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No Comments [ Add Comment ]Going to get it?
By Jeff DeMossMany Utah cities will soon have phone, HDTV and Internet available through UTOPIA
LAYTON -- Residents of this Davis County city and four other Top of Utah communities will soon be able to watch high-definition television, hold video conferences in their living rooms, make phone calls over the Internet, and access the Web at unprecedented speeds -- all through a single cable into their homes.
Construction is already under way in Brigham City, Perry, Tremonton and Layton on the Utah Telecommunications Open Infrastructure Agency, better known as UTOPIA, and Centerville plans to break ground at the end of the month.
Known as the nation's largest publicly backed fiber-optic network project, UTOPIA, since its inception in 2002, has been both lauded as a technological, economic and social boon and denounced as a risky and irresponsible commitment of public funds.
Either way, it has become a reality, and the local cities involved are clamoring for the chance to experience the high-speed network.
"We're excited that our wait is finally over," said Paul Cutler, a Centerville City Council member who has been involved with UTOPIA since the beginning.
Eleven Wasatch Front cities have pledged millions of sales tax dollars to back up bonds used to finance construction of the network, including the five Top of Utah cities involved.
Three more -- Riverton, Cedar Hills and Cedar City -- have joined as members, but have not pledged any funding yet.
Alex Jensen, Layton city manager and chairman of the UTOPIA executive committee, said work is well under way on the city's first build-out phase, located in an area bordered by Hill Field Road and Fort Lane on the west and east, and by Gordon Avenue and about 1600 North on the south and north.
The Layton network will be fully built out on the east side of the freeway before moving to the west side, Jensen said.
"Some parts of the community will show more interest than others," he said. "Our pre-analysis looked at demographics, construction costs, and other factors to determine where we should build first from a business perspective."
UTOPIA should start delivering service to its first Top of Utah customers in September, and construction is expected to be finished by the end of March 2008.
Four providers, three of them based in Utah, are currently offering voice, video and data services through UTOPIA in Murray, Lindon, Orem, Midvale, West Valley City and Payson.
Connection speeds range from up to 15 megabits per second for residential connections to 30 megabits or more per second for businesses. Monthly subscription costs start at $40 for residences and $125 for businesses.
Since July 2004, the project has secured three rounds of financing totaling $181 million. Total build-out cost estimates hover around $500 million.
'Varied' response
Roger Black, chief operating officer for UTOPIA, said the network has received a "varied" response in the Utah County cities of Lindon and Payson, where the service is already available. It currently has about 6,000 subscribers in Utah and Salt Lake counties.
So far, the "take rate," or the percentage of homes that subscribe to the service where it is available, is about 22 percent systemwide, Black said. Some areas have higher-than-expected take rates, while others have greeted the network with apathy.
Rural communities where alternative services are unavailable, such as those in Box Elder County, should produce even higher take rates, he said.
"We've had our challenges as we've had interruptions in the flow of financing, but those seem to be behind us," he said.
Jensen said an initial take rate between 20 and 25 percent in Layton would be "very healthy."
"Hopefully, we would generate additional demand as the word gets out and the service providers come up with new and unique services," he said.
Commitment?
If the network were to fail in Layton, the city could be on the hook for as much as $10 million. The city has committed about $1.6 million in backup funding already, Jensen said, but if the projections prove to be true, that money will never be needed.
"We wouldn't be involved if we didn't think this could sustain itself," he said. "It is our intention and hope that those funds will never be used."
Not all agree that the network will pay for itself. Mike Jerman, vice president of the Utah Taxpayers Association, said UTOPIA's revenue projections are overly optimistic, and guaranteeing public funds for a network that competes with private industry could hurt local tax revenues.
Private companies provide thousands of jobs and pour millions of tax dollars into local coffers, Jerman said, and slanting the playing field with public funding could jeopardize those contributions, he said.
"This is the kind of thing that could endanger our strong economy in Utah," he said.
Underserved areas
But proponents say UTOPIA will boost local economies by attracting new business to areas that have historically been underserved by private interests.
Centerville plans to start laying 74 miles of buried cable and 20 miles of aerial cable at the end of this month, Assistant City Manager Blaine Lutz said.
Having UTOPIA in Centerville will contribute to economic development and new jobs in the city, where a large office building and commercial park are under way, Lutz said.
"The economic vitality of our city depends on how good our access is to high-speed telecommunications," he said.
It also will improve the quality of life for residents, he said, by allowing them to use the technology to stay connected with distant family and friends, work from home, and conduct personal business, among other possibilities.
Following a competitive bidding process, the network build-out contract was awarded to Tetra Tech Inc., a Pasadena, Calif.-based contractor with offices in 50 states.
Private competitors such as Comcast Corp. and Qwest Communications International Inc. have taken note of the new network, and are responding by offering discounts and promotions in the cities where UTOPIA operates, as well as expanding their own footprints in Utah.
Qwest struck an exclusive deal with Kennecott Land in 2004 to deploy a fiber network at the Daybreak community in South Jordan.
Gary Younger, spokesman for Qwest in Utah, said the Daybreak deal is not a direct response to UTOPIA. As a new community, Daybreak presented an ideal opportunity to deploy the best communications infrastructure available, Younger said.
Comcast threat?
Comcast spokesman Ray Child said that while the company has opposed UTOPIA in the past, it isn't worried about a mass exodus of Comcast customers to the new network.
"Competition makes everyone better," Child said. "We think there's room for everyone, and Comcast will continue to provide unique services at a great value."
Jensen agreed that UTOPIA leaves plenty of room for private competitors, even in cities like Layton, where the full range of options is available.
"It depends on peoples' individual needs," he said. "I'm sure a lot of people will stay with Comcast, while others will go with UTOPIA."
He hopes local residents and businesses will make the distinction between the publicly-owned UTOPIA and private providers.
"It's not just another national business coming in to make a profit. There are other motivations behind this to better the community."
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