The towns of Orono and Old Town are fighting Time Warner Cable for access to a $125,000 grant to build out four miles of jointly owned fiber-optic broadband network to about 320 subscribers.

The ConnectME Authority will hear both sides of the fight over that grant during a meeting Friday, deciding whether the award violates a law limiting how much a grant-funded project can compete with existing Internet service providers.

The company argues that the agency only has the ability to give grants in areas it deems “underserved” or “unserved,” and that projects getting grants should overlap with less than 20 percent of the customers of an existing provider.

The towns, which formed the company OTO Fiber to develop the project, argue that the service does not duplicate existing services and that other Internet service providers would be able to contract with the company to use the open network that would be built by Networkmaine, a unit of the University of Maine System.

At the same meeting, the ConnectME Authority will consider significant increases to its standards for defining “unserved” and “underserved” areas of the state, which stand to put more than half of the state’s households in the category of those underserved.

But Phil Lindley, executive director of the ConnectME Authority, said that’s unlikely to factor into the dispute between Orono and Time Warner as the company has said it already provides speeds that would meet the new standard, meaning Orono would still not meet the unserved or underserved definitions.

Sophie Wilson, Orono’s town manager, contested in a letter to the authority last summer that Time Warner’s network is not comparable to what the towns and university have proposed.

If the project clears the challenge, it would use $112,000 in municipal funds, $118,720 of other town resources, $125,000 worth of work from the University of Maine and $70,000 worth of work from Maine Fiber Co., which operates the Three Ring Binder project.

If the town does not get the funds, Orono’s assistant town manager Belle Snyder said the town would seek alternative grants and possibly use some tax-increment financing district funds for the initial buildout.

Darren Fishell

Darren is a Portland-based reporter for the Bangor Daily News writing about the Maine economy and business. He's interested in putting economic data in context and finding the stories behind the numbers.