Southport residents seek answers about broadband project’s viability

Fri, 04/22/2022 - 2:15pm

Supporters of a municipally owned fiber-optic broadband network described it as the “town’s future.” Opponents believe the current proposal is too expensive and fiber-optic will eventually arrive without having to “mortgage their future.”

On April 20, residents had an opportunity to quiz municipal officials and Axiom Technologies President Mark Ouellette about the proposed $2.1 million initiative which will provide 100% fiber-optic broadband to the island. Over 70 residents jammed themselves into the town hall for a two-hour session on what now has become a controversial issue. Last week, selectmen received two citizen-initiated petitions designed to “re-set” what happened last May by rescinding authority allowing selectmen to seek funding for building a municipally owned fiber-optic network.

So far, the town has spent $640,000 on materials for constructing the network. A “yes” vote would direct selectmen to stop the project. Petitioners also support a less expensive initiative designed to provide internet service to the town’s “underserved” population.  The second petition proposed creating a fund for helping about 25 households without broadband access. Petition No. 1 garnered 144 signatures and No. 2 received 82.  

Selectman Gerry Gamage opened the informational meeting explaining the town had made progress in finding grants and subscribers. He reported the town would soon know if it received a $400,000 ConnectME grant. The town previously received an Island Institute $10,000 grant. He also reported the project has 134 subscribers. But the petitions would likely end any further project progress. Gamage told residents the looming special town meeting vote jeopardized the project. “We’re expecting word next week (April 27) about the $400,000 grant. The petition puts us in limbo. Can we accept this grant, or others, in good faith knowing there is a vote coming?”

Besides potentially losing money on material resales, the town also has financial obligations to Axiom Technologies and a subcontractor who will construct the fiber-optic network. “I’m concerned a ‘no’vote may have repercussions. This is not as easy as some people make it out,” Ouellette said. “This is not a threat, but there are other things to consider. We are a community-based company and we will work with you regardless,” Ouellette said. 

Petition organizer Tom Myette believes the project will struggle to make the “tax neutral” pledge a reality. He criticized the selectmen for not seeking outside counsel in reviewing the agreement and financial projections. Following the meeting, he sent an email to The Boothbay Register with his observation from the informational session. 

“(It) was a frustrating experience. There was (an Axiom) salesman who had the podium with the selectmen and the Island Institute. He opened, after the selectmen, threatening the group that withdrawal from the contracts (a possibility with the petition and upcoming vote) would be ‘breach of contract’ and ‘not as easy as many had been (led) to believe.’ There was no lawyer there, again, last night, representing the town’s side. The selectmen seemed content to take that as fact. These are the same selectmen who openly admitted, again, that they hadn’t engaged an attorney,” he wrote.

Another petition circulator challenged selectmen’s and Axiom’s figures based on a “tax revenue neutral” proposition. Ouellette explained the town would receive $30 for each subscriber and generate about $111,000 in municipal revenues based on 315 subscribers. Doug Jones projected the project would need 533 subscribers. “Your figures don’t include all the cost categories, and your tax neutral number is out of date. You should amend your figures, and Axiom should assume more of the financial risk,” Jones said. 

Ouellette countered Axiom had worked on 10-15 projects similar to Southport’s and each one reached the projected subscribers and achieved tax neutral status. “Actually, I think the opposite is true. You should show your numbers. I don’t know where you get the 533 number. Our numbers are straightforward, and true.” 

Several residents who support the proposal voiced dissatisfaction with Spectrum’s customer service and pricing. Selectmen promised the fiber-optic system would provide the highest quality network at a lower price. “This is the future,” Selectman Smith Climo said. “We do have broadband, but it’s a dying system,” he said. “The fiber-optic is available to everyone who wants it which is also a superior product at a lower price.”

Myette portrayed the selectmen’s description of the better product at a lower price as a false choice. He described the proposal as “mortgaging the future.” He is concerned the $2.1 million price is excessive considering other broadband providers would likely bring fiber into the community. “Yes, the entire issue is about the future,” Myette said. “But broadband doesn’t have to be fiber. It’s coming one way or another. So it will be like we are competing with ourselves. All we are asking is for you to prove you can get the subscribers before moving forward.”

Resident Jen Britton asked if the contract had language barring a rate increase within the first five years. Ouellette believes once the network is in place it’s more likely a rate reduction would occur. He said the broadband costs are currently trending lower. “There is no language preventing a rate increase for five years, but we will add it,” Ouellette said.

Resident Adam Climo, 31, returned to his hometown last year after living in Ohio. He works from home which makes reliable internet a necessity. “Our service comes and it goes which makes it tough. But this isn’t about us. It’s about our son and the next generation. If we can do something for them which is better quality and lower cost, that works for me,” he said. 

Gamage reported selectmen were following the town’s advice on scheduling a special town meeting. There is no date scheduled. Gamage told residents the board must schedule one within 90 days.