Wed 7 Nov 2007
November 7 Subcommitte Meeting Postscript
Posted by Jesse under Events, Jeers, Legislation
I was rather surprised to see the UTOPIA legislation get tabled at today's meeting. Given that this issue has consumed a significant amount of time at each meeting I've attended and has received a significant amount of public comment, I would think any proposals on the table would have been ready to go. Based on some observations outside of the official committee proceedings, I think Qwest is up to something.
For starters, I noticed that the Qwest rep would re-enter the room shortly after a member of the committee would. I also observed him having a one-on-one conversation with Sen. Stephenson during the lunch break. It's worrisome enough when legislation starts being discussed outside of a public hearing, but that Qwest may have been a major force behind that concerns me even more. Just what are they up to? Will there be sufficient chance for public review, or will this be rushed through via a "boxcar" bill? We stand at a serious risk of seeing some stealth anti-UTOPIA legislation pushed through in the 11th hour.
It's critically important that EVERYONE write, call and e-mail their elected representatives to express their opinion on UTOPIA and get to legislators before Qwest has a chance to. They want a fight? By golly we'll give them one.
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Pingback from Finances and Cherry-Picking: A Response for Rep. Steve Urquhart » Free UTOPIA!
November 19th, 2007 at 10:16 am[...] DC, Venice and Florence, I had a few questions posed to me by Rep. Steve Urquhart of St. George on my summary of the November 7 subcommittee hearing. It seems he has some concerns over the financial viability of the project and some perceived [...]
November 7th, 2007 at 7:37 pm
Definitely does look fishy.
If we can help get any future messages out, should you hear of 11th hour tactics, let me know.
Any UTOPIA legislation information you can send our way would be great. Attended “The Case Against Comcast” conference call today, and when they found out I was from Utah, there was an “Oooooooh” from the other’s on the call. The guy from EFF just said they had their eyes on Utah, but didn’t elaborate.
I would love to help draw statewide attention to these (and similar) issues, just in case.
November 8th, 2007 at 12:37 am
Jesse,
I enjoy your thoughtful posts. I don’t have time right now to write anything particularly thoughtful, but I’d like your input on something.
You endorse UTOPIA’s dedication to ubiquitous service. Cities can decide whether they want that and whether they want to financially back the project. Time will tell whether that is or is not a wise allocation of public resources. (Clearly, fast internet is good; the question is whether the model and the company are financially viable — which will determine whether taxpayers are left holding the bag). But, let’s put that model aside for a second.
A different aspect of UTOPIA’s business plan, in cities that do not pledge financial backing, is to cherry pick more profitable areas (meaning more affluent) and to ignore less-profitable areas (meaning less affluent). I’d be interested in your take on that strategy.
My understanding (and experience; I do some legal work for a cable company) is that UTOPIA will not go into any subdivision in those cities, unless all other competition is effectively excluded. Competition is excluded by the developer forcing homeowners to buy UTOPIA’s offerings (by putting part of the cost of UTOPIA offerings in the homeowners association dues; no one is going to pay twice). The arrangement is designed to give homeowners less choice and to allow developers to skim residual income for life.
November 8th, 2007 at 7:16 am
I’ve heard the cherry-picking accusation and I don’t believe it for a moment. For starters, UTOPIA is prohibited by their own bylaws from building anything in non-pledging cities that would put monies from the pledging cities at risk. The only way that UTOPIA would be able to build in one of those “green field” subdivisions is if the developer fronts all of the money for construction of the network, thus no financial risk to pledging members.
Secondly, the FCC outright banned exclusive cable television contracts just last week, something that Comcast has been all too willing to engage in. (I should know; I lived in an apartment where, want it or not, the cost of Comcast basic cable was included with rent.) The exclusive contracts always hurt UTOPIA more than it helped them since it kept them out of multi-unit dwellings in member cities. Now that the contracts are out of the way, they just have to negotiate with the property owners.
Finally, since UTOPIA hasn’t started any construction in non-pledging cities and cannot do so until it is revenue-positive (which should occur sometime in 2012 based on current projections), we have no idea what their build pattern will be. I would guess they would hook up homes and businesses closest to the backbone first since that’s easiest. After all, if they’re already revenue-positive, it’s not like they need those areas to be immediately profitable.
