STATE OF MAINE et al.
BIDDEFORD INTERNET CORPORATION
P. Silk, Esq., Benjamin M. Leoni, Esq. (orally), and Rebecca
Gray Klotzle, Esq., Curtis Thaxter LLC, Portland, for
appellant Biddeford Internet Corporation.
T. Mills, Attorney General, and Thomas A. Knowlton, Asst.
Atty. Gen. (orally), Office of the Attorney General, Augusta,
for cross-appellants State of Maine and ConnectME Authority.
SAUFLEY C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and
Biddeford Internet Corporation, doing business as Great Works
Internet (GWI), appeals, and the State of Maine and the
ConnectME Authority cross-appeal, from an amended judgment
entered in the Business and Consumer Docket [Horton,
J.) awarding the State and the Authority $406, 852 in
unpaid fees pursuant to 35-A M.R.S. § 9216
(2014). On appeal, all parties argue that the
court erred by concluding that the section 9216 assessment
was a valid business excise tax. GWI contends that the
assessment constitutes either an invalid business excise tax
or an unconstitutional property tax. The State and the
Authority contend that the assessment is not a tax but rather
a fee. We agree with the State and the Authority
that the Legislature properly characterized this assessment
as a fee, and, with that clarification, we affirm the
After a non-jury trial, the court made the following
findings, which are supported by competent evidence in the
The Legislature established the Authority "to stimulate
investment in advanced communications technology
infrastructure" and to expand the availability of
broadband service in unserved or underserved areas in Maine.
P.L. 2005, ch. 665, § 3 (effective Aug. 23, 2006)
(codified at 35-A M.R.S. § 9203 (2014)); see
also 35-A M.R.S. §§ 9202, 9202-A, 9204
In 2009, private telecommunications service providers began
meeting with representatives of the State, including the
Authority, to address the lack of broadband capacity in
Maine. Broadband involves the transmission of data-generally
associated with the internet-through both fiber optic and
digital subscriber line (DSL) technology, among other means.
Fiber optic transmission is currently the fastest means of
data transmission and is accomplished via optical fiber
cable, which is essentially a group of plastic or glass
strands that can carry light pulses to transmit data. The
term "dark fiber" applies to the unlit fiber optic
strands within a cable. Dark fiber providers lease or sell
strands of dark fiber to telecommunications service providers
who then use, "light, " the strands to transmit
data for their customers.
During the meetings involving the State, the Authority, and
private telecommunications service providers, an initiative,
called the "Three Ring Binder, " was developed to
serve as a new route for fiber optic cable in unserved and
underserved areas. The purpose of the project was to put dark
fiber in areas where there was no dark fiber at all.
GWI, one of the telecommunications service providers that
participated in the meetings, applied for a federal grant to
subsidize construction of the Three Ring Binder. The
application required GWI to assign the project to a new
entity, Maine Fiber Company, Inc., that would own the Three
Ring Binder and be responsible for its construction. Maine
Fiber would make the Three Ring Binder available on an
"open access" basis so that any telecommunications
service provider could purchase or lease dark fiber to extend
service to its residential or business customers.
The grant was approved in December 2009 in the amount of $25,
402, 904. The grant required GWI to transfer the
right to receive the funds to Maine Fiber and required Maine
Fiber to complete construction of the Three Ring Binder
within three years. Maine Fiber now holds title to the Three
Ring Binder, which was completed in 2012, and is a "dark
fiber provider" within the meaning of 35-A M.R.S. §
102(4-A) (2014) and section 9216.
When Maine Fiber was created, it lacked legal authority to
attach dark fiber and equipment to utility poles that were
owned by other entities and to construct the Three Ring
Binder within public rights of way. Because of the narrow
timeline for completion of the project, emergency legislation
was introduced to provide Maine Fiber the necessary authority
to build the Three Ring Binder. See L.D. 1778 (124th
In February 2010, the Legislature held a public hearing at
which GWI, Maine Fiber, and the Authority testified in favor
of L.D. 1778. FairPoint Communications, the largest provider
of dark fiber and telephone service in Maine, opposed the
legislation, asserting that the Three Ring Binder would
overbuild the existing ...