Case Study | Islesboro, ME

Owned by Theodore Pietz
Last updated: Mar 08, 2020

As of the 2010 census, there were 566 people, 270 households, and 161 families living in the Town (over 14.29 square miles of land).  A health center and a pre-school and public K-12 central school for roughly 120 students.  Summer population is roughly 2000.  630 lit Fiber-to-the-Home (FTTH) subscriptions as of December 2019! 

Status:  As Borat would say... "Great Success!"  The infrastructure belongs to Islesboro, which maintains it.

Relevancy:  Islesboro did not rely on grant monies and is an Island community that had a "middle mile" provider. 

Key factors to success:

  • Municipally owned, privately operated by Great Works Internet (GWI) of Biddeford, ME, which has an exclusive 5 year contract.
    • Can get cheaper financing to build a network.
    • Can tap volunteers for research and community outreach work.
    • Acts as the billing agent to substantially reduce monthly GWI management fees.
      • GWI invoices the Town for monthly per subscriber fee, subscriber service dispatches, connectivity, oversight management, repairs and upgrades.
      • Town invoices subscribes for damage and owner-responsible repairs.
  • 90% take rate.
  • Piggybacking on "middle mile" undersea fiber laid by Central Maine Power (CMP).

Paraphrasing multiple online sources related to the project:

Role of municipality:

Kittredge of GWI disagreed with Davis on how a municipality can act to offer broadband. He argued that municipalities can get cheaper financing to build a network and can tap volunteers for research and community outreach work.

Middle mile:

They expected to lease poles from CMP to hang fiber, but CMP’s plans to install a new fiber optic line to enhance electric service soon became part of the community network design. The new cable installation was necessary to replace the original 1955 cable to the island and to to serve as a redundant line to a cable that was in stalled in 1992.

Costs:

The cost of maintenance and the cost of the bond has cost less for Islesboro than the community anticipated and less than poor service from the incumbent.

$360 annual fee + $30/month of tax increase = roughly $60 a month!  Optional $25/month 3rd party phone service.

Property owners also pay a modest increase in property taxes to satisfy the municipal bond the community issued to pay for deployment. In total, most property owners pay less than $85 per month for gigabit connectivity and the optional voice service from GWI.

re the underlying costs. The Town voters then approve an annual budget to maintain, manage and insure the infrastructure so that it remains in good working order. The total IMB FY19 tax burden - the bond payment and budget to maintain the network - is $1.4M or $1.40 per $1,000 in valuation.

Total estimated debt service of this 20 year ($3.8 million principal) bond issue was projected as $5,313,779.

Offered free construction time installation, but now charge about $500 for new subscribers (time and materials). The system is a dark fiber system in that the Town owns the infrastructure and we contract with an ISP to light it up, connect to the Internet and support the subscribers.  

The Town’s taxpayers accepted the capital construction expense risk, owns the dark fiber infrastructure asset and maintains it.  The taxpayers pay for the construction bond ($266K/year) and any infrastructure maintenance. $360 annual subscriber fee pays ISP fees for all the connectivity and support, which leaves a remaining Town-wide taxpayer subsidy of $191K (2019) to cover:

  • Storm insurance
  • Pole attachment leases
  • Submarine fiber cable lease
  • Legal services/Town staff (billing)
  • Utilities/fuel/bucket truck operations
  • GWI management costs
  • Underlying Internet connectivity fees
  • GWI per subscriber service and support fees
  • Repair and restoration services

Outlying Island coverage:

There are also three wireless radio links that service subscribers on 700 Acre, Minot and Seal islands.

Single variant:

Every connection in Islesboro provides gigabit Internet access, the decision to limit offerings to one tier was a way for the community to reduce costs. There's no need for complicated inventories of different types of gear, they know that every premises has the same gear and level of service, making billing easier and more streamlined, and they received a substantial discount because they bought so many of the same type of electronics. They knew that standardization would simplify and reduce costs and wanted gigabit service because it accommodates future innovation that demands more capacity.