One of the reasons I’ve objected to the assertions of cherry-picking is that Qwest and AT&T have allegedly been major backers of statewide video franchise agreements in our state. Such agreements have a history of cherry-picking, even in states such as Illinois where they’re required to provide service to as many residents as possible. I would certainly think that both of those companies would be eager to try and lock in some exclusive contracts; they already do so directly by offering lower rates to consumers in exchange for one- or even two-year contracts replete with early termination fees.
If cherry-picking is a real concern, then statewide video franchise agreements should be opposed at every step. I found Sen. Stephenson to be hypocritical on the issue since he lobbed the accusations at UTOPIA yet voted for SB 209 in the last session.
November 8th, 2007 at 12:20 pm
I would love to meet with you some time, to discuss this issue and many others. You truly have grabbed my attention with your consistently thoughtful observations. If you would like to do so, please email me your contact information.
My responses: point 1 — we might be talking past each other on cherry-picking. I don’t mean to say that UTOPIA is putting pledging cities at risk by its activities in non-pledging cities. Rather, it is attempting to shore up activities in pledging cities by doing the exact same thing Qwest, Broadweave, and many other companies are proposing in non-pledging cities — that is, offering services in upscale subdivisions only when it is guaranteed customers through mandatory HOA fees imposed on homeowners.
Second, I wish the FCC would have banned exclusives (and ulimately it might). For now, the Order only goes to apartments. In any event, UTOPIA (and Qwest and other cherry-pickers) doesn’t “exclude” competition — by saying “you can’t come in here” — that, as you say, would be illegal. Rather, cherry-pickers strike a deal with the developer (before any actual customers/homeowners are in the picture), whereby the fees for the cherry-picker are part of the mandatory HOA fees. Once that is done (and it is done so that the developer can then add a margin on top of the fee in order to get residual income for life), homeowners are stuck; no one hates their service enough to pay for it (on a forced basis) and, then, pay again for a different service.
I’m not familiar with the last point you raise. Does UTOPIA have some limitation that it can’t build in non-pledging cities until it is revenue positive? Please share your source for that. If that is the case, I’d like to know its accounting procedures. Because, quite frankly, with capital costs in excess of $5,000/subscriber, there simply is no way it ever will turn revenue positive.
I agree 100% with your assertions that Qwest and AT&T want a statewide franchise so that they can cherry pick. Anyone who pretends otherwise is plainly uninformed or misguided. They want to prevent cities from having the ability to make the build-out v. cherry-picking decision; providers would be able to cherry pick wherever they want. For now, UTOPIA is not arguing for statewide franchising, but it is extremely busy approaching cities for cherry picking franchises. Just in Washington County, UTOPIA has obtained a cherry-picking franchise in Washington City and is lobbying Hurricane to allow cherry picking (alongside Qwest and Broadweave).
November 8th, 2007 at 1:02 pm
Okay, I see the point being made there. UTOPIA would not be able to make such exclusive arrangements because they are legally restricted from providing the retail service. If an exclusive contract were to be made, it would have to be between one of the service providers (most likely MSTAR since they’re the only one with a triple-play package). As I understand it (and this is based on the testimony of UTOPIA during hearings this year), developers pay to have the network installed to add value to the homes, not to engage in any kind of revenue-sharing agreement.
You’re correct on that clarification that the ban on exclusive contracts is currently only for MUDs. I’d be glad to see a ban on such compulsory arrangements or, minimally, an opt-out provision for residents. After all, you’re probably going to eat the Big Mac you just paid for rather than ordering a Whopper.
So far as I understand it, that has been UTOPIA’s agreement with all members cities from day one. I’m not a lawyer, but since you are, you might find their interlocal agreement (PDF) to be enlightening. Thus far, all of the testimony they have offered in committee has backed that up.
As far as installation costs, $5K per subscriber is very far off. Verizon has been doing FIOS installs for $2K per household and UTOPIA’s original white paper specifies deployment costs of around $1400 per household. What I understand is that the project is financed with a 1.5% construction loan converted to a 20-year bond at 6%. The network is designed to satisfy this debt around a 20-25% take rate. Most historical data I’ve seen from muni fiber projects show second year take rates in the 40-45% range. The reason iProvo is doing much worse with higher take rates is because they aren’t sharing a bunch of facility costs with over a dozen other towns; the same problem is what hit American Fork’s AFCNet so hard.
