Category Archives: Events

Just a reminder that the Government Competition and Privatization Subcommittee will be meeting this Thursday, October 25, at 9AM to discuss possible legislation in the upcoming session of the legislature. Proposals include creating a standing commission to oversee potential government competition with private entities, up the reporting requirements for local governments and potentially limit UTOPIA membership yet again. This is probably going to be the last meeting of this subcommittee for the year so it will be critically important that as many of us as possible attend this meeting to head off bad legislation before it gets to the general session.

Hope to see a bunch of you there! 

The Government Competition and Privatization Subcommittee to be held on October 15th has been canceled. The meeting for October 25th is still scheduled from 9AM to 3PM. As usual, I'll be in attendance and liveblog the whole thing.

Sorry about the late entry, folks. Bad traffic and worse parking conspired to make me late today. I’ll be catching up as I can.

5:23PM Meeting is over!

5:21PM They’re planning on meeting on both the 15th and 25th at 9AM for all-day meetings. Mark those dates?

5:17PM I guess we’ll have to wait for Jerry Fenn. Qwest asked to speak at another meeting. Rep. Frank indicated that this might not be feasible.

5:16PM A representative from Qwest is now speaking during the comment period.

5:15PM Sen. Stephenson is claiming that the Spanish Fork network has had no economic effect. That seems to run counter to the anecdotal evidence currently being offered.

5:13PM An employee of Venture Data brought up that their company will be staying in Murray because of UTOPIA and that he knows plenty of people moving to UTOPIA cities because of the services. He also mentioned that Murray currently has three city council members running opposed. I guess that’s a heck of an endorsement, eh?

5:10PM Just got off the stand from my own public comment. I brought up the high costs associated with non-UTOPIA providers and the significant difference in pricing between UTOPIA and Comcast.

5:06PM Sen. Goodfellow caught Mr. Van Tassel off guard when pointing out that UTOPIA and iProvo aren’t retail operations as he alleges.

5:05PM A Mr. Van Tassel from the Utah Taxpayers Association is now commenting. As expected, he’s blowing serious smoke. Apparently he thinks that UTOPIA just can’t compete and they should have expected to be sued by Qwest, expected to be blocked from legal access to poles and expected to have significant delays in the RUS funds. That’s just plain crazy talk.

4:59PM Pete Ashdown has delivered some top-notch comments to the committee on the economic benefits of telecommunications networks.

4:57PM Qwest was a no-show for their spot. How about that.

4:56PM Sen. Stephenson was corrected again about financing that none of the funds secured by pledging can be used with non-pledging cities. Any of us who have actually read the white paper know that the non-pledging build out will be when the project goes “revenue positive” which is slated for 2012. Mr. Shaw also specified that no construction of capitalization has happened in non-pledging cities. I have this suspicion that certain members of this committee haven’t read even the basic documents concerning UTOPIA. Their portion of the meeting is now complete.

4:53PM Sen. Stephenson has been bringing up comparisons between the system in Bristol VA and UTOPIA. Mr. Shaw rightly reminded the Senator that UTOPIA is a wholesale model whereas Bristol uses a retail model. He also reminded Sen. Stephenson that UTOPIA has been meeting its milestones. Mr. Black also interjected that some neighborhoods have take rates as high as 65%, much greater than the system-wise 18%.

4:47PM Mr. Baller points out that online services are moving towards video and other high-bandwidth applications that only fiber can supply.

4:42PM Sen. Stephenson is demanding when to see results that differentiate UTOPIA cities from non-UTOPIA cities and wants to know when that will be. (I use demanding because that was a rather harsh tone to use during questioning.) He’s being a bit rude too. I think he’s trying to reverse the good fortunes this presentation has already enjoyed. Mr. Baller won’t take that bait and predicts we’ll see substantial differences within 3-5 years. Maybe Sen. Stephenson needs to talk to a real estate agent and ask how many of their clients ask about UTOPIA and how many clients ask for a home builder, I recommend hom to talk to a mls vancouver agent they are the best.

4:38PM What? Senator, are you serious? Sen. Stephenson is suggesting that universal service is not that big of a deal. What the deuce?

4:36PM Sen. Stephenson asked why a public network is required when there’s more capital now than there was during the time that electricity was being rolled out. Mr. Baller has responded pretty thoroughly that the amount of private funds required to build an adequate network has too long of a payback for most investors with that kind of money. See the 10-15 year payback figure on most such systems.

