Open Access – UTOPIA

UTOPIA is an intergovernmental agency, founded in 2002. It is made up of 14cities in western Utah, representing about one-third of the state’s population. UTOPIA plans to build a fiber-to-the-home network that will deliver speeds of at least 100 Mbps to every home and business in each member city.

A number of Utah municipalities began considering fiber optics in 2000, as part of infrastructure upgrades for the 2002 Olympics. The city of Provo, dissatisfied with the speed and price offered by the incumbent cable and telephone companies,purchased a locally owned cable company which it used as the foundation for its municipal fiber optic network. The other cities moved forward with UTOPIA.

AT&T challenged Provo and UTOPIA at the state legislature in 2001. Compromise legislation was passed that bans cities from selling retail broadband services, but allowing them sell wholesale access to publicly owned networks. AT&T eventually became the anchor tenant on the UTOPIA network, after it sold its own cable assets. Qwest, on the other hand, has continued to file legal challenges against the network.

UTOPIA owns,operates and maintains the infrastructure. Construction of the network was started with $85 million in bonds. The total cost of the system is projected to be $470 million. Each municipality will issue revenue bonds for its portion of the overall investment. Service will be installed in cities in the order in which they approve funds. Revenues from selling access to private service providers will be used to pay operating expenses and retire the bonds. Utopia anticipates positive cash flow in the first ten years, possibly reaching the break-even point for operations and debt service by year seven.

Private service providers lease capacity on the network. UTOPIA expects private service providers will eventually use its network to offer high-speed Internet access, HDTV, video on demand, medical monitoring,teleconferencing, and phone service. Community services will include community programming on demand, traffic monitoring, meter-reading, and advanced communications for emergency services.

Utopia’s cables now pass about 15,000 homes and businesses. One service provider, MStar, offers Internet service at speeds of 10 Mbps, for both uploads and downloads, for $40 per month.

The network will benefit not only those who subscribe to it, but also those who subscribe to the incumbent cable and telephone companies’ services.Already, Comcast has lowered its price for a 4 Mbps connection to $30per month in UTOPIA cities, compared to $46 per month in non-Utopia cities.

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