I don’t know that the characterization of Washington City is accurate. They joined as a non-pledging member, so they will obviously see construction late in the game and at a much slower pace. I would guess that areas near I-15 (close to the fiber backbones and likely exchange points) would be the first to be built based on geographic convenience. Again, we haven’t gotten to a point where UTOPIA can build in a non-pledging member city so we have no idea what the build pattern will be. It’ll take 4-5 years for us to find out. Until then, we end up making a lot of assumptions.
Part of my defensiveness is that most of these cherry-picking arguments seem to be based on pure speculation. I have not, to date, heard a single specific instance in which UTOPIA has engaged in cherry-picking or exclusive provider agreements. Absent verifiable proof that they have done these things, I’m not inclined to believe they would put the entire project and all of the member cities at such tremendous risk for such little gain.
November 8th, 2007 at 1:50 pm
Interesting discussion, and kudos to Urquhart for asking intelligent questions.
November 8th, 2007 at 2:16 pm
Steve Urquhart says:
I hope you received a copy of my letter regarding this work our Government is doing against Utopia. I haven’t received a response so I figured I’d bring it up here
I’m not the only one in West Jordan concerned with this. There are nearly a dozen of us working to bring Utopia to our city. I am also part of another Grassroots groups pushing it to Salt Lake City.
Like school vouchers, Utopia isn’t going away. It’s important for our economic future. Hopefully we’ll figure that out soon.
November 8th, 2007 at 5:54 pm
I didn’t understand that last comment. Nor did I receive a letter.
Jesse,
In non-pledging cities, UTOPIA can and will force exclusive deals by putting its costs into the HOA fee — effectively forcing consumers’ hands and locking out competition. Developers pay for the installation, and the HOA fee includes a fee for “telecommunications capital expenditures.” Rather than UTOPIA factoring such costs into the rates of its service providers, who then would pass it on to consumers, the amounts are automatically paid by the homeowners (who thereby have been forced into using the service). It’s not speculation. It’s what they are proposing in Elim Valley and Sand Hollow Resort in Hurricane; that is why they are working with Qwest and Broadweave to try and get Hurricane to change its cable franchise ordinance from a build-out ordinance to a cherry-picking ordinance.
It’s not rocket science to put in a FTTH system. The cost of one company doing it will be about the same as another. The differential for developers is the amount of residuals they will pocket.
Though UTOPIA’s original white paper might say something (like they were dedicated to ubiquitous service), the realities are different. The $1,400 number evaporated long ago. UTOPIA’s own numbers through FY 2006 show that it passes 24,000 marketable homes at a cost of $2,921/home. If we were to use an out-of-this-world-crazy penetration rate (at least in areas where it doesn’t have exclusives) of 50%, the cost per home is $5,842.
These are real numbers, but no one is discussing them. It isn’t gratuitous UTOPIA bashing to point out the reality that companies with costs of $5,000/subscriber don’t survive. Maybe municipal broadband is a great idea; in certain situations I could be very much in favor of it. Maybe not. But, as a taxpayer-backed entity, people need to look into the actual details of UTOPIA’s operations. Those details are that it is cherry-picking (and, to do so, is even actively working to subvert existing municipal ordinances that call for uniform and equal services to all residents) and that its best-case scenario costs per subscriber are north of $5,000.
Just like I don’t think I’m attacking, I don’t regard your points as being defensive. We’re just discussing public policy.
November 9th, 2007 at 4:18 pm
Steve, I believe you may be confusing issues.
I only manage the UTOPIA service at XMission and am not privvy to some UTOPIA plans, but to my knowledge, Hurricane is not in discussions to become a “non-pledging” city.
The two developments you’re discussing are privately owned and are paying out of pocket for temporarily idle UTOPIA installation teams to place a fiber network for their residents. This is completely separate from the UTOPIA network and from UTOPIA guidelines. Those developments approached UTOPIA and those installations are not being laid with UTOPIA funds.
I don’t see how anyone could honestly construe these extracurricular developments as “cherry picking”.