4:30PM Mr. Baller did a great job repsonding and detailing how the promises of the Act of 1996 have failed to be delivered on.

4:27PM Rep. Cosgrave is now asking some great questions concerning the $200B cop-out under the Telecommunications Act of 1996, in particular how legislation with such lofty goals has failed us so miserably. I can’t wait to see how Jerry Fenn, President of Qwest Utah, will respond to these same questions.

4:23PM Mr. Shaw makes the point that cities should be allowed to experiment and have not asked for anything from the state other than the ability to move forward on the decisions made by the city councils.

4:20PM Another good point. If local governments ask the private providers to provide a service and they refuse, then cities are justified in doing it themselves.

4:16PM The situation in Louisiana sounds very interesting. The governor told BellSouth (now AT&T), Cox and the city of Lafayette to sit down together and come up with a mutually-agreeable bill. As part of that, the incumbents had to justify every restriction and demonstrate that they had the same restrictions. That’s a great way to get their input and ensure that capricious requirements aren’t put into the bill.

4:12PM Mr. Baller makes a great point that cities should be free to determine what they want to do with their telecommunications infrastructure. Interestingly enough, Verizon is looking at abandoning most of New England because they don’t feel it’ll be profitable enough when they roll out FIOS. As a side note, I’ve been informed that Roger Black is now semi-retired and teaching part-time in Cedar City.

4:09PM Sen. Niederhauser seems to support UTOPIA only in rural areas where private companies won’t go. That’s a big mistake. Cities also need the higher speeds offered by UTOPIA in order to retain jobs and stay competitive as well.

4:04PM David Shaw has clarified that the big difference between tax-funded networks in other states and countries and UTOPIA is that UTOPIA has only planned to use tax revenue in a worst-case scenario and clarified that cities are not entirely on the hook for the full bond amount. He also clarified that UTOPIA is not intended to be a profit-maker. That’s consistent with how they plan to build out in non-pledging cities in the future. After all, that money has to come from somewhere, right?

3:58PM It sounds like this presentation is allaying the financial fears of at least Rep. Morley. Rep. Frank asked how options in other nations were financed. Mr. Baller explained that the national governments there had stepped in to work with local governments and businesses to build them. These publicly financed systems were also required to be open systems.

3:51PM Roger Black mentioned that the private partners failed to deliver the expected marketing, AT&T in particular. He praises the other members of UTOPIA though mentions that they had to operate at a disadvantage since AT&T didn’t spread the UTOPIA publicity as expected.

3:48PM UTOPIA expects to be at a break even by 2008 and profitable by 2012 as mentioned earlier. Mr/ Shaw clarified that monies paid by the cities are put into an i
nterest-bearing account as a reserve fund and that pledge amounts have not changed at all. He also clarified that “externalities” refers to the delays caused by the RUS grants, attaining federally-guaranteed pole space and the Qwest lawsuit. In other words, a lot of this is incumbent obstructionism. Typical.

3:45PM Rep. Morley asked what the new break-even point will be for UTOPIA in light of how long private projects often take to achieve this point. David Shaw jumped in to answer. As a side note, apparently Roger Black is no longer COO and is now a consultant for UTOPIA. Huh.

3:40PM I’m glad that Mr. Baller is showing how a comparison of WiFi and fiber is comparing apples and oranges. Trying to claim that wireless projects are representative of fiber projects is just plain dumb.

3:33PM Oh wow. Financial analysts say that private broadband systems take a good 10-15 years to achieve profitability. Compare that to a projected break-even for UTOPIA within 5 years of inception. Huh. How about that? Private companies are basically raiding the other divisions to sink money into their money-losing systems resulting in higher phone, cable and cellular rates. How many subscribers would like to have their rates lowered instead of subsidizing the construction of their new sub-par networks? That’s what I thought.

3:27PM Ouch. Jim, good show. He’s demonstrating that when using accepted accounting methods from the private sector, almost all of the projects Titch criticizes are actually financially sound. I guess that journalism degree didn’t grant him any accounting skills. Titch’s figures also don’t take into account the net effect of such systems. Example? Bristol, VA built a fiber optic network that revitalized the town after a major failure of the agriculture and coal industries. Now the town is a significant player in the tech world. Maybe we’ll see the next Durham, NC on our hands?

