LICT Corp. announced in its second quarter earnings report released Friday that it has completed its spinoff of Michigan Broadband on August 31. The spinoff company is now known as MachTen Inc.
Each LICT shareholder received 150 shares of MachTen per single share of LICT. Plans call for LICT to maintain a 19% stake in MachTen. The company also said that “the Michigan operations declared a $15 million dividend due to LICT.”
LICT, a rural broadband consolidator with operations in several states, also said it has withdrawn from the Rural Digital Opportunity Fund (RDOF) program due to “substantial cost increases and other significant changes within the organization since we first participated and won in the RDOF public auction.”
Those wins were for LICT’s Cuba City and Cal-Ore Communications units.
MachTen Spinoff
Michigan Broadband (now MachTen) was founded in 1908 as Upper Peninsula Telephone Company (UPTC) and incorporated in 1927 as Wallace Telephone Company. It was acquired by LICT in 1996.
The company is based in Traverse City and operates as UPTC and Michigan Central Broadband Company (MCBC) within the state of Michigan, where it provides broadband and voice services to 19 local exchanges (15 in the Upper Peninsula and four in the Lower Peninsula). It covers about 3,500 square miles and owns more than 700 miles of fiber.
Enhanced A-CAM and More
All LICT telephone companies participate in the FCC A-CAM and A-CAM II programs, according to an earnings press release. These programs cover some of the costs of making communications services available in high-cost rural areas.
The FCC recently made new funding offers to providers that receive high-cost support through a new initiative known as Enhanced A-CAM. The new offers are based on deploying higher-speed service. Carriers have until Oct. 1 to decide whether to accept the offers. Those that do will get additional funding and more time to complete deployments.
According to LICT, it is currently analyzing whether to accept the Enhanced A-CAM offers on a state-by-state basis.
LICT also noted that it was awarded grants totaling $157.5 million for fiber deployments in New Mexico, Kansas and California through the U.S. Department of Agriculture (USDA) ReConnect III and ReConnect IV programs. Total project costs for these deployments are $171 million. These figures do not include three grants that were awarded to the company’s Michigan operations.
As of June 30, 2023, LICT owned and operated 6,864 miles of fiber, 11,164 miles of copper cabling, 942 miles of coaxial cable and 87 towers, according to the company.