UTOPIA remains committed to ubiquity in pledging cities, and has acted accordingly. Once profitable, they will then address bringing the non-pledging cities online as well. As of today, there is not one single UTOPIA installation in any non-pledging city, nor are any scheduled. Nothing has been cherry-picked.
Now, if you take issue with UTOPIA using their resources to install fiber networks other than UTOPIA’s own, well, that’s a whole different ball of wax.
I don’t blame you for confusing these issues. Anti-UTOPIA forces are hard at work to intentionally obfuscate this simple distinction, and are intentionally exacerbating the issue to make UTOPIA appear hypocritical.
November 9th, 2007 at 9:31 pm
I didn’t understand that last comment. Nor did I receive a letter.
Ahh. That would explain the confusion
I’ll repeat part of it here. Basically many of us are concerned that the subcommittee is working against Utopia’s future and thus Utahs future. I attended the October 25th meeting and was stunned with what I heard. The proposed bills do not solve any problems. They create new ones.
Money always comes up as the problem. I asked Rep. Frank why Utopia, the providers or the Utopia cities don’t advertise the service is available. People want options. They simply don’t know because they don’t know where to find them.
People also expect either a free market or protection from abuse. Companies such as Comcast are terminating people’s Internet accounts for using it too much. And those are people who signed up for “Unlimited use for a flat monthly fee” accounts.
Comcast refuses to say what too much is. They will only quote a commercial account which is up to $10,000 to connect and up to $2,000 a month for Internet.
What kind of crap is that? A company with a monopoly shouldn’t be allowed to abuse citizens this way. Utopia gives an opportunity for a free market to come to the Internet here in Utah. Restricting it gives companies an opportunity to abuse people. I’ve documented my personal experience on my blog and I’ve spoken with dozens more in the Salt Lake Valley who have similar experiences. One is an Editor for an Online Salt Lake magazine. He isn’t the only one who has harsh words after the experience.
I’m part of two grassroots organizations. One in West Jordan and the other in Salt Lake City. We believe that like public roads or Airports, the public deserves the same services available in third world countries. If Utopia isn’t allowed to build as makes sense to them, then we need restrictions upon companies like Qwest and Comcast to protect us.
Senator Bennett and Hatch have responded to me with letters about there being laws to protect us from abuse. Even after consulting with two lawyers and the AG’s office, it doesn’t seem there is much anyone can do. Companies can turn off your Internet access for any reason it seems. Even if it doesn’t make any sense.
This is why I’m pushing for Utopia. I’m with Xmission over DSL. An infrastructure that Comcast says is no competition at all btw. Should Xmission begin to abuse customers, we can leave easily. That’s protection against abuse. Companies go bankrupt when customers have a choice.
But then again, DSL and even Comcast’s cable infrastructure doesn’t hold a candle to what other countries are building and we’re fighting about in committee.
I hope we will consider Utopia’s future with this in mind. It’s not perfect and it’s a start up operation. Anyone who has started up a business knows you always loose money in the beginning.
I believe Utopia has a chance for greatness, as long as we don’t get in it’s way.
November 9th, 2007 at 9:59 pm
W.Woodward,
I’m not sure how I can consider UTOPIA anything other than a cherry picker, since it (alongside Qwest, Broadweave and the other cherry pickers) is actively arguing in Hurricane and Washington that build-out franchise ordinances should be changed to allow cherry picking. I’m not sure there can be a much clearer litmus than cherry pickers favor cherry picking.
If we run with the characterization you propose in Hurricane for UTOPIA’s relationship with the developers, that still doesn’t account for Washington — where UTOPIA went in and argued for its own cherry picking franchise (with no developer involved) and seems to have received it.
Paul Morris and Roger Tew of UTOPIA — unless I really misunderstood our conversations — admitted to me that UTOPIA was cherry picking in non-pledging cities in order to grab the easy money. I find this incredible, since it completely undercuts UTOPIA’s arguments that it exists to counteract cherry pickers. If I am right that it is cherry picking (and please do help me sort this out), its message is that cherry picking actually is not a problem at all. But, if cities want to give it taxpayer backing then (and only then) will it build out. That leaves the Comcasts of the world as the only true believers in build out.