3:22PM Spot on! You can’t expect any project to be immediately profitable and the incumbents cross-subsidize network construction from cash cow sectors like phone and TV services.

3:20PM It’s true. Municipal networks are used for everything from law enforcement to traffic control to economic development. Mr. Baller is doing a great job deconstructing the snow job that Mr. Titch pulled out last time. He’s going for the throat too, citing a significant number of factual errors and a bunch of obvious bias in the paper. I’m glad to hear that pay-for-play hack being taken to task.

3:17PM No surprise here. Qwest solicited data from UTOPIA for the purpose of spinning the numbers, not opening up some kind of meaningful dialog.

3:16PM Baller, not Ballard. Thanks to Cory from PacketFront (used to be DynamicCity) for the correction.

3:13PM How right you are. Qwest won’t offer anything higher than 7Mbps. Honk Kong won’t offer lower than 25Mbps. How’s that for a comparison?

3:11PM And now we have some data on Utah’s rankings. Our average is 499Kbps, significantly lower than the national average and much more so than most other first-world countries.

3:10PM The population density myth has just been shot down by comparing us to other countries. I mean, seriously, trying to claim that Canada is more densely populated than the US? What? He also brought up that dense cities like New York, Chicago, Boston and Los Angeles have no broadband options comparable to Seoul or Tokyo even though the population densities are similar.

3:07PM Mr. Ballard presented good data on how we pay 20x as much per megabit while enjoying about 1/10 the maximum speed.

3:05PM I’m going to nickname this guy The Burninator. He brought up the failed presidential promise to improve access and speeds in the broadband market by this year. Of course, it ended up being an empty campaign promise.

3:03PM The visual representations should help legislators realize that the services currently offered by Qwest and Comcast are not only insufficient for our needs but nowhere near competitive internationally. He also pointed out that the UTOPIA and iProvo infrastructures can easily support the move to 100Mbps and 1Gbps with simple electronics swaps but the incumbents will have to scrap and rebuild.

3:00PM Burn again! Mr. Ballard brought up the terrible statistical reporting of broadband by ZIP Code and the potential for new requirements to use ZIP+4 in the future.

2:59PM Ooo, burn. Now we find that the FCC used to have broadband at 200Kbps bi-directional. They created the new “high speed” designation so that cable companies could scrimp on us and provide only a 128Kbps upstream. That’s in addition to the drop from 45Mbps to 200Kbps.

2:54PM Great follow-up on how we’ve been falling behind internationally in terms of available broadband. It’s also a good point to raise that broadband positions us to be in a position to capitalize on future knowledge-based jobs.

2:50PM Apparently Mr. Ballard’s research shows significant parallels between the early days of electrification and the current slow roll-outs of broadband systems. When communities weren’t getting served by the power companies, they built their own systems. The ones who didn’t build their own systems often went into recession and became ghost towns. There’s a scary story for you.

2:47PM Mr. Ballard has 15 years of experience working on municipal telecommunications project. He brought up that UTOPIA and iProvo have been models internationally for public-private cooperatives for next-generation telecommunications.

2:44PM A rep from UTOPIA will now be speaking. My bad on Steven Titch being here; Jim Ballard (?) looks a LOT like him.

2:41PM I don’t have a copy of these handouts so I can’t follow along with all of this data. I’ll see if I can snag some before I leave the capitol complex. Otherwise we’ll all have to wait until they get posted on the subcommittee website in a few weeks.

2:40PM There’s some data on the bonding in here. The $85M bond issued in 2004 was designed to be paid with some of the bond money through 2008 with a projection to have the bond debt taken over by subscriber revenues by 2009. There was a second bond in 2006 for $30M with a $37.6M bond in 2007 for the RUS grant.

2:36PM Now we have data on the projections. The original break even was 2006 and has been pushed back to 2008. This is about the amount of time they had to wait for the RUS grant. The positive cash flow was originally projected in 2009 and is now projected for 2012. Again, credit the slow-moving feds and their grant processes. Annual revenues have been increasing steadily based on figures from 2005-2007. Net income has been decreasing (from $10.7M this year to $17M next year), but that’s no surprise as they ramp up construction in more cities.

2:32PM Well… that was totally softball. It skipped over the scam that the teclos pulled on us. Now there’s a report on UTOPIA financials.

2:28PM Mr. Elder is quoting from a FCC report in 2004 saying that 200K broadband was being deployed in a “reasonable” manner. As to how it’s reasonable to redefine broadband from 45Mbps to 200Kbps and call it a win is beyond me.

