95% of residences and businesses in Fair Point’s service area had access to broadband by February, 2014.
$351 million was invested by the company, including some federal funding, to reach that goal.
“The cost to get to 100 percent coverage is significant,” said Patrick McHugh, FairPoint’s state president. “The problem is there is no return on investment, so if we can’t partner with the federal government, the state of New Hampshire or the communities themselves, we likely won’t build it.”
While telephone landlines continue to decline – the number was about 7 percent lower in the second quarter compared to a year earlier – the number of broadband lines has jumped more than 39 percent. In addition, a wider broadband network enables the company to better reach out to businesses, which the company is counting on to make up for declining revenue from residential phone customers.
There remain some 4,500 homes and businesses that do not have any high-speed Internet connection – be it through FairPoint, Comcast or any of their rivals – according to Carol Miller, director of broadband technologies for the state Department of Resources and Economic Development.
The state is “actively seeking funding from grants – federal and local sources,” said Miller, adding that “once every household has the availability, we will still have challenges with adoption, affordability, bandwidth capacity to ensure functional use of broadband.”
One source is the Connection American Fund, a federal program designed to make sure there‘s affordable broadband coverage everywhere in the nation.
According to FairPoint’s filing with the U.S. Securities and Exchange Commission, there was a bit of a tussle between the company and the Federal Communications Commission about how much money the utility should get without actually providing 100 percent coverage.
FairPoint ended up with a $2.9 million grant (some $740,000 earmarked for New Hampshire), one of the largest amounts in the nation, and it is one of the reasons the company was able to reach its 95 percent commitment.
The PUC also prodded FairPoint, though more with a stick than a carrot.
The company owed the state $2.5 million in penalties for not meeting service requirements during the troubled transition from Verizon – a period when customers complained of long delays in getting connected and interminable waits when trying to reach the company.
After FairPoint went bankrupt – and the PUC was just one more creditor trying to get paid – both sides reached a deal that permitted the company to spend the penalty funds on broadband connections, if FairPoint kicked in another $500,000.
That brought broadband to another 2,400 customers, said Kate Bailey, who heads the PUC’s telecommunication division.
2014 House Bill 286 would have allowed towns to bond for telecommunication infrastructure, putting it out to bid, like any other municipal project. Fairpoint opposed the bill. The House passed that bill on a roll call vote, but the Senate sent it to study.
FairPoint supported 2014 HB 1458, which allows a town to establish a special assessment district and tack on a special tax for something like broadband. This differs from tax increment financing (TIF) districts because they don’t create new money but simply allocate existing taxes from a particular district for a particular purpose, said Don Jutton, president of Municipal Resources Inc., a consulting firm based in Meredith.
It also differs from betterment districts, since they only involve such things as water and sewer lines. And it differs from a village district because that involves setting up a mini-government, a village within a town.
HB 1458 would allow a governing body to draw up the district, though a majority from the designated area would still have to approve any spending. The House sent this bill to study. Johnston didn’t object to the bill in principle but agreed that lawmakers needed more time to think it over before letting towns increase taxes on certain areas.
[Sources: http://www.nhbr.com/August-22-2014/Can-NH-ever-build-the-last-mile-of-broadband/ byBob Sanders, nhbr.com, August 21, 2014]