November 10th, 2007 at 1:58 am
“Paul Morris and Roger Tew of UTOPIA — unless I really misunderstood our conversations — admitted to me that UTOPIA was cherry picking in non-pledging cities in order to grab the easy money.”
I think you did. I think you confused “non-pledging cities” as “non-pledging member cities.” That would explain your continued inference that UTOPIA is cherry picking locations in UTOPIA member cities, which it simply has never done.
There clearly is no ubiquity in laying private fiber networks in limited areas in cities that are not part of the UTOPIA consortium. Its just an extra gig on the side to pull in a few extra dollars. In today’s economy, most of us can relate to that, right?
If there’s something wrong with doing that, then I’m completely missing the relevance.
I don’t know anything about the Washington arguments, but from the sound of it, they’re concerned about commitment rates for service providers. Offering service to these remote, private fiber nets would have obscenely large startup and overhead costs for any SP. I’d guess Paul was probably looking for ways to guarantee return for the service provider so that someone would actually want to do it.
November 10th, 2007 at 8:08 am
Paul Morris and Roger Tew of UTOPIA — unless I really misunderstood our conversations — admitted to me that UTOPIA was cherry picking in non-pledging cities in order to grab the easy money. I find this incredible, since it completely undercuts UTOPIA’s arguments that it exists to counteract cherry pickers
And companies like Comcast terminating Internet accounts isn’t cherry picking? Sure Comcast provides service in my area. But if I use that service my account is turned off.
A lady the next block over with 9 kids received a call from Comcast the month after me and had her service turned off. Another guy with 6 kids around the block also had the same experience.
We’re using the Internet too much but we can’t tell you what too much is.
Huh?
Private companies don’t have the high ground here I’m afraid. I hope they can come up with a better argument why we shouldn’t have Utopia.
November 11th, 2007 at 10:37 pm
For those of you complaining about utopia’s “cherry picking”, you do realize qwest does the exact same thing? I live in Draper, across the street from ebay, and I cannot get DSL. Qwest refuses to put a dslam in my CO because of the startup costs.
So, I’m stuck with a 100% monopoly from Comcast. My comcast service goes down at least once a week. They have horrid customer service. Average response times to an outage greater than 1 week.
I have Utopia at my office in Murray. It is absolutely awesome. I have more than 12 years in the telecom industry working with DS3’s, T1s, PRIs, the works. All of those services have in my experience worse reliability than Utopia.
My point is, Utopia is already better than the alternatives, so how can anybody argue against it? Even if they cherry pick, which I don’t believe they are, they are cherry picking in cities which didn’t have the political will to stand up to Qwest and Comcast and actually put some money into the project. So the net for that city is they get a section of the city with outstanding services for free. And that is somehow a problem?
By being anti-Utopia you are basically saying “I like paying $10k/mo for a DS3 of bandwidth and poor customer service, and on top of that cherry picking and only providing service to the “good” areas”. Like I told all my friends who voted against Vouchers. Voting against these things is saying “The status quo is good enough”. To fix problems and improve things we have to try something new, if the first new thing we try doesn’t work, then we should try something else. Sitting on our hands and killing every new initiative before it gets started will have us dead last in broadband connectivity, dead last in education, and dead last in competitiveness in the developed world.
November 12th, 2007 at 11:03 am
Tom,
Surely you agree that questions can be asked of an entity receiving taxpayer assistance. I simply raise 2 questions:
(1) Can UTOPIA make it financially or will taxpayer money be used to bail it out? (Its best-possible cost/subscriber rate is north of $5,000. Companies don’t live to tell what happens in that territory; bankruptcy courts tell the story for them).
(2) Has UTOPIA departed from its very reason for being — ubiquitous service? (Yes. It originally declared that it existed to serve areas that cherry pickers wouldn’t. Now, though — as you note — it is doing the exact same thing as Qwest (cherry picking)).
I believe point 2 relates to point 1. UTOPIA is going under, but wants to play out the string a little longer (also, like Qwest). It is looking for communities that will let it ignore poorer, established areas, so that it can cherry pick profits in new, affluent subdivisions where developers will force users to use its system by burying costs in the mandatory HOA fees.
November 12th, 2007 at 12:47 pm
Steve here are your two answers.
