Category Archives: News

News articles about UTOPIA from around the country and around the world.

BREAKING: Midvale Approves Rebonding, Payson Rejects It

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I attended the Midvale city council meeting tonight and the city council unanimously approved the new bonds for UTOPIA by a 5-0 vote, much to the dismay of many of those in attendance. I know I was somewhat ambiguous about the new bonds but after the presentation by Kirk Sudwicks (?), I knew they had put together a solid plan with high odds of success. The city council realized it too and I could tell they'd done their homework when they later explained their votes. Kudos for them to being willing to do what they thought was right in the face of so much hostility (and a fair number of folks speaking out of order). 

Payson, meanwhile, rejected the new bonds by a 4-1 vote. This came as a surprise as it was expected as recently as last week that they would pass the new bonds. Word on the street is that the Utah Taxpayers Association launched a blitz on their city council to talk them out of it. Payson residents, there's still time to talk to the council and have them reconsider the motion. I know that once I get a chance, I'll be opening a dialog with each of them to find out why they rejected it.

I haven't seen anything on the five other cities voting on the bond issue tonight, but I'll be sure to post more as it hits the newswire tomorrow. 

iProvo's Blue-Ribbon Panel Unveiled

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Provo's Municipal Council has decided that they want to take a fresh look at iProvo on their own. To that end, they've setup a blue-ribbon panel of elected officials and local businessmen to evaluate the just-released consultant's reports from CCG and Franklin Court. The list of members reads like a who's who of Utah County politics:

  • Council Vice Chairman George Stewart
  • Council Chairwoman Cindy Richards
  • Councilman Steve Turley
  • State Sen. Curt Bramble
  • State Rep. Steven Clark
  • GOP Chairman Stan Lockhart
  • Former Councilwoman Jane Carlile
  • Utah County Commissioner Steve White
  • Far West Bank CEO Don Norton
  • Capital Community Bank VP Ron Eliason
  • Dan Campbell, developer
  • Scott McQuarrie, developer

As you can see, both supporters and detractors of iProvo are on the panel and it should provide for some lively discussions, especially since CCG's report advises Provo to pay $2M per year for services that the city gets from the network, the entirety of the department's shortfall. I imagine a key point will be to examine if the city is getting services of that value out of the network or if it's been inflated so that the loans to iProvo are no longer loans.

Speaking of the consultants reports, they should have been presented to the Telecommunications Board today and should be available to the public now (though I can't find links on Provo's website). 

UTOPIA's New Model: Kill It to Save It?

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The news is out: UTOPIA is undergoing some radical changes in the near future as it copes with lower than expected take rates and cash flow issues. What kind of changes you might ask? For starters, it's going to concentrate new deployments only on areas where a large number of users will commit to service. (My sources say around 40% will be the requirement.) You'll also have to shell out around a grand for the installation costs which could later climb to $2,500 or more depending on the circumstances of the installation. It's also going to use most of the leftover money from the re-bonding to cover operating costs for the next several years instead of accelerating deployments.

Not all is bad news, however. Part of UTOPIA's plan will be to consolidate advertising within the organization and more heavily market UTOPIA to the areas with existing deployments. This will likely lead to a surge in take rate that will be used to finish up the fiber rings within the cities. Since the network meets current operating expenses with a 18.4% take rate and iProvo has been able to get into the mid-to-high 30s, it seems likely that this is a temporary setback rather than a permanent one.

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Provo to Create an iProvo Committee

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The Provo City Council plans to discuss a resolution appointing members of a committee to review matters related to iProvo at their meeting on Tuesday April 22. If you won't be busy at one of the many UTOPIA-related meetings that day, drop by the council chambers at 351 W Center St around 5:30PM to provide some public input. I'd also encourage you to contact your city council members prior to the meeting to voice your concerns and find out more about this committee.

Public Meetings for UTOPIA Re-Bonding Announced

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I've received the following schedule for city council meetings regarding the UTOPIA re-bonding. If you live in these cities, it is vitally important that you show up at these hearings to voice your support for UTOPIA. The schedule is as follows:

  • Brigham City: Thursday April 24 at 7PM, 20 North Main, Brigham City 84302
  • Centerville: Tuesday April 22 at 7PM, 250 North Main, Centerville 84014
  • Layton: Thursday April 24 at 8PM, 437 North Wasatch Dr., Layton 84041
  • Lindon: Tuesday April 22 at 6PM, 100 North State, Lindon 84042
  • Midvale: Tuesday April 22 at 7PM, 655 West Center Street, Midvale 84047
  • Murray: Monday April 28 at 6:30PM, 5025 South State, Murray 84157
  • Orem: Tuesday April 22 at 6:30PM, 56 North State, Orem 84057
  • Payson: Tuesday April 22 at 6PM, 439 West Utah Ave, Payson 84651
  • Perry: Thursday April 24 at 7PM, 3005 South 1200 West, Perry 84302
  • Tremonton: Tuesday April 22 at 5:30PM, 102 South Tremont Street, Tremonton 84337
  • West Valley City: Tuesday April 22 at 6:30PM, 3600 Constitution Blvd., West Valley City 84119

Since I haven't figured out how to break the laws of time and space, I obviously won't be able to attend all of these meetings personally, but I like for anyone who does to write me and let me know how the meetings went. I'll make my best efforts to be at the meetings in Midvale, Murray and Layton. A special thanks to Paul Cutler for supplying me with this schedule.

