Construction workers and painters scurry to finish transforming Cuckolds Light off Southport into a high-end bed and breakfast in this 2014 file photo. Credit: Troy R. Bennett / BDN

A small island town must decide this month if it will continue to create its own broadband system or scrap it and lose hundreds of thousands of dollars it has already invested.

Voters in the Lincoln County town of Southport charged selectmen in 2021 with seeking a bond of up to nearly $2.5 million to build a town-owned fiber system. One year and $653,000 later, the project is in danger after opponents gathered enough signatures to force a town meeting vote on three questions related to the project on June 22.

It shows the perils of starting a community-owned network with up to $500 million in federal and state funds available in Maine expansion in the next few years. Entrenched internet providers and their allies have fought proposals to expand municipal broadband or floated service expansions. The latter is being proposed in Southport, where opponents have accused selectmen of spending heavily before they could be certain the project is viable.

Town officials say residents need to be patient before they can see the results. Their success will hinge on whether they can convince residents that the sunk costs are worthwhile and simultaneously increase subscriptions so the project can live up to its financial promises.

A recent open letter from selectmen to townspeople said the system must be up and running for a year to produce revenue. It also outlines hundreds of thousands of grant dollars that the town can use to finish the project, including a $400,000 grant from a state broadband program.

That would have to be returned if the project is defeated at the town meeting this month. But the costs paid up front with taxpayer money — such as lawyers, licensing and a potential default fee from Axiom Technologies, the Machias-based contracted provider — cannot be.

“We would urge all residents, voters and non-voters alike, who favor this Fiber Optic System to also ‘VOTE’ by signing up for service as soon as possible,” the letter, signed by selectmen Gerald Gamage, Mary Koskela and Smith Climo, said.

That upfront money is part of what rankled Doug Jones, who helped circulate the petitions for June’s vote. He said the town should have waited to get bond money or ensure the project would have enough subscribers to be financially feasible. Officials have pegged that number to around 320; the service had less than half in April, the Boothbay Register reported.

“I just don’t think the town can compete with these big companies,” he said.

But Gamage, the head selectman, said the town did exactly what it was charged with. Installing a network can require upfront costs and the decision to buy materials upfront was advised by a town attorney, he said. The costs would be repaid when the system goes online. That takes customers, and he is confident they will come.

“I think it’s human nature to wait until the last minute or until you see some progress,” he said.

Three questions on the warrant address broadband: Question 2 would revoke the authority given to selectmen to create the project, Question 3 would a $60,000 fund to connect the 10 percent of addresses that do not have internet service that meets Maine’s high-speed standards and Question 4 would affirm last year’s vote.

Progress has been held up as the town waits for both Central Maine Power Co. and internet service provider Consolidated Communications to give permission to allow Southport to hang wires. Charter Communications, the parent company of Spectrum, is still waiting.

The company has offered to pay to connect the remaining people at the town’s expense, which is what the money in Question 3 could be used for. Such a service would be more reliable for the town and keep its “limited government resources” focused on providing fast internet for those who do not have it and not competing with providers, Lara Pritchard, a Charter spokesperson, said.

That competition is what has spurred Spectrum and other companies to announce many recent service expansions. Their offer to do so was credited with defeating a town-owned network initiative in Hampden. A vote in Leeds to create their own network was opposed by a spinoff group of the conservative Maine Policy Institute, which has taken funding from Charter in the past, Maine Public reported.

Arguments about who should manage a community’s broadband infrastructure are common, said Debra Hall, the chair of the Midcoast Community Internet Coalition, a group of two dozen towns working to bring broadband to their area.

But as the internet becomes more critical to rural areas, she said residents need to start thinking about it as more of a utility than a private service. Using federal money to pay for most of the construction is critical to get people onboard, she said.

“[Broadband] is just as important as roads, but there are a lot of competing interests at the ballot box,” she said. .. “You’re never going to get there in most towns if you tax the residents.“

Correction: The conservative Maine Policy Institute did not directly oppose a municipal broadband vote in Leeds, but it did so through a sister group.