by Mary Grow

At their June 3 meeting, China Broadband Committee (CBC) members returned to their application for a ConnectMe planning grant for expanded and improved broadband service. They also reviewed a more definite – but still with uncertainties – financial model for their project (see the June 3 issue of The Town Line, p. 3).

The ConnectMe grant was filed May 27. State officials replied, not just to the CBC but to all applicants, with a request for more information on two topics, with a deadline of noon on Friday, June 4.

CBC Chairman Robert O’Connor put the application on the CBC’s document-sharing site so members could work on it and offered to call ConnectMe the morning of June 4 to clarify what was needed. A revised application was filed and acknowledged; committee members expect to hear before the end of June whether China will receive $7,500 (to be matched by $2,500 in town funds).

The first major planning issue is a survey of telephone poles, unserved houses and other factors that will affect the cost of building new broadband infrastructure. CBC members intend to have Hawkeye Connections, Inc., based in Poland, Maine, do the survey (and if the plan comes to fruition, the construction).

Consultant Mark Van Loan, of Bangor-based Mission Broadband, said he and Mark Ouellette, President of Axiom Technologies, of Machias, developed the revised financial model. Like prior ones, it is based on estimated construction costs.

If the construction costs are close to accurate, the model sees China borrowing $4.8 million for 20 years to build out the system. Assuming 35 percent of year-round residents and 40 percent of seasonal residents sign up initially, a program offering four levels of service could have a $55 monthly fee for the lowest tier.

The plan would additionally provide two levels of business service. Ouellette, whose company is the CBC’s choice for providing broadband, expects most small businesses would be able to sign up for the less expensive residential service.

The most expensive tier, at $200 a month, offers gig over gig (one gigabit upload, one gigabit download) for households with a lot of devices and/or users. Ouellette thinks the offering is underpriced.

“Most of the world – not Maine, the world – can’t get a gig,” he said.

If the model’s assumptions are close to accurate and the proposed fee schedule is adopted, broadband service would run a deficit for not more than the first three years. After that, it would return an annual profit to the town over the life of the bond. Once the bond was paid off, the town’s share of the revenue would be larger.

Ouellette is confident that when residents start using Axiom, their satisfaction will lead to more customers and increasing revenue. The model does not include grant money, which committee members think is a definite possibility beyond the planning stage.

The model builds in a 25 percent profit for Axiom – but, Ouellette said, the company will be taking all the risks of providing and maintaining broadband service, and a bad year with hurricanes and ice storms taking down lines and poles would be expensive.

CBC members accepted the model, by consensus, as their working document.

They scheduled their next meeting for 4:30 p.m. Thursday, June 10. By then they should know whether China town meeting voters approved the revised Tax Increment Financing (TIF) plan, which includes funding for some aspects of broadband service.

Committee urges people to take computer speed test

ConnectMe officials and China Broadband Committee members urge people using computers to take the speed test, to see how much service they have. Speed test results help define areas that do not have adequate broadband service by state or federal definitions. The web addresses for taking speed tests are https://www.mainebroadbandcoalition.org/ or https://www.mainebroadbandcoalition.org/speed-test-info.

The site provides instructions and offers a link to a map showing area test results. China has numerous red dots indicating limited service.

by Mary Grow

After two more hours April 27 revising their explanatory document for China Community Broadband, China Broadband Committee (CBC) members presented it to the selectboard at a joint virtual meeting April 29.

The ensuing two-hour discussion focused on costs and on what service customers could expect.

Costs are a big unknown at this point, presenters said. The plan includes estimates, but they are only estimates, for two main reasons:

• Costs for construction materials are likely to change, up or down or both, by the time work starts, and the amount of construction work – for example, the number of new poles needed – is unknown until contracts are signed.
• The number of users who sign up for the new service, the “take rate,” determines monthly income, which needs to cover repayment of the proposed construction bond plus operating costs. CBC consultants have prepared scenarios based on different take rates without knowing which is closest to accurate.

Consultants Mark Van Loan and John Dougherty, of Mission Broadband, had three tables showing financial results with three different take rates, from 1,005 to 2,270 customers, resulting in three different fees per household, from around $85 per month to around $50 per month. These prices will vary with costs and with whether and by how much seasonal residents are billed differently from year-round residents.

Mark Ouellette, President of Machias-based Axiom Technologies, with whom CBC members are negotiating to provide service, said he usually gets high take rates as his company moves into new towns, including towns like China with existing providers.

In China, CBC members estimate that Spectrum Community Solutions serves about two-thirds of households; Consolidated Communications serves about 20 percent; and about five percent have no internet connection.

Another factor influencing costs to customers, CBC member Tod Detre said, is that the committee’s current plan is to offer only one level of service, which he calls gig over gig. The phrase means one gigabit per second can be uploaded to the net and one gigabit per second can be downloaded.

Selectman Wayne Chadwick doubted most people need that fast service. Detre agreed, and said the committee plan could be amended to offer as options lower service levels at lower monthly fees, if China residents prefer.

Assuming selectmen authorize CBC members to continue, a next step is to start a comprehensive community outreach program to determine how many households want what level of service.