From the FUD Department: Qwest's Fiber Pipe Dreams

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Get your Reality Distortion Fields ready: the Salt Lake Tribune reports that Qwest is planning on building fiber. Despite the catchy headline, it looks like this plan is a lot of smoke and no fire. Qwest plans to build a FTTN network capable of 20Mbps by the end of the year at a cost of $300M. Compare that to UTOPIA who can do 50Mbps right now at a cost 10% cheaper per household served.

This raises some great questions, chiefly how it is that UTOPIA can build a better network at a lower cost than one of the country's largest telecommunications companies. Qwest's cost per served household is somewhere in the range of $1500 while UTOPIA is doing it for $1350. When you figure out the cost per megabit per household, Qwest is spending nearly triple what UTOPIA is. If Qwest stockholders are expecting a decent return on investment, I've got some great investment opportunities in subprime mortgages for them. This is further proof that Qwest just doesn't get it.

Do or Die: iProvo May Be Cut Off By the City Council

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According to a source familiar with Provo politics, the city council will not extend any further funding to iProvo from this year's budget to cover bond payments. The city's fiber optic network has been experiencing steady losses as revenues have failed to completely cover the bond payments. When combined with the failure to fill up to 4 high-level management positions within the agency and declining sales tax revenue growth as the economy cools down, the city council sees further investments in the network as a losing proposition.

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More Details on UTOPIA's Build Progress

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A surprisingly accurate story from the Deseret Morning News (no, really) reveals further details on UTOPIA's current build progress. Here's a list of the current completion per city:

  • Lindon: 95-99%
  • Payson: 95-99%
  • Tremonton: 95-99%
  • Perry: 50%
  • Orem: 50%
  • Murrary: 50%
  • Midvale: 40%
  • Brigham City: 33%
  • Centerville: 25%
  • Layton: 15%
  • West Valley City: 15%

We also get some more critical details on the financial picture. With the current 7,000 subscribers, UTOPIA is currently covering operating costs. Given the two-year reprieve from bond payments under the new bonding plan, UTOPIA will have plenty of time to wrap up construction in the current Phase I and Phase II cities and boost subscriber numbers to the point where covering the debt service won't be an issue.

So how about the benefits already realized by UTOPIA users? Orem is saving $600,000 per year in telecommunications costs, a sizable chunk of the money they pledged for UTOPIA. Print Advantage of Lindon went from ferrying around large files on portable hard drives to having customers directly upload them over their shiny new 10Mbps connection, a connection that cost just 60% of what they paid for a T-1 line at about 1/7th of the speed. Laura Lewis, a member of the firm that handles UTOPIA's finances, downloads movies from iTunes 60 times faster than her friend in Sandy.

As more details come out, the future for UTOPIA looks bright indeed. Let's hope that the city councils in member cities see it the same way when voting on the rebonding. 

Centerville Leery of New UTOPIA Bonds

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At least one city council has cold feet about additional commitments for UTOPIA. City officials in Centerville are going to ask some hard questions leading up to the city council meeting on April 22 where the fate of the new bonds will be decided. As preparation for it, they'll be holding a workshop on April 15th at 5PM with UTOPIA to get answers as to why the additional bonding is necessary. Unsurprisingly, Qwest and Comcast have both planned to be in attendance.

I'd normally attend a meeting like this, but I'll be out of town on business that day. It will be vitally important that any UTOPIA supporters attend as well as  provide information to the city council and mayor about the delays in RUS funding that have precipitated this.

Read more from the Clipper.

More Details of the Changes at UTOPIA

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If you live in Tremonton, Brigham City, Perry, Centerville or Layton, I have good news: UTOPIA plans to resume construction Real Soon Now(TM). So long as city councils approve the reconstruction of the loans, construction will begin in the northernmost cities this May with construction in Davis County to pick up again later this year. The deployments will be focused on building the fiber rings in each city and then building out into the neighborhoods to hook up homes and businesses. Going out to end users will now be driven by customer demand filtered through providers, essential for maximizing take rates.

So why the construction delays? Blame the USDA. They've been dragging their heels for some unknown reason and have failed to disburse the money from the approved RUS loan. The financial restructuring is so that UTOPIA can have the money to resume construction without having to wait for the money from the feds. Since they are contractually obligated to build out RUS cities right now and can't expend money from non-RUS cities to do it, the financing is absolutely required to move forward.

The Deseret Morning News wasted no time in ignoring these realities in a new boilerplate editorial rooting for the project's failure. The Utah Taxpayers Association also piled on in their most recent newsletter (warning: PDF). Neither of them acknowledged how UTOPIA has repeatedly has the rug pulled out from under them (Qwest lawsuit halting construction, utilities illegally blocking access to poles, delays in RUS funding) and yet has still managed to not call one red cent of pledged sales taxes, a feat that should be lauded instead of derided.

You can read more from the Davis County Clipper and Deseret Morning News.