In surprise sale, NY firm acquires company that runs part of Maine’s broadband network

In a surprise move, the operator of Maine’s statewide fiber-optic network that connects rural communities to the internet’s core infrastructure has been acquired by an out-of-state company, raising concerns among some users.

Maine Fiber Co., which owns and operates Maine’s high-speed internet backbone known as the Three Ring Binder, has been acquired by Albany, New York-based fiber-optic network operator FirstLight Fiber for an undisclosed sum, the two companies announced Thursday. The network was built mainly with federal stimulus funds to lay the foundation for internet service in underserved parts of the state. Maine Fiber oversees that network, including access via lease arrangements.

One longtime Three Ring Binder customer, Houlton-based Pioneer Broadband, appeared unsettled by news of the acquisition.

“Without all of the information yet in hand, I will say that I am concerned about this acquisition,” company CEO Tim McAfee said. “I have nothing against FirstLight, and I am sure this is an exciting opportunity for them, but frankly they may compete with us in some markets, and that is the part that makes me uncomfortable.”

McAfee said that because FirstLight is also an internet service provider, he has concerns that it may not be as impartial as Maine Fiber was in responding to customers’ network issues.

“Now that the owner has traffic on the network, the restoration effort prioritization will always be their services first,” he said. “That makes sense because they own it, but it may be unsettling for the rest of the customers affected by an issue.”

Another major customer – internet service provider GWI of Biddeford – said it received no advance notice of the sale, but that it was too early to tell whether the ownership change would have a significant impact on Maine’s ongoing efforts to bring broadband services to rural communities. GWI said FirstLight is an established company with a good reputation in the broadband industry.

Maine officials also appeared to be caught off guard by news of the acquisition.

“The Department of Economic and Community Development plans to engage with FirstLight immediately to learn more about their intent in the wake of this acquisition,” DECD Commissioner Heather Johnson said in an emailed response to a Press Herald inquiry. “We firmly believe (an) open-access middle mile is imperative to competitive broadband expansion and the growth of the Maine economy.”

The so-called “middle mile” is the trunk line that connects anchor institutions such as the University of Maine campuses, as well as the internet service providers that sell bandwidth to individual customers.

Johnson said the department did not know whether there is any statute, rule or regulation requiring FirstLight to abide by the same open-access policies as its predecessor.

“We are still reviewing the details of the acquisition and working to determine this,” she said.

Maine consistently ranks among the bottom of U.S. states for access to high-speed internet. Better broadband service was a campaign pledge by Gov. Janet Mills.

The Three Ring Binder is named for the three rings of fiber-optic networks that circle through western, eastern and northern Maine. It is considered a vital communications link between rural communities and the rest of the world. However, some internet service providers have complained that a sparsity of connection points, or “off-ramps,” from the network make it prohibitively expensive to connect homes in some areas.

OPEN AND EQUAL ACCESS

Completed in 2012, the $31.7 million fiber-optic network loops through more than 100 communities, spanning 110,000 households, 600 schools, libraries and other institutions, and 38 government facilities. Funded largely by federal economic stimulus funds, the three rings provide Maine with a direct high-speed link to Boston and Halifax, Nova Scotia.

Under rules designed to encourage competition that were established at the time the federal grant was issued, the network would be open to all potential customers, and no single entity could use more than 20 percent of any segment of the Three Ring Binder. Maine Fiber’s website underscores its impartiality, saying the network “is available to all qualified users on an equal basis.”

“They (the rules) are set in a grand agreement between the federal government and all the stakeholders that were involved at that time,” GWI Chief Operating Officer Kerem Durdag said. “That’s obviously survived the last decade and it should continue to survive. I’m sure that FirstLight has read through those … and is on board with them. I hope they are, and I’m sure they are.”

GWI, Otelco, Pioneer Broadband and Axiom Technologies are among the rural internet service providers that lease space on the network.

The new owner did not specify what impact, if any, the sale will have on the network’s management and terms of usage. Calls to FirstLight’s public relations firm were not returned.

Maine Fiber was formed in 2010 as a private company unaffiliated with any telecommunications carrier to oversee the Three Ring Binder’s construction, and to maintain and lease portions of the network to local internet service providers and other customers. The company’s CEO, Dwight Allison III, said in a statement that the acquisition by FirstLight is good news for Maine communities.

“We are excited about the possibilities this transaction creates for our customers, employees and key stakeholders,” Allison said. “Over the past 10 years, we have built a … network in areas throughout the state of Maine that were historically underserved. Now as part of FirstLight, a larger network of dark fiber is available to help us realize our mission of providing our customers access to a quality broadband network.”

FirstLight was founded in 1999 and has been building and operating its own fiber-optic network for nearly 20 years. Its customers include national telecommunications providers, health care organizations, high-tech manufacturing and research facilities, financial institutions, colleges and universities, K-12 schools and public safety agencies, as well as local and state governments.

“Acquiring (Maine Fiber) is very exciting for FirstLight. We have a longstanding, positive working relationship with this organization and are impressed with what they have been able to accomplish since the company’s inception. …” Kurt Van Wagenen, president and CEO of FirstLight, said in a statement about the acquisition. “The companies have leveraged their strong ties over the years to expand broadband access to customers in Maine and beyond. We expect the integration process will be swift and seamless to our customers and stakeholders.”

The Three Ring Binder has roughly 185,000 “strand miles,” the total length of all its fiber-optic strands, strung above ground along roughly 29,000 utility poles. Its construction was funded by a $25.4 million federal economic stimulus grant, as well as $7.4 million in private investment from about 75 individual investors.