(1) I believe UTOPIA is on track with the 20 year business plan. The bigger question that you should be concerned about is whether our country’s infrastructure can continue to fall behind internationally at the behest of protecting narrow private interests? Do you or don’t you believe that excellent infrastructure supports a robust economy? Do you, like your cohorts on the committee, believe that 256K is “broadband” and Comcast and Qwest are doing a sufficient job with high customer satisfaction?
(2) A private developer hiring UTOPIA to wire their gated community ahead of a recalcitrant municipality is not cherry picking in my mind, it is simply giving their residents the best infrastructure available that Qwest and Comcast could use if they could see beyond the goal of captive customers. Legislators who believe Qwest and Comcast’s lies about why they want their own private infrastructure are ill-informed. Both networks have serious technical problems and a lack foresight for the future.
Furthermore, UTOPIA is still delivering ubiquitous service to member cities. Please explain how they have departed from that goal with the footprints and plans they have provided to member cities so far.
What I relish is watching legislators deem UTOPIA as unfair “competition” to Qwest and Comcast when neither entity is barred from using UTOPIA. How much could they save in operating costs if they did participate? The fact is they don’t want to, because they can’t compete on a level playing field, and gullibility for protecting private interests is at an all time high in the GOP.
I look forward to you summarizing your comments against UTOPIA and municipal fiber in your blog Steve. I’m sure many people would find that interesting.
November 12th, 2007 at 9:33 pm
Pete,
First, running a business, I assume you understand numbers. Please explain (with numbers, not hyperbole) how exactly UTOPIA will avoid saddling its pledging cities with financial responsibility. $5,850 per subscriber (even giving it a 50% take rate) is an astronomically high number. The question has nothing to do with whether municipal infrastructure is or is not a good idea. It’s a simple issue of promises and accounting. I would think that proponents of municipal broadband would have as keen an interest as anyone in analyzing whether UTOPIA will make it or go bust. But, you seem more interested in throwing out ad hominems than in discussing financial details.
Second, you’re doing a bait and switch. Of course you can understand that my comments above are not directed at UTOPIA’s activities in pledging cities. They are directed at the company that declared that it needed to exist in order to stop the awful practice of cherry picking, but, now, a few short years later is out cherry picking (in non-pledging cities, if it has to be said again). Why would it do that (if not financial desperation)? If cherry picking by Qwest and others is bad, isn’t it bad when UTOPIA does it?
You seem to take issue with “captive customers.” Nominally, we share that concern. But, again, it does not seem to concern you at all that a developer’s decision to force all future homeowners to pay for UTOPIA’s network through mandatory HOA fees will eliminate those people’s option to choose from far more providers than will be on the UTOPIA system (though, granted, it’d be potentially great for XMission as a UTOPIA provider to eliminate that competition from consideration).
Ya, non-UTOPIA providers could abandon their business plan and jump on the network. Yada Yada. Like UTOPIA (and unlike XMission) other businesses also want to own the network, in part to own all the problems and responsbility.
To answer your questions: we can’t continue to fall behind; I do agree that government is kowtowing too much to special interests (e.g., statewide franchises); excellent infrastructure clearly supports a robust economy; 256K does meet some definitions of broadband, but I’m sure glad I have a faster connection; I don’t know much about their customer satisfaction rates or the customer satisfaction rates with UTOPIA providers, but I’d assume they’re about the same for phone and video, but higher for UTOPIA internet.
I’m curious what your last smug little paragraph means. Of course, you are making a profit off of UTOPIA, and others have a simplistic Harold Hill infatuation with UTOPIA that would deem any and all non-scripted questions off limits. But, I’d guess most people would think it’s okay to probe whether there will be a call on the taxpayer backing. That’s what telecommunications-savvy bondholders would be doing, if UTOPIA could have convinced any that it was creditworthy, instead of going to non-telecommunications-savvy politicians.
And, again, I’m surprised you don’t have the least bit of curiosity why UTOPIA is now cherry picking. I seem to remember you getting pretty wound up about the issue a few years ago when talking about Qwest doing it. Was it not bad then? Is it not bad now?
