By Darren Fishell, Bangor DailyNews
PORTLAND, Maine — FairPoint Communications plans to take $80 million in federal funds to expand broadband Internet service to areas of Maine, where a company executive said “market forces cannot support expansion.”
The six-year disbursement of federal cash holds the greatest benefit for Aroostook County, according to analysis by the Federal Communications Commission, which offered the funds to FairPoint in April during a second round of awards through its Connect America Fund.
The fund targets rural areas where investments in broadband fall within a Goldilocks zone for cost — deemed too expensive for the private sector to go alone but not exorbitantly expensive.
“The [funds] will bring Internet connectivity not just to Main Street but also to rural parts of the state that are costly to serve and where market forces cannot support expansion,” Mike Reed, president of FairPoint in Maine, said in a prepared statement.
Through the program, FairPoint will receive $13.3 million annually for six years to support broadband expansions in areas that meet the FCC’s criteria for investment.
Aroostook County makes up about one-quarter, or $3.5 million, of that annual investment amount the FCC has identified at the county level.
Penobscot County stands to see the second-highest benefit from the funds, with an estimated $1.9 million in possible annual investment.
While the FCC arrived at its offer to FairPoint working up from eligible locations in each county, the breakdown doesn’t necessarily align with how the company will allocate the funds year to year.
According to the FCC, the program sets requirements for the number of locations served across the entire service area in the state, not at the county level. The program requires the locations to have access to download speeds of 10 megabits per second and upload speeds of 1 megabit per second.
Nationally, FairPoint decided to accept $37.4 million in annual disbursements over the six years to expand rural broadband in areas across 14 states where it operates.
That funding comes from a total pool of more than $1.6 billion offered to telecom companies as part of the FCC’s shift of subsidies from landline telephone service to Internet infrastructure.
FairPoint, in a statement to investors, said it expects to lose $39.3 million in federal support for high-cost telephone services.
Paul Sunu, FairPoint’s CEO, said in a statement the company’s agreement to participate in the program will involve “committing hundreds of millions of dollars” to building and upgrading Internet infrastructure in remote areas of its service territories.
This article appears through a media partnership with Bangor Daily News.