2:24PM Hey Qwest? Didja hear that part about providing universal service to rural areas? Just how many rural areas can get DSL? That’s what I thought.

2:22PM Sweet! There’s a present
ation of the Telecommunications Act of 1996 as requested by “members of the committee.” I imagine this has to do with the data I sent to Rep. Cosgrave last time. This should make Qwest sweat during their later testimony.

2:20PM The meeting now moves on to broadband policy again. Staffer Leif Elder will be presenting.

2:18PM Wow. Actual private citizen comment. Who’d have thunk it? She’s pushing for further study to make sure that public buildings aren’t trying to supplant private meeting halls and the like.

2:12PM This is going to be a pretty short discussion. The subcommittee had no discussion on the topic. Roger Tew of ULCT clarified that many fees for using public buildings is often to just cover costs, not make money.

2:09PM Looks like they’re bumping that agenda item and will now discuss using public buildings for private functions. Sen. Stephenson will be speaking on this topic.

2:05PM The meeting will now focus on local government budgeting in relation to competition with the private sector. I just noticed that Steven Titch is here again though he’s not on the speaking schedule.

2:01PM Sen. Goodfellow just made a great funny. He asked Rep. Frank if he learned his upside-down skateboarding skills because of his membership at Gold’s Gym. I think only about a third of us here got the joke.

1:55PM Lincoln Schurtz from ULCT delivered a public comment questioning the bundling of a feasibility study and an impact on the private sector. He brought up that this could get our of hand and start encompassing core functions like police and fire.

1:49PM Whoa now. The discussion took a nasty turn and Sen. Stephenson is proposing to turn the interim subcommittee into a standing commission to police what areas municipalities can or cannot get involved in. This sounds like another effort at top-down rule in the state of Utah.

1:47PM There’s now some legislation on the table to tighten up the definition of core government functions. This is going to be one to watch as there could easily be something snuck in about telecommunications or other utilities.

1:40PM Sen. Jenkins is making a lot of good points on recreation centers, golf courses and pools. I fear, though, that they’ll be extended improperly to public utilities.

1:34PM Seems like the meeting started late like last time. All I missed was the call to order and approval of the minutes.

1:32PM Sen. Scott Jenkins is currently speaking on government competition with private entities. Right now the discussion is centered on golf courses.

The Government Competition and Privatization Subcommittee will be meeting Wednesday, September 26 at 1PM. A discussion on broadband will be held around 2:30PM that will include representatives from UTOPIA and Qwest. Given how stacked the presentation was last time around, it's critically important that as many of us as possible show up to use the public comments period to give our views on UTOPIA and municipal broadband policy. Like last time, I'll be liveblogging the event.

The committee is also scheduled to have a meeting on Monday, October 15 at 9AM. Though no agenda has yet been posted, I'm going to bet dollars to donuts that it includes more discussions about UTOPIA.

Now that the broadband portion of the meeting is over, I've got some overall thoughts on the presenters and some events after the close of the meeting. Continue reading →

Thanks to the free WiFi in the committee room, I'll be liveblogging the entire entire meeting. Check back for regular updates! I'll be here at least until noon or the break for lunch, whichever comes first.

12:44PM I got the chance to mention the $200B broadband scandal as a primary motivator for projects like UTOPIA. If Qwest won't deliver on their promises, nobody will. The meeting is now adjourned for lunch. That's all, folks!

12:40PM Sen. Stephenson asked how Qwest feels about cherry-picking. He seems to approve of the concept, but he's trying to characterize UTOPIA as seeking Qwest-style exclusive monopolies in greenfield areas. I suppose he'd know something about that, wouldn't he? He's now trying to claim that they're somehow more trustworthy because they don't promise universal service. What the?

12:37PM Sen. Niederhauser repeated his questions about the break even point of new installations. The Qwest rep revealed that they will never be able to provide 100% coverage because they won't fully serve expensive customers. The Senator then asks if they would be willing to run at a loss to deploy to those areas and the Qwest rep said no. Hmmm. What's the USF for, my friend?

12:34PM No joke that non-pledging cities could join without a lot of public hearings. There's no risk to taxpayers, so what's the harm in joining? Oh right… it's just to your out-moded business model.

