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A critical misunderstanding of a fundamental precept of the proposal by Macquarie Capital to take over operations of the notorious UTOPIA network was echoed in Richard N. Gilbert's letter to the editor ("Is UTOPIA fee really a tax?" July 15). I would like to correct the record.

Mr. Gilbert stated that once UTOPIA is installed on his home and he is paying a monthly utility fee, he will not receive any service because he "must also pay a provider an installation charge to install a connection from the fiber-optic line to their desired location, and an additional monthly provider fee between $35 and $85 per month." This is factually incorrect.

Under the Macquarie proposal, service providers on the network such as XMission will provide a free basic 3 Mbps Internet service for any resident in a UTOPIA city with no charge for installation. We are offering this at our own expense, although a small one-time subsidy from Macquarie will help us install the internal wiring that connects the citizens to XMission.

We service providers accept this proposal and are willing to make this investment because we find value in having a presence in so many homes and businesses. We believe that the revenue opportunities it will provide us through happy users will offset the cost of providing free service to tens of thousands of city residents.

Warren S.N. Woodward

Director of Broadband, XMission