UTOPIA may face tough test
It fears private industry may slash its service fees
Officials with the Utah Telecommunication Open Infrastructure Agency said Monday they expect funding for the first phase of the fiber-optic data network to come through as early as late July or August, if things go as planned.
However, the director for UTOPIA said officials worry private industry might try to stamp out the fledgling network by lowering services fees to ridiculous levels if the location of the first test network is disclosed.
"I'm sure it's not going to be a secret," said UTOPIA executive director Paul Morris, who said it will be difficult to hide the work from companies such as Comcast and Qwest. Yet Morris doesn't know if UTOPIA wants to make it any easier for them by announcing which city will be host to the first UTOPIA network.
UTOPIA is touted as a data network that will be fast enough to offer telephone, Internet and television services in one high-speed connection. Although the network infrastructure will be managed by a quasi-governmental entity, private service providers such as AT&T will compete on the network by leasing into the system.
Some elected officials say UTOPIA is the answer to what they regard as lackluster service provided by telecommunications giants Qwest and Comcast. Qwest, Comcast and the Utah Taxpayers Association have called UTOPIA a risky gamble using taxpayers' money.
When asked if that is something his company would do, Qwest spokesman Vince Hancock said, "We can't disclose what we might do due to the competitive nature."
Hancock added that unfair pricing would be something the Utah Public Service Commission wouldn't look kindly upon.
On Monday, the UTOPIA Board of Directors approved the final interlocal agreement, which will commit UTOPIA cities for the next 50 years. The agreement also protects member cities, Morris said, by shielding them from legal liability.
The $340 million broadband fiber network, which is expected to service 11 financially committed cities, will be funded through bonds taken out by UTOPIA and backed by a set amount of sales tax dollars. Morris said the bonds are UTOPIA's debt and that under the interlocal agreement, cities would not be held legally liable if the network fails.
"It isn't their debt on their backs," Morris said. "It's UTOPIA's."
The agreement also outlines the benefits and responsibilities for two types of member cities. Cities who paid out money to back bonds will also share in not only revenue generated by their city's network but a portion of the total UTOPIA network. Morris said an exact revenue-sharing formula has yet to be created.
You can be the first to comment on this story.