12:32PM Whoa whoa whoa. Hold on there, chief. How can you claim that you know the difference in percentages between aerial and buried cable? It's also misleading to point out all of the places where projections have been wrong because, regardless of entity, projections have a tendency to do that. You also keep on repeating the same old "unfair competition" stuff. I'm beginning to think that you believe that all competition to your monopoly is unfair.

12:29PM Yep, more lies. He's claiming that cities have to keep on paying and paying to get nothing in return. He's also saying that, contrary to the opinion of every industry provider, that fiber may not still be viable in 20 years. Then he claims that copper will be more efficient to deliver new services? I have to wonder where this guy gets his bad data.

12:22PM Now I know what Slashdotted websites feel like! The rep from Qwest has been on the floor since about 12:08PM and has done nothing but speak angrily about how unfair it is that Qwest has to compete with UTOPIA. Maybe you should have thought of that prior to gorging yourself on the Telecommunications Act of 1996 and not delivering on your promises.

12:07PM Mr. Kroeber is now trying to claim that UTOPIA and iProvo have not influenced their pricing and promotions. Maybe then they can explain the $75 triple-play promotion the month before SB66 expired and new cities could join UTOPIA?

12:04PM Mr. Kroeber acknowledged that rural underserved areas are prime for projects like UTOPIA.

12:03PM Good question, Sen. Niederhauser. Which customers are considered to be non-viable? Mr. Kroeber dodged the questions by calling it a geographic limitation.

11:58AM Rep. Morley continued asking why it's better to build a competing parallel network and risk duplication. Instead of addressing the question generally, he kind of dodged it and called iProvo mismanaged.

11:55AM Rep. Morley asked for some clarification as to why they haven't joined UTOPIA or iProvo and building competing parallel networks. Mr. Kroeber claims that if they don't control the network, they can't provide an adequate level of customer service. You know, as opposed to the "excellent" service they currently offer. The one that takes 5 days for an installation and 30 minutes on hold to talk to a "technician" that reads from the book.

11:53AM I'm curious as to what exactly Comcast bought with that cool $1B they spent in the last decade to do system upgrades. It seems to have been spent improperly given that they can't come up with enough bandwidth. He said he has no data on breaking even in greenfield areas.

11:50AM Comcast claims they receive no subsidies. I'll buy that. I'm not aware of any government programs to ensure universal cable TV access. It might not be too long before they start asking for things like the USF, though.

11:49AM Sen. Niederhauser has asked what Comcast is planning on speeds, if they get any subsidies and how long it takes to break even in greenfields. Mr. Kroeber has responded that they have up to 12Mbps with PowerBoost and cites that products like that aren't available when they don't control the network in a vertical monopoly. That's hogwash. PowerBoost is little more than a QoS service that temporarily allows you to use extra bandwidth. I suspect your main motivation is to be able to do things like kill torrents at-will, a practice that's certainly illegal based on the method you're using to do it.

11:45AM ORLY Mr. Kroeber? There's no exclusive franchises in cities? You're just so good at what you do that nobody tries to compete with another cable system? It might not be de jure exclusive, but it is de facto exclusive.

11:43AM Comcast is on the record that they plan to never participate in a municipal broadband project.

11:42AM "Comcast operates in an increasingly competitive marketplace"? What? Really? Aren't your chief competitors the two satellite TV companies and whatever incumbent phone company happens to be around? How can you have no apples-to-apples competitors and claim a competitive environment? This is totally mind-blowing.

11:40AM Mr. Kroeber is talking up the channel lineup from Comcast, yet he doesn't mention that a lot of the channels coming down the pipe are at a significantly degraded quality due to their intense compression. He's also claiming that Internet speeds have "just scratched the surface", yet he can't tell me how he can grab 150Mbps from that 4Gbps coax when they're trying to cram a few hundred channels on it. Anyone recall that a HDTV signal weighs in at 80Mbps uncompressed? It's almost more FUD and spin than I can handle.

11:36AM The spin starts right from the gate. Comcast is now trying to claim that they've been making all of the investments that they promised to cities that skipped out on UTOPIA. Maybe they care to explain the looming bandwidth crunch they face?

11:35AM A rep from Comcast is up on the stand now. Steve Kroeber is the main rep speaking.

11:34AM It seems that Provo uses the fiber network to be preemptively notified in the case of power outages. That's much more efficient than having a few thousand people calling a hotline to report that their lights are out. Add that to the traffic control stuff that they've already been doing with the network.

