Maine Town Unintentionally Spotlights the Folly of State-Funded Providers

By Nathan Seibert

As private broadband service progresses up to rural parts of Maine, an ironic story emerged from the town of Arrowsic. In 2020, the town formed a government-owned network (GON) called Arrowsic Broadband Authority in an attempt to provide service when no private providers offered coverage in the area.

The town, population 500, waited four years after its founding to finally receive service at an individual rate of $49.99 per month. The project was long and drained $1 million in federal and private funding but eventually delivered mediocre service at a rate that wouldn’t be competitive anywhere with private providers. The government-funded Broadband Authority functioned for about a year with the comfort of knowing they beat out the alternative of no coverage at all.

That is until this spring, when residents were contacted by Fidium. Fidium is a small broadband provider with rates significantly lower than Arrowsic Broadband Authority’s, undercutting the state-funded option. Fidium will offer the townspeople $30 a month rates in the next month. Arrowsic Broadband Authority is such a small scale provider that Fidium’s rates pose a massive risk not just for the Arrowsic Broadband Authority, but for the town government that will be forced to prop them up. While the town government has no apparent debt from the project, Arrowsic Broadband Authority may be unable to fulfill utility and storm damages unless local government steps in and supplies reserves.

Humorously, the town is reportedly begging residents to keep their more expensive service to prop up the local GON. Well-intentioned government projects only go so far, and banking on private providers to lag on coverage was a foolish business strategy.

No matter how much the people of the town might have attachment to their homegrown Arrowsic Broadband Authority, at the end of the day consumers are destined to pick the cheaper, better quality service. This project had projections showing eventual revenue to the township if customers stayed on. The project relied on federal funding to initiate service, reducing liability on the local government. However, the future costs to the town are substantial with private competition. Additionally, Fidium already has the infrastructure to roll out service, owning all the telephone poles in the area. Realistically, Fidium will expand their service and provide better deals to the townsfolk as a matter of course. Meanwhile Arrowsic Broadband Authority will likely either be crushed, or fight a long and painful losing battle.

State-sponsored broadband providers are just illogical with the expansion of coverage seen today. Short term solutions like this that take significant investment fail to benefit anyone in the long run. It’s likely the pragmatic residents of Arrowsic will switch to Fidium in the coming months. It’s time government moves away from feel good “investments” like this and stops betting against the private sector.