History/Overview:

A 2015 RFI written by Tilson (for $50K), funded 50-50 from Town funds and donations resulted in a handful of responses (Fairpoint, TimeWarner, and GWI). Incumbent communications firms proposed improvements while asking for several $Ms in inducements to overcome the small, rural market issues. The go-forward proposal came from GWI of Biddeford, Maine. It outlined a public-private partnership that transformed into the IMB Proposal.

On May 30th, 2015 voters approved spending $206,830 to fund the up-front design work by Tilson Engineering to design a FTTP system and draft the necessary bid documents needed to get a firm construction bid for the Committee's proposal to build and operate a 1 Gbps fiber Internet for all residents and business on the island. This one-time expense paid for the engineering, design work, consulting, legal and pole-attachment agreements needed to put the network construction out to bid. This work yielded firm bid for construction, a GWI operating contract and business plan, subscriber data, pricing, etc. This all provided information to voters that was needed to make the final project a formal go/no-go decision.

2016 Annual Town Meeting voters approved a $3.8M bond (AA rating → 3.3% for 20 years = $266K per year in bond repayment service) to fund construction of a dark fiber-to-the-premise infrastructure capable of delivering 1-gigabit Internet access to every home or business on Islesboro as well as the neighboring Minot (1000' offshore), Seal (2000' offshore) and 700 Acre Islands (1200' offshore).

Following a Town Meeting vote to approve an enabling IMB Ordinance, the Select Board appointed a five-person IMB Oversight Committee to meet quarterly in order to review the operational and financial aspects of the service, propose updates to the Town’s IMB policies and to support the Town Manager in operating the network.

The construction of the entire fiber to the premise system cost $3.8M and was done on budget by several contractors, but mostly Waveguide of Nashua, NH (also does network design). The construction involved 46 miles of fiber, the central office building and electronics along with the subscriber connections to 625+/- premises with the electronics and fiber. 

The Town contracts with an Internet Service Provider (ISP), GWI of Biddeford, ME to light the network, connect subscribers to the Internet, provide subscriber service and support, and perform all maintenance and upgrades to the Town-owned infrastructure. GWI also offers an independent, optional phone plan utilizing the fiber connection. The Town maintains the subscriber list and interacts with the stakeholders. The Town, acting as the billing agent, substantially reduces the monthly GWI management fees. GWI invoices the Town for subscriber service dispatches, connectivity, oversight management, repairs and upgrades.  Town pays for maintaining the subscriber connection in good working order.

GWI provides Internet connectivity, service, support, and maintenance.  Provides a 24 hour 7-day-a-week telephone support center (1-866-494-2020) and contracts with an on-Island technician for subscriber service and repairs. When necessary, GWI and the technician arrange for additional help to be brought in from off-island.  

Resiliency/What Happens After A Big Storm?:

Significant damage may require on-call off-island repair crews. The yearly operating budget provides for a such events. The Town also carries disaster recovery insurance to cover significant storm damage requiring off-island contractors to repair.

Other fees: 

NOTE:  December 12, 2019:  Select Board meeting the decision was taken to significantly reduce the upfront cost of installations.

Installation Fee – estimated based on a property visit

Reactivation Fees - $100 for re-connection within 4 months and $300 for re-connection after 4 months.

Late Fees - $25/mo. for late payments. Involuntary disconnection occurs after 2 months of non payment

Service Fees – For active subscribers the Town maintains a working connection to your home or business free of service charges. If you need support or service off hours or on weekends then there will be a labor charge for dispatching the technician. The telephone support center and technicians will have discretion to help with simple problems you have using the working ONT. However, if your issue is extensive then they may advise you that you are responsible for labor and materials. At that point you can choose to pay or not. In addition, the Town must charge you for damage to the IMB equipment.

http://townofislesboro.com/committees/islesboro-municipal-broadband/