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Editorial: UTOPIA cities should drive a hard bargain

Published June 24, 2014 10:03 am

Don't sell UTOPIA short.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

The feeling of failure that pervades the 11 Utah cities that created, and now carry considerable debt for, the UTOPIA fiberoptic system is understandable. But it is not helpful.

At least one global investment outfit wants to talk seriously about taking on the responsibility of carrying the Utah Telecommunications Open Infrastructure Agency to its operating and financial potential. That should allow the cities to proceed as though they are sitting on something of value, get their game faces on and begin some hard negotiations over how such a rescue might work.

Facing total debt payments that now top half a billion dollars, a burden that cannot responsibly be walked away from, any realistic possibility that UTOPIA can become the 21st century gateway to universal high-speed Internet services that its founders dreamed of must be considered.

One such proposal is from an Australian firm called Macquarie Capital Group. In return for a share of the gate, Macquarie would use its own money to build out the system to reach all of the 150,000 or so addresses in the UTOPIA system, provide upgrades and serve as an unrestricted portal for all of the data, audio, video and other streams that providers can sell to those homes and businesses.

Real hard bargaining on the part of the cities will only be possible if Macquarie isn't allowed to think it has the UTOPIA communities over a barrel. The cities will always have to retain the option of walking away and letting their prized network go dark. They also should be ready to leverage any knowledge that comes from the talks toward seeking other private-sector suitors if Macquarie doesn't pencil out.

The next step in the process would be for the cities to agree to proceed to what the Macquarie proposal calls Milestone 2. That's a process that could cost the cities several thousand dollars, but commits them to no more than getting down into the weeds on costs, timetables, levels of service, a guarantee of neutrality as to content providers and the sharing of revenues. Revenues that might help defray all that debt and hopefully offset the monthly fee of $18 to $20 Macquarie says would be needed from every address in UTOPIA, signed on or not, to make the books balance.

Constituent cities are deciding on whether to go to the next step. West Valley City, among others, is in. Lindon is out.

All the cities should go to the next level. They should do so with sharp eyes, sharp pencils and, most of all, without the inferiority complex that might push them to settle for anything less than what those cities, and their residents, are worth.






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