Baileyville Experiences Low Take-Rate of Broadband

 

Ricky Cleghorn

Downeast Broadband Utility (DBU) is the first and only municipally-owned internet broadband utility in the State of Maine. It’s a one-of-the-kind network, and it is entirely owned by the residents of Calais, Baileyville, Alexander, Indian Township, and now Princeton. Essentially, DBU is a system of fiber-optic wires that different service providers can lease to offer consumers broadband coverage. 

According to Tim Call, Baileyville Town Councilor, the two municipalities of Baileyville and Calais decided to take out joint loans to build a municipal broadband system because there was no company willing to build a system for the area. 

“No one was going to cover this town, so Baileyville and Calais put this together for everyone to have. Neither Spectrum nor Consolidated, or any other company, was willing to come out here,” Call said.

Baileyville and Calais both managed to secure loans to build the system and to find a service operator. Baileyville took out a loan of $1.3 million and Calais took out a loan of $1.7 million, both from First National Bank. The Town of Baileyville and the City of Calais took out a loan together equaling roughly $3 million to build this system, per Call.

However, Call said that the town is experiencing a low subscription rate, or take-rate, to Pioneer Broadband, the only current service provider through the DBU network amongst its population. While he declined to comment with exact numbers, he did offer a rough estimate. 

“Baileyville, relative to Calais and Township, is on the low-side of the take rate of this enterprise. Almost every resident of Indian Township is signed up with Pioneer Broadband through our utility–something like 98 percent to 100 percent. Calais is a bit lower than that, and Calais is doing way better than Baileyville, in terms of take-rate.”

More importantly, he added, the repayment time for the loan directly correlates to the amount of people that sign up to Pioneer through the municipally-owned system.  

“The more people that sign up, the faster that we can repay back the loan. Right now, at the current take-rate amongst our town, we’re looking at a repayment time of about, very roughly, a decade. If the take-rate increased to the levels that we want to see, we could repay the loan back in three to five years.”

In the opinion of Call, one of the most important things for residents to keep in mind when considering signing up for broadband is that a large portion of the money is reinvested back into the town.

“The biggest, most important things to remember–the citizens own this system. Buying into it is buying into the town. Roughly 35 percent of that $60 monthly fee goes right back into the town, and once the loan is repaid, you’ll start to see the community grow. Better resources for education, facilities for recreation and for the kids, more police officers and equipment. This is a community effort.”

Call also sees fiber optic connection becoming more and more prevalent in our increasingly-online society.

“And this stuff is the future, cable wire will become obsolete in the next ten years, and it’ll all be streaming. Choosing to make that switch to fiber optic through our utility is simply just preparing for the future while supporting the town.”

One can learn more about Downeast Broadband Utility at downeastbroadband.com and about Pioneer Broadband and its pricing at pioneerbroadband.net.  

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