New Insurance Option for Municipally-Owned Networks through PURMA
Help for Broadband Utility Districts (BUDs)
Broadband Utility Districts (BUDs) provide an ownership model that plays a critical role in helping enable regional scale impact for improved connectivity and digital equity in Maine.
What are BUDs?​
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Broadband Utility Districts, also known as BUDs, are community-based organizations formed to build and operate broadband networks to increase access to high-speed internet. The districts often partner with service providers to operate the network, while the communities in the districts own the internet infrastructure. These quasi-municipal districts are independent of town government and have an elected or appointed board. They can receive grants, and borrow and finance the development of publicly owned broadband networks.
MCA Contact
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Kendra Jo Grindle, Director, Community Strategy
kgrindle@maineconnectivity.org | (207) 370-0160
Challenges Facing BUDs​
To date, funding and policy in Maine have not explicitly supported publicly owned regional-scale operating models that take shape through a BUD. Several early-stage BUDs have received planning funds, and in 2022 MCA provided funding for the expansion of the State’s only currently operational broadband utility district (Downeast Broadband Utility) to add two additional towns to its existing four-town network.
It is clear that there are structural constraints that limit the expansion of BUDs throughout the state, either through existing MCA programs, or otherwise. Some of the barriers facing BUDs include:
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Access to capital: Matching funds, low-cost capital, credit enhancements, loan guarantees, grants, etc.
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Legal guidance: Bond Counsel, development of interlocal agreements, contract support, reporting compliance, utility pole license agreements, make ready management etc.) once grants are awarded.
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Technical Design: to support operating model and ISP plant use and enable service diversification
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Organizational Capacity: management, succession, etc.
What is MCA Doing?
The Maine Connectivity Authority is developing a strategy to engage critical stakeholders, deploy targeted technical assistance, and craft appropriate funding programs that can help BUDs fulfill their potential as a key way to enable regional scale impact for improved connectivity and digital equity in Maine. In partnership with FAME, the Maine Municipal Bond Bank, and other partners, MCA will be undertaking an engagement process as we develop the following offerings:
Enagement & Coordination
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Dedicated staff time to support BUD programming and ensure ongoing information sharing
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Develop (or expand) an ongoing forum for a round table of public ownership practitioners to meet regularly as a way to build consistent, proactive communication and solution-oriented conversation.
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Create networked learning opportunities with established utility districts operating in similar rural locales across the US to ensure best practices are being implemented in Maine and lessons learned are shared and known in advance.
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Proposed BUD track at the annual MBC hosted Maine Broadband Summit and produced by MCA to ensure relevant offerings for those active in the BUD model.
Technical Assistance
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Legal templates for interlocal agreements, incorporation documents and process for utility districts, by-laws and operating standards, operation contracts
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Business modeling and financial projections for viability and long-term customer retention
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Organizational development support to include succession and sustainability planning to ensure long-term leadership management
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Technical review and modeling of potential value-added markets leveraging deep fiber deployment in rural Maine regions such as mobile enhancements
Financing
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Identify a method to address the financing gap and needs of utility districts as a primary objective of MCA’s Broadband Infrastructure Capital Markets Taskforce kicking off in February 2023
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Host a dedicated financing workshop in partnership with FAME and MMBB to reflect on challenges, convey key learning and consider opportunities
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As an outcome of the workshop described above, MCA and FAME will develop a pilot BUD insurance/guarantee program
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Public Utilities Risk Management Association (PURMA) is a nonprofit organization focused on providing risk management services, education, training, and policy procurement on behalf of public utilities and utility cooperatives in the Northeast. They have members who are operating publicly-owned broadband networks and are already starting to partner with some Maine municipally-owned broadband networks.
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MCA worked closely with Senator Grohoski in 2023 to pass LD 1223, providing a path for standardized liability insurance amounts for pole attachers and for pooled insurance offerings for publicly owned networks. The Town of Somerville found an established entity working in the utility space, PURMA, which has come forward seeking to help Maine expand broadband statewide by filling this necessary coverage gap for Maine towns. MCA worked with the Maine Bureau of Insurance and PURMA to ensure a timely approval of their application to write policies in Maine
Resources for Broadband Utility Districts
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The Community Broadband Planning Support Program includes resources and assistance for communities that have chosen the operational structure of a Broadband Utility District in order to expand broadband service availability. ConnectMaine prioritizes assistance to communities that meet the following requirements:
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At least four municipalities or local governments have undertaken the Community-Driven Broadband Planning Process;
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Local government leaders have approved efforts to form a BUD;
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There's commitment that the BUD will take on the responsibility of digital equity and inclusion, including efforts to connect customers to the Affordable Connectivity Program or similar opportunities; and
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There's commitment to a broadband solution that will result in broadband service availability--service offerings will include 100mbps/100mbps at least.
Resources
State statutes allow organization and interlocal cooperation to establish a utility district for broadband services and issue revenue bonds.
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Interlocal agreement template (coming soon)
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Interlocal agreement example (pdf) and example2 (pdf) and example3 (pdf)
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Filing agreement with Secretary of State (coming soon)
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Example of warrant article for revenue bond (coming soon)
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Example of financial statements for revenue bond (coming soon)
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Assistance
For communities that have decided to establish and use a Broadband Utility District to expand broadband availability, ConnectMaine staff will coordinate outreach for technical assistance needed.
