt to finance land conservation, broadband expansion and environmental programs.

Schaffer said ConnectME will accept public comment on the rulemaking change through Nov. 15, but she noted that the 10-cent surcharge has been approved by statute and cannot be rescinded based on negative feedback from the public.

“We can’t make changes that the statute will not allow,” Schaffer said. “The statute has already determined what’s going to happen.”

This story was updated at 10:15 a.m. on Oct. 22 to clarify the source of the ConnectME surcharge.

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