November 13th, 2007 at 10:20 am
First, running our government must give you some understanding that it can’t be run like a business. You speak as if there are no underlying costs towards building a massive infrastructure and fiber delivery is the same as plopping a TiVo on your doorstep. Would you be angry in 1960 that there were no overnight delivery services on our federal highways yet? Would you be calling the interstate a failure because the cost of delivering a road to a farmer was astronomical then? How much direct profit have the highways generated vs the trillions of direct tax expenditures our country has put into them? Lets shut that sinkhole down! It isn’t operating like a business!
Contracting with UTOPIA to deliver services is not cherry picking. Why are you against a private developer doing this? How are customers captive if UTOPIA allows anyone to provide services on their network? Right now they can choose between four providers. The other “major” providers aren’t playing because they want their own sandboxes. Again, I challenge you to show me where cherry picking is happening in member cities. If you can’t do this, then you have no basis for the accusation, because private contracting for private developments that happen to reside in non-pledging cities isn’t it.
Yes, “Yada yada.” There are no efficiencies to be gained by sharing infrastructure and somehow cable, wireless, and copper can beat fiber in the physical realm. All so easily swept under the table when it comes to listening to Comcast and Qwest wax poetic about their superior service.
Steve, sometime you should come see my books on UTOPIA. Could it be that your statement was a tad bit presumptuous? I’ve spent more money than I’ve earned and it hasn’t been a profit center for my business. Why then do I continue? Because I know it is a sound idea. A sound idea that the Utah taxpayer hasn’t spent a dime on yet.
This is yet another power struggle with the legislature. Why do you think you can make decisions better than local governments? If the Feds came in and did this to the state’s decision making, you’d be howling to high heaven about states’ rights. Is turnabout not fair play anymore?
You seem diametrically opposed to UTOPIA. If we can’t continue to fall behind, how exactly do you propose we get ahead? My last paragraph was challenging you to make your views more well known. I haven’t been shy about my support on my blog, I don’t think you should keep your wisdom confined to here when you have a podium of your own. Why no page on Politicopia?
November 13th, 2007 at 7:57 pm
First, running a business, I assume you understand numbers. {snip} The question has nothing to do with whether municipal infrastructure is or is not a good idea. It’s a simple issue of promises and accounting.
I was great in Math class. But I presume you’re talking about basic math not Trig or Calculus
If I read you right, it sounds like the issue here is simply whether Utopia will live or die (and thus saddle cities with problems). Rep. Craig Frank mentioned the same thing and I respect that. We must be financially sound if we do this at all.
This means Utopia needs more subscribers to make the numbers work. Not happening without some advertising IMO.
Rep. Frank mentioned he would ask the question of who’s responsible for getting the word out. Utopia? The Cities? or how about the providers on Utopia? If only 16.4% of those who could signed up on Utopia then we have a problem (Rep. Frank’s number btw).
Advertising should solve that problem. I mean, how many people have you met tell you Comcast or Qwest are number 1 and they are totally satisfied? Perhaps 1 in 100 if you’re lucky. The day we returned our Cable Modem to Comcast we found their office lobby packed with people also returning hardware. Yes I asked, all were very upset with the company. Only one was there to pay a bill. Some even received “The Call” telling them to stop using the Internet so much.
I would think that proponents of municipal broadband would have as keen an interest as anyone in analyzing whether UTOPIA will make it or go bust.
I don’t think you’ll find proponents hoping it will go under
If there is a problem with financials then let’s fix it instead of proposing bills that hurt their ability to hit their numbers. That was my impression sitting in the audience for the October 25th meeting. I couldn’t believe what I was hearing.
{snip}
Second, you’re doing a bait and switch. Of course you can understand that my comments above are not directed at UTOPIA’s activities in pledging cities. They are directed at the company that declared that it needed to exist in order to stop the awful practice of cherry picking, but, now, a few short years later is out cherry picking (in non-pledging cities, if it has to be said again). Why would it do that (if not financial desperation)? If cherry picking by Qwest and others is bad, isn’t it bad when UTOPIA does it?
I would be interested in following up with your sources on this. I’ve heard people say it but not back it up.
On the other hand, companies such as Comcast terminate Internet access if you use it too much. They also state there is no monthly consumption limit but stop using it so much.
