Myth Busted: Private Firms Do Invest in Rural Fiber Networks

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OTELCO is dedicated to bringing fiber infrastructure to rural Maine.

Rural fiber networks are a hot topic in the political scene at the local, state and federal level.  Those interested in economic development, aging in place and education are particularly avid supporters of deploying fiber networks for high speed Internet access, because of the immense value Internet networks have in these areas.  These motivations have led some municipalities to take matters into their own hands and invest in building fiber networks of their own.

Rural fiber networks built by Maine’s independent telephone companies

One reason local governments have undertaken construction of rural fiber networks is the supposition that private industry is unwilling to make the investment.  It is commonly believed that private companies won’t invest because of the perceived lack of return on investment.

However, there is a group of companies that were founded to make just this sort of investment in the telephone network. These companies, known as Independent Telephone Companies  were born of a need to bring telephone service where the Bell System didn’t want to invest.  They were funded and built by local farmers and businessmen to serve their communities, and have done the job well for 100 years, driven by a commitment to service.

Independent telephone companies don’t just deliver telephone service, though.  They were among the first to bring broadband to their customers, and serve a higher percentage of their customers with high speed Internet than their large company counterparts do.  Moreover, these companies are actively investing in rural fiber networks today.

Here are just a few examples of rural fiber networks being built by Independent telephone companies in Maine over the last few years.  Some of these investments were supported in part by existing grant programs like ConnectME infrastructure grants, but nearly all have required substantial private investment to cover 50% or more of the cost of construction.

  • In 2012, Union River Telephone became the first telephone company in Maine to provide fiber to the home service to all its customers who receive commercial power. The company’s 880 square mile service area encompasses the exchanges of Aurora, Beddington and Otis.
  • In 2015, UniTel completed construction of an 85 mile fiber to the home network in the towns of Newburgh, Dixmont, Knox, Thorndike and Troy. Customers on this network can choose 32Mbps symmetrical Internet connection or customize their service with up to a gigabit per second.
  • Tidewater Telecom and Lincolnville Communications have completed 9 separate fiber to the home projects reaching 541 homes in rural parts of Alna , Appleton, Bremen, Bristol, Damariscotta, Hope, Jefferson, Lincolnville, Newcastle, Nobleboro, South Bristol and Whitefield. Customers can choose any one of the company’s products with up to 50 megs of symmetrical bandwidth or customize their connection to up to a gigabit per second.  The company also provides IP TV over its fiber network.
  • OTELCO recently began offering fiber to the premise services along a 2.5 mile stretch of the Portland Road (Route 100) in Gray, and also expects begin construction of fiber to the home networks in additional locations in Gray and Old Town later in 2016.

Independent telephone companies are a testament to the fact that there are indeed private companies willing to serve the rural parts of our country.  These companies are already committing private funds to the construction of rural networks, sometimes with subsidies, but often without.  The idea that private companies are unwilling to invest in rural America may indeed be more myth than fact.