11:32AM Mr. Garlick responded to some questions concerning the loans from the city's electrical utility. He clarified that both sides are accounted for separately and employees in both have their hours tracked accordingly to keep the numbers clean. It seems that the implication is that the electric utility is loaning labor to iProvo without accounting for it. I'm wondering how it is that allegations like this keep popping up without any sources cited.

11:28AM Sen. Niederhauser is asking questions on the subscriber numbers. Mr. Parker (I think?) is pointing out t
hat business subscribers produce more revenue than residential and that multi-dwelling units have a higher subscription rate. Single-family homes in Provo seem to be the chief laggards in getting service, probably because someone moving into an apartment has to pick a provider whereas homeowners generally stick with what they have.

11:25AM Rep. Garn is asking some pointed questions about economic development. He's trying to peg that mission as a failure since few to no new businesses have been attracted, yet neglects that many businesses have grown stronger with the network available.

11:19AM I just realized that Pete Ashdown is sitting in the front row. I shouldn't be surprised, but it sure is nice to see him here.

11:18AM Mr. Parker (I think? It's hard to tell who's who when you're looking at their backs when they introduce themselves) is pointing out some examples of how companies in Provo have been leveraging the high speeds provided by iProvo including medical imaging companies and some architectural firms. They also have a partnership with Novell that keeps the landmark tech company going strong. Apparently Novell found the iProvo speeds to be several times faster and promote better productivity.

11:15AM You know you're in Utah when a public official in a public committee meeting makes an analogy to LDS pioneer history.

11:13AM Provo city is now taking the hotseat. Wayne Parker and Kevin Garlick will be speaking.

11:12AM Sen. Stephenson has said that Cottonwood Heights has been trying to structure a plan in the city to build 50% of the city and not commit to building the other half until the first half makes money. That sounds like a mis-characterization to me and contrary to the mission of UTOPIA.

11:10AM The questions have been focused on the risk to the cities. It seems that Sen. Garn is proposing legislation to prevent participating cities from being asked for more money beyond their original pledge. That kind of law, however, could be easily construed to keep new cities from being pledging, something I'm sure that Qwest would be giddy for.

11:08AM Oh good grief. Members of the committee, they don't have financial data. It's not there right now. Stop asking questions that you know that he doesn't have the answers to. Mr. Shaw did clarify that cities will not be approached for repayment of the bonds expect as a last avenue citing the possibility of refinancing the bond as an intermediate step.

11:06AM Rep. Gosgrove asked how UTOPIA will stay abreast of the rapidly-changing technology in the market today and pointed out how telemedicine helped assist with diagnosing an illness his father had. Mr. Shaw pointed out that without a high-speed connection, compression could degrade the quality of the images and such compression is not required on higher-speed fiber networks.

11:01AM Sen. Niederhauser is asking why MSTAR didn't build their own network. Mr. Gould responded that he was unable to get exclusive franchise agreements like Qwest can and noted that MSTAR has been paying franchise fees and taxes. Sen. Niederhauser then tried to call UTOPIA a subsidized system. Mr. Gould fired back that zero taxpayer dollars have been spent and that the public phone and cable systems receive subsidies in the form of mandated fees and exclusive provider status. Mr. Gould compared the relationship between UTOPIA and the cities as someone getting a loan and a co-signer on the loan. That's a great analogy and describes the relationship perfectly.

10:55AM This puts the "greenfield" issue in perspective. Private developers often pay the entire cost of deploying the infrastructure to the developments. How is that a bad deal for consumers and residents of the cities?

10:53AM Wow. Good stuff. Mr. Gould is citing various government programs that build infrastructure for Qwest that amount to subsidies. Good way to preemptively nail the "unfair competition" card to the wall. Public subsidies indeed.

10:51AM Ben Gould, President of MSTAR, is now speaking.

10:50AM Whoa now, Senator. Accusing UTOPIA of cherry-picking services is pretty strong stuff. Mr. Shaw rebuffed the accusation and re-stated that pledging cities are top priority. He also pointed out that developers are the ones requesting deployment and helps only as much as they can without degredation of the deployment in other cities. Sen. Stephenson, maybe you should back off on this one. You did, after all, vote for SB 209 that would have allowed state-wide franchise agreements and significant cherry-picking by private companies. For shame!

