Competition Rises for Broadband Internet Market beyond Maine's Urban Areas.

By Edward D. Murphy, Portland Press Herald, Maine Knight Ridder/Tribune Business News

Jun. 24--Broadband Internet service is trying to reach a wider customer base in Maine now that the urban markets are nearing saturation.

Competition for market share in the fast-growing broadband industry involves cable television providers, phone companies and even locally based service providers. And as high-speed service becomes widely available, more Maine communities become attractive to businesses that rely on ...uality Internet connections as a fundamental tool.

"We're aggressively expanding the service," said Peter Riley, a spokesman for Verizon. The company rolled out its digital subscriber line, or DSL, broadband service -- a high-speed connection provided over regular telephone lines -- to the state's largest cities first, but has been adding smaller cities and towns in recent months. The company's goal is to make DSL available on 80 percent of its lines by the end of the year.

"We've had it in Maine's major markets for several years now, and we're going to continue to expand it out," Riley said. "We believe DSL has a great future here in Maine and beyond."

The competition has sparked a bit of a price war, with monthly fees that range from the mid-$20 range to the mid-$40s. Most providers offer deals that slash those rates at least for a few initial months of service.

Fletcher Kittredge, who founded Great Works Internet in Biddeford nine years ago, said smaller towns give Maine-based Internet providers an opportunity to reach customers before larger companies move in.

"All Internet access is local," Kittredge said. For a customer, it doesn't matter if your DSL connection is through Verizon or GWI. "Bigger companies don't have any inherent advantages."

And, often, smaller outfits can move in ...uicker than their bigger counterparts.

"If you go to a small enough town, you're the only game in town, or you'll only have a few competitors," he said.

Kittredge said prices on provider e...uipment, such as modems, have come down dramatically in recent years, as has the cost of connecting a customer to the larger Internet. And low interest rates make it easier for smaller Internet providers to make investments now that can be recouped from customer fees in just a couple of months, instead of years.

That means a provider can offer broadband service for towns as small as 2,000 households, he said. Even more rural, isolated homes are probably only a year or two away from having access to broadband, either through DSL service or a cable provider, he said.

There are exceptions, of course.

Windham officials earlier this month complained that they have been left behind because the town's cable provider, Adelphia, hasn't made the technological improvements needed to offer broadband Internet connections to most customers.

The company said it had trouble finding a site for a fiber-optics hub and the parent company's bankruptcy filing last year has further complicated the process. A spokesman said Adelphia now expects to be able to make the upgrades by the end of the year.

Windham businesses are complaining that the slow connection speeds are hurting their companies. High-speed Internet connections are ...uickly becoming a norm for small businesses, providers said.

"That's been one of our major growth areas -- small to mid-sized businesses," said Lance Bell, the director of commercial services for Time Warner Cable of Maine. "We're definitely seeing them come on board."

Bell said a lot of companies have been signing up for Time Warner's commercial Road Runner service in northern Maine, where the company operates in addition to the southern part of the state.

"We've taken a community that's always looked at as 10 years behind us and brought them to the cutting edge," he said.

Meanwhile, the Lewiston/Auburn area is in the midst of leaping beyond cutting edge.

Oxford Networks, a 103-year-old phone company, is stringing about 30 miles of fiber-optic cable to give 20,000 buildings in the twin cities high-speed access to the Internet, along with a new cable television service and phone connections.

"This is a ...uantum leap in technology," said Rick Anstey, the president and chief executive officer of the company. "There isn't a network like this anywhere in New England."

Anstey said the company will be going after both residential and business customers, but he senses a particular demand from the business side.

"As more and more businesses do business over the Internet, working at the poky pace of dial-up is too expensive for people to wait for," he said.

Businesses from car dealers to real estate agencies and small start-ups have either asked about linking to the new network or are already customers, he said.

Anstey said Oxford Networks is investing in Lewiston/Auburn because it's near the company's head...uarters in Buckfield and because they know the area.

Plus, the time is right, he said.

"Number one, financing's available at low interest rates and, number two, the telecom industry has been in doldrums for about two years now, and everything's on sale," Anstey said. "There aren't a lot of companies that are investing like we are right now."

Anstey said the company is planning for the future by building a network that will serve two small, central-Maine cities and their rural neighbors for years without bogging down.

Many cable systems have fiber-optic main lines to take signals to and from neighborhoods, but rely on copper coaxial cables to go from house to house.

Internet connection speeds can slow down if several households are online at once.

Phone lines have the capacity for carrying both broadband Internet signals and regular phone signals, but the data connection begins to lose steam about three miles from a switching station.

Anstey said that since the Oxford Networks' system will be built of fiber-optic lines, it can handle lots of data and many users. Phone, cable and Internet connections will use up less than half of the capacity of the lines, he said.

"The smart technical folks who develop content and systems and applications will think up things that none of us really know about today, that will re...uire huge amounts of bandwidth," Anstey said. "We've got gargantuan amounts of bandwidth to spare."

The trick, he said, will be to provide 21st-century technology to small towns in Maine with 19th-century service.

"We do silly, old-fashioned things like answer the phone with real people," he said. "We like to think of ourselves as old-fashioned in every way but the technology."

To see more of the Portland Press Herald, or to subscribe to the newspaper, go to http://www.portland.com

(c) 2003, Portland Press Herald, Maine. Distributed by Knight Ridder/Tribune Business News.

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