Prompt sign-ups would provide useful information, but committee members and consultants realize that some residents will wait to see whether selectmen present the construction bond at the November 2 elections and voters approve it.

Service would be established if a minimum number of users sign up. Another issue concerning selectmen was whether people who sign up later would be charged a fee. Again, the answer is to be determined; one possibility would be to schedule future open enrollment windows during which fees could be lowered or eliminated because multiple houses would be connected while trucks and workers were in town.

Town Manager Becky Hapgood suggested selectmen discuss whether to continue to support the CBC’s work at their May 10 meeting. If they do support the committee, next steps include:

• The community outreach program, envisioned as including email, social media, meetings, printed materials and probably other methods;
• At the June 8 town business meeting, voter action on the Second Amendment to China’s Tax Increment Financing document, which adds broadband service to approvable TIF projects and provides funding to continue working with Mission Broadband;
• Selectmen’s request for authorization to issue a bond and a Nov. 2 voter decision on the bond.

The amount of the bond is undetermined because construction costs are undetermined. Committee members suggest an “up to” figure – currently estimated at $6.5 million – so selectmen are not obligated to borrow more than is needed.

When Chadwick asked Ouellette why Axiom didn’t borrow the money, Ouellette replied that towns get a much lower interest rate than private companies.

The CBC plan would have Axiom build the fiber optic infrastructure, using a contractor, provide service, take care of billing and maintain the system. The town would own the system and could change providers should Axiom prove unsatisfactory.

A contract between Axiom and town officials, to be signed if the bond issue is approved and nothing has impaired the company’s relationship with the town, would spell out details selectmen asked about, like the contract length, construction schedule, how often Axiom would pay China its share of revenue and whether the local on-call repair person would work for Axiom or for China.

The CBC’s goal is to provide a town-owned broadband system offering all residents high-quality service that is easy to update as technology changes, at a price that will cover costs and, after the bond is paid off, generate extra revenue.

The document CBC members presented to selectmen April 29, titled “Community Broadband Project – Declaration of Intent” is posted under the Broadband Committee in the list of officials, boards and committee on the China website, www.china.govoffice.com.

by Mary Grow

With four of China’s five selectmen joining their April 1 virtual meeting, China Broadband Committee (CBC) members rearranged their future schedule and discussed what might be good news.

Committee members had been scheduled to make a presentation at the April 26 selectboard meeting. Instead, they added a Thursday, April 29, meeting to their schedule, with selectboard members specifically invited to join the live stream.

The CBC was already scheduled to meet at 7 p.m., April 8, April 15 and April 22. Selectmen – and interested residents – are welcome to watch those meetings also, via the Live Stream tab at the lower left of the town website, china.govoffice.com.

The maybe good news came to CBC Chairman Robert O’Connor in an email from Peggy Schaffer, Director of the ConnectMaine Authority. She notified him that the 2021 American Recovery Act will provide $23 million in broadband funding to Kennebec County, with China’s share expected to be $430,000.

Schaffer’s email said the United States Treasury has not issued guidelines for using the funds. CBC members therefore do not know how much, if any, money might be applicable to China’s project.

CBC members looked into an earlier grant that provided funds only for unserved and underserved areas. Most China residents have access to broadband service at some level. At the April 1 meeting, committee member Jamie Pitney cited two estimates of households with no access, out of 2,100 to 2,300 properties: 83, according to ConnectMaine, or 140, according to current provider Spectrum Community Solutions.

Schaffer suggested the CBC prepare an informational presentation to the Kennebec County Commissioners.

CBC members spent most of the April 1 meeting repeating previous discussions for the benefit of selectboard members, with O’Connor, Tod Detre and Jamie Pitney sharing their expertise.

They said China needs better broadband service than Spectrum can provide with its current equipment and technology. A faster, more reliable and more flexible system would expand opportunities for residents, including adults working from home, children attending school remotely and everyone looking for entertainment and communication; and it would give China an advantage in attracting new, high-tech businesses.

They prefer a model that would have the town own the infrastructure and contract out building it, maintaining it and providing service. Under that model, should a service provider be unsatisfactory, town officials could seek a different one.

After reviewing proposals from Spectrum and two other companies, CBC members are negotiating with Axiom Technologies, of Machias, with assistance from consultants Mark Van Loan and James Dougherty of Portland-based Mission Broadband.

They are not ready to make a recommendation to the selectboard. They have no firm cost estimates; no consensus on covering costs (a bond issue has been discussed); and no agreed-upon definition of services to be provided.

Their present position is that the contractor(s) would do the billing and would maintain the town-owned infrastructure. After Selectman Wayne Chadwick asked what if something like the 1998 ice storm brought down lines all over town, CBC members thanked him for the reminder and planned to include a provision ensuring the contractor handled disasters as well as routine repairs.

Chadwick remained skeptical about town involvement. Everything government does is “top-heavy and inefficient,” he said; he would prefer a private contractor take on all aspects of the service.

CBC members agreed they will present updates at selectmen’s meetings, either by Selectman Janet Preston, the board’s non-voting representative on the CBC, or by O’Connor. Should they get new information, like Schaffer’s email, between meetings, they will share that, too.