10:44AM Sen. Stephenson asked about how ubiquitous the access will be and what the timetable will be for full deployment to pledging cities. Mr. Shaw specifically pointed out the USF that UTOPIA doesn't get to draw from like Qwest does when responding to Sen. Stephenson's questions. Apparently developers are the most interested in services to increase the value and sale price of homes in their developments.

10:42AM Mr. Shaw pointed out that UTOPIA is "big broadband" and that cable and DSL are "little broadband". Rep. Frank pointed out that he's been very happy with his cable modem, though I imagine that's because he hasn't seen the difference first hand.

10:39AM Rep. Frank has brought up the specter of increased taxes if UTOPIA doesn't break even. He also brought up problems with no public hearings. Mr. Shaw corrected him to note that 43 public hearings were held prior to the 11 pledging cities committing sales tax revenues. He also stated that public hearings are still required for new pledging cities.

10:35AM Mr. Shaw has cited that around 40,000 customers are currently in long-term contracts for television or Internet services, mainly in townhomes, condos and apartments. This restricts the ability to enroll new customers.

10:34AM The questions now have moved towards the RUS loans. Sen. Stephenson asked if our Congressional delegation has helped with the loan but Mr. Shaw doesn't have that data. Rep. Frank then asked why they didn't get RUS loans for Cedar Hills. Mr. Shaw pointed out that they, like Cedar City, are a non-pledging city and that pursuing funds for them would violate the original bond covenant. Don't you guys wish you'd ponied up now? You might be getting your systems for free and much sooner.

10:31AM Lindon apparently is almost complete and Payson will be next in line. Other RUS cities are underway at the moment. It almost makes me want to move to Utah County. Almost.

10:30AM Okay, I've confirmed that since 10:14AM, it's been Mr. Shaw speaking. UTOPIA doesn't have any financial reps here to answer these questions but they plan on providing the data.

10:29AM Sen. Niederhauser is now asking the questions. He got some data from the Utah Taxpayers Association that seems to be further misrepresentations citing the losses to date, asking when the break-even will occur. (I've decided that I have no idea who from UTOPIA is speaking. Blah.) The rep said that he doesn't have that kind of data at hand but that the project is on-track. The Senator then cited the figures of $4.6M in operating expenses with just under $1M in revenues. Again, that ignores that the costs to date are for the backbone, not endpoints. This also ignored the construction currently underway. The UTOPIA rep also addressed the issues of ubiquitous service citing that with the RUS loan, 6 of the 11 pledging members will have a full buil
d-out by early next year.

10:23AM Sen. Goodfellow brought up Monticello, a charter school in West Valley. They've got a 1Gbps connection from UTOPIA (try getting THAT from Qwest) that they use to do video conferencing with schools in other countries as part of language immersion programs. That's some totally awesome stuff. They're also using telecommuting to have students be able to participate from home. Telecommuting for students? Me likey.

10:20AM And more truth. Qwest and Comcast were invited to join and declined. Just because they don't believe that it fits their business model (read: vertical monopoly) doesn't mean cities don't have the right to join. Based on some new comments, I think this might be Roger Black speaking. I'm still not sure.

10:19AM Wa-BAM! Shaw says that UTOPIA hasn't has to use a single red cent of tax dollars thus far in the project, depending solely on bond money. He also noted that Titch's rant about financial matters is that UTOPIA hadn't planned to be at a break-even point by now anyway. He also brought up that the RUS grant is a tacit approval of the solvency of the project from the federal government. Truth 1, fudged numbers 0.

10:16AM I think Mr. Shaw is the one speaking right now, but I missed that change of speakers. He's citing that some cities have lost businesses or missed out on new business opportunities because of a lack of broadband. He also brings up Brigham City's success in attracting a new business based on UTOPIA access.

10:14AM Now we've got a discussion about the immense interest level that UTOPIA has been received from private citizens and the wide speed delta between UTOPIA and other providers. Apparently UTOPIA has also been asked to speak at other gatherings internationally as a model for other fiber projects. That's all good for the residents of Utah.

10:12AM Tew made the great point that cities have the right to determine what services they will be providing. Sen. Stephenson then asked some questions about taxation in regards to UTOPIA pointing out that the wholesale portion may not be paying. This ignores, however, that the lower service prices increase economic activity and can produce a surplus of revenue for the cities with sufficient participation. Tew also rebuffed the idea of a further moratorium citing the previous one that just expired.

10:08AM There really wasn't a lot on broadband there other than a quick overview. Now we'll get to hear from UTOPIA, Provo, Comcast and Qwest in that order. Roger Tew is starting off.