Is this not also “cherry picking”? We had Comcast four years btw. Same Internet traffic all that time. We purchased originally a 3 meg pipe which they upgraded to a 6 Meg pipe. The advertisement said “Unlimited use for a flat monthly fee”. I believe “Cherry Picking” is a good description of what happened here. If Utopia is not the answer then I’m curious what you suggest as a solution? Regulation of the market?
Oh and btw, you are terminated for 12 months and they will refuse service during that time. I call that outrageous! You get one phone call then you’re gone (we called Comcast Customer Service and they said the call was a prank.. they don’t terminate accounts after all… Yeah right).
{snip} But, again, it does not seem to concern you at all that a developer’s decision to force all future homeowners to pay for UTOPIA’s network through mandatory HOA fees will eliminate those people’s option to choose from far more providers than will be on the UTOPIA system (though, granted, it’d be potentially great for XMission as a UTOPIA provider to eliminate that competition from consideration).
Ya, non-UTOPIA providers could abandon their business plan and jump on the network. Yada Yada. Like UTOPIA (and unlike XMission) other businesses also want to own the network, in part to own all the problems and
responsbility.
Are you suggesting they cannot connect to Utopia’s Infrastructure AND maintain their current Infrastructure?
They are after all trying to saturate Utah with an outdated technology developed in the late 1880’s while the rest of the world moves ahead. Also, I remember reading in history class about how life used to be. Working at a company you had to use their private roads and purchase products at the company story (Yada Yada). Good thing life isn’t like that anymore eh?
The point is we have a free market for most goods and services. If the Internet is important to our countries future, can we really depend on any private company to fill the need? Everyone is in business to make money, not provide service or solve problems.
To answer your questions: we can’t continue to fall behind; I do agree that government is kowtowing too much to special interests (e.g., statewide franchises); excellent infrastructure clearly supports a robust economy;
I can get you in touch with people who have had their Internet terminated over the last year here in Utah and other states if you would like to speak with them. We are examples of what catering to statewide franchises have done. Including an Editor for a Salt Lake online Magazine.
From my perspective Utopia would enable small businesses such as my wifes to compete in the world and bring in additional tax revenue to the city. I’ve spoken with the Mayors of Midvale and Murray and they agree that Utopia is the economic shot in the arm they need to move forward.
256K does meet some definitions of broadband, but I’m sure glad I have a faster connection; I don’t know much about their customer satisfaction rates or the customer satisfaction rates with UTOPIA providers, but I’d assume they’re about the same for phone and video, but higher for UTOPIA internet.
256K was the broadband definition 15 years ago but today it’s only considered broadband in America. Even the FCC is talking about increasing the definition to 2Meg as the minimum to be considered broadband. I’ve been watching this with great interest.
I’m curious what your last smug little paragraph means. Of course, you are making a profit off of UTOPIA, and others have a simplistic Harold Hill infatuation with UTOPIA that would deem any and all non-scripted questions off limits. But, I’d guess most people would think it’s okay to probe whether there will be a call on the taxpayer backing. That’s what telecommunications-savvy bondholders would be doing, if UTOPIA could have convinced any that it was creditworthy, instead of going to non-telecommunications-savvy politicians.
That’s where people like me come in. Non-tech savvy people come to people like me asking questions (I have over 20 years professional experience in the Industry). But as you said earlier it’s not the tech that’s the problem… it’s the money. That’s easier to fix. Installing crappy tech, that’s harder to fix
And, again, I’m surprised you don’t have the least bit of curiosity why UTOPIA is now cherry picking. I seem to remember you getting pretty wound up about the issue a few years ago when talking about Qwest doing it. Was it not bad then? Is it not bad now?
Again I’m curious about your sources. Thanks in advance. I’d love to catch up.
Oh and if you are interested in learning more about what “cherry picking” companies like Comcast are doing, visit my blog. I keep it clean and I have tried to document
everything I can prove. I wanted to make it an open book.
After re-reading this I realize I’m sounding adversarial. That’s not my intention. I simple want our Representatives in Government such as yourself to understand if Utopia isn’t the solution then we need something else to protect Citizens from being abused in what I see as a big loophole here. I’ve even had legal representation seek me out however I don’t believe going to court over this is the answer. We’re hopefully mature enough to bring up issues and talk about solutions
Regards.