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Editorial: Is down under a way out for Utopia?

Published December 24, 2013 1:01 am

Australian company a way out?
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

If the Australian company Macquarie Capital can find a way to complete the beleagured fiber-optic Internet network UTOPIA and make a profit on its investment, it will have accomplished a goal that has eluded a series of investors over more than a decade, including 11 Utah cities.

UTOPIA — an acronym for the Utah Telecommunications Open Infrastructure Agency — was formed as a public/private venture 11 years ago to deliver super-high-speed Internet access to businesses and homes in cities from Brigham City to Payson,at speeds up to 200 times faster than the speeds available from private vendors.

Indeed, UTOPIA has one of the fastest networks in the country with speeds up to 1 gigabit per second, and it has helped Utah win a Forbes ranking as the fourth-best state in the country for tech jobs and Internet connections.

But UTOPIA has struggled with construction and management problems, burgeoning debt and bad deals with vendors.

The cities have issued two rounds of bonds amounting to about $500 million. The debt is backed by tax money, but UTOPIA executives keep promising it will be paid off with revenue from customers who have failed to materialize in sufficient numbers to make the venture workable. The network has only about 11,200 subscribers, and many areas in the member cities are not yet wired.

After 11 years, it seems unlikely that the promise of UTOPIA will be realized.

Earlier this year, search engine giant Google announced that it would purchase the likewise unprofitable iProvo network — a one-city version of UTOPIA — and make it the third metropolitan area in the country to get its Google Fiber high-speed network.

Macquarie could provide the 11 UTOPIA cities the same sort of relief Google Fiber brought to Provo. If so, it still would leave the municipal taxpayers holding the bag for the existing UTOPIA debt, but it would give them a way out.

It's been a hard lesson: There are some things that government does best, and some things better left to the private sector. Information systems simply are not the type of infrastructure that is a basic government responsibility, like roads and water systems.

Provo Mayor John Curtis accepted the fact that iProvo was not a logical fit for a local government with limited resources and many other responsibilities.

Macquarie, with billions invested in diverse interests worldwide, could make a go of UTOPIA. We hope so.




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