10:05AM After a lot of information concerning the electrical industry, we're getting into broadband.

10:00AM This is good stuff, a first-rate presentation on what powers an incorporated municipality has especially in relation to public utilities. She also went into what constitutes a public utility and what method by which they can be delivered (i.e. by a well-regulated monopoly, municipal ownership, etc.). She also discusses arrangements like cooperatives.

9:54AM Steven Titch has left the stand. We're now going to have a presentation from Patricia Owen, a legislative researcher.

9:51AM Sen. Stephenson brings up a good point. Construction in newer areas ("greenfields", they're called) is progressing faster than in existing areas. Of course, that has more to do with the trenches that are already dug that don't disrupt existing areas. Just like new roads are often taken care of prior to resurfacing existing roads.

9:48AM And… another lie. Sen. Stephenson caught him on it too. He tried to say that UTOPIA's loans are guaranteed by the state. Uh… WRONG! They're backed by sales tax revenues from pledging member cities. If you're going to appear at a hearing like this, you'd better study first.

9:43AM Sen. Stephenson asked about Spanish Fork. Mr. Titch mis-characterized the nearly $500K of black ink as "breaking even" and tried to dodge the question as to how it's doing financially. He goes on to use this outright lie to insinuate that they are cooking the books! Man… anyone in the know can tell this guy is a total shill.

9:41AM Wow. I like Sen. Goodfellow. He's asking the really hard questions. He brought up that UTOPIA service providers are existing private companies. Now Steven is changing his tune: he's calling it unfair competition against wholesalers instead of Qwest and Comcast. Who knew he had waffles for breakfast?

9:38AM Titch finally said something I agree with: muni networks suck at marketing. Of course, any organization or company with bad marketing won't do so hot. Given that private broadband has been growing, it seems like a relatively cheap fix to make muni networks experience a better take rate. MSTAR? Nuvont? Are you guys listening?

9:37AM Sen. Goodfellow is taking Titch to task by asking him to cite our international competitiveness in the broadband market. Titch admits we're 15th according to the OECD report, but he's trying to pull the old density card. If density is the key, why don't we have 100Mbps in New York? Or Chicago? Or Philadelphia, Boston, San Francisco or Los Angeles? Apparently this doesn't mean we're falling behind, though. Totally silly.

9:33AM Here's the money. Titch is now recommending an extension of the moratorium on new UTOPIA members amounting to a renewal of SB66. Given that the Legislature won't be in session until February 2008, cities would still have a chance to join prior to such a death sentence. I guess he missed the memo that we already had a 3-year ban on new members.

9:30AM We're up to 8 members of the committee now. Titch has now gone on to say that muni networks are unprepared for high-bandwidth applications. It's kind of funny that he'd say that when UTOPIA provides about twice the steady downstream and over 20 times the upstream when compared to the fastest cable and DSL plans. He then goes on to say that Sprint's new Xohm service will blow it out of the water, but WiMax has been a perpetually-delayed product and the equipment is still rather expensive.

9:27AM Congrats to Lafayette Pro Fiber and Tri-Cities Broadband: you just got a plug from Titch. Unfortunately, he called you guys a bunch of one-sided hacks. The irony.

9:23AM Hey Steven? Did it occur to you that the poor take rate for muni wireless has to do with poor signals and that comparing it to wired service is kind of silly? Why no mention of Loma Linda, CA? Why no attacks on the Corpus Christi, TX wireless system? I smell cherry-picking.

9:22AM I just noticed that 7 members of the committee are now present.

9:21AM Okay, it's fair to hand Earthlink out to dry. However, classifying their 900-employee "streamlining" as almost the entirety of their wireless services business? That's an outright lie. Maybe he's forgotten that Earthlink has a significant amount of its business invested in dial-up and re-branded DSL and those businesses aren't doing so hot.

9:19AM Now comes the attacks on UTOPIA. Apparently UTOPIA revised estimated revenue to 33% of the original estimate and upped estimated costs by 44% over original. This fails to take into account the long wait for federal RUS funds which delayed construction. It also fails to note that most of the initial costs are backbone-related, not to-the-home deployments. He never mentioned the take rates for served customers.

9:16AM As expected, he went after iProvo first.

9:11AM Amazing. He actually disclosed that Qwest was a client of his. That wasn't so hard, was it?