A lot has happened in Sanford, Maine since our last report on their municipal fiber optic network discussions. After a year of deliberations over different proposals, the city recently announced plans to begin building a 32-mile municipal fiber-optic network.
The city of Sanford is inside York County, situated about 35 miles southwest of Portland. The network will provide connectivity to businesses, government entities, non-profit organizations, and residences in Sanford along a limited route where there is sufficient customer density. City leaders plan to also provide a foundation for future expansion of the network to additional residential areas in the city. The network will be open access, allowing multiple ISPs to provide services via the publicly owned infrastructure.
The city will partner with Maine-based company GWI (Great Works Internet) to operate the network. Readers may recognize GWI as the same company working with Rockport, Maine's first community to invest in a municipal fiber network.
Once they complete the buildout, Sanford will be in an elite class of a just few cities nationwide that provide widespread access to 10 Gbps broadband. It is a bold plan for this city of just over 20,000 in a state that last year ranked 49th in the nation in average broadband speeds.
Like the growth council, this project is a public-private partnership stemming from the exploration of a best business model allowing for municipal investment and input while leveraging the strengths and expertise of private sector for-profit business. The growth council recognizes the collaboration of the public private partnership as the best means to accomplish the City’s economic development strategies.
The new network is also the first major loop in Maine that will connect to the state’s existing Three Ring Binder network. Constructed in 2012, the middle-mile Three Ring Binder spans 1,100 miles around much of Maine. The network was a product of private investments and $25 million in stimulus money from the 2009 American Recovery and Reinvestment Act.
According to a study commissioned by the Economic Growth Council, the network could generate between $47 million and $192 million in economic benefits over the next decade. The Economic Growth Council and the the city are still seeking funding to build the network, estimated at $1.5 million. The city expects to cover costs through agreements they’re pursuing with anchor institutions and savings they'll see by eliminating the cost of leasing lines to city government buildings and schools.
“Tax Increment Financing (TIF) is a method of public financing that uses future gains in property or sales taxes within a defined area to subsidize a redevelopment or infrastructure project. A local jurisdiction can borrow money up front, build the project, and then use the increased tax receipts it generates to pay off the debt over a period of years. The concept is actually pretty simple: capture the value that something will have in the future to build it now.”
A small number of municipal broadband projects have been funded with TIF, but this arrangement can be controversial as it removes substantial property value from the general taxbase. Most choose revenue bonds, interdepartmental loans, or by redirecting savings gained when city can build incrementally thereby avoiding payments for leasing lines from providers. Fortunately, Maine remains one of the states where local communities have the freedom to choose whether or not they invest in Internet networks and how they finance such a project.
At the meeting to announce plans for the network, U.S. Senator from Maine, Angus King, summed up the network's importance to the state's future:
“High-speed broadband is a gateway to economic and educational opportunity in the 21st century,” King said. “But right now, there are too many people who are denied those opportunities simply because they don’t have adequate Internet access.”