It shouldn’t be any surprise that the Utah “Taxpayers” Association can’t quite bring themselves to stick to facts, instead resorting to the time-tested tools of fear, uncertainty, and doubt to prop up their weak cases. In the July newsletter, the UTA decides once again to lay into UTOPIA and directly address some of my points on defining UTOPIA’s success. Unsurprisingly, they very much missed the mark yet again.
Let’s start, shall we? UTA says:
At a June 16 tour of the UTOPIA facilities, UTOPIA’s executive director Todd Marriott confirmed our prediction.
UTOPIA says they told the UTA about the bond issues back in December. UTA chose to sit on the information until it was politically convenient to run with it. They can pretend not to have known about any bond issues until now, but UTOPIA reps say otherwise. If the UTA is really looking out for taxpayers, why would they have sat on this information for over 6 months?
Savings generated by UTOPIA’s customers do not reflect UTOPIA’s success, any more than the con-sumers [sic] who saved by buying a DVD player at Circuit City rather than Best Buy reflected Circuit City’s success: Circuit City is still bankrupt.
The analogy here doesn’t make one lick of sense at all. If a consumer saves $10 per month in telecommunications costs because of the presense of UTOPIA, not necessarily because they subscribed to services over the network, and ends up paying $6 per month in new property taxes to support it, are they not up on the deal? I may not have some fancy title to my name, but I do understand basic math and I do know that 10 minus 6 is still a positive number. How does the UTA figure that there is still a net loss to each household in the served cities? I’d like to see that math.
For example, FreeUTOPIA notes, Provo and Orem claim using the municipal telecom network saves them several hundred thousand dollars per year. There is substantial reason to question these claims. As vocal supporters of municipal telecom, they have a vested interest in these claims.
Maybe so. But it also happens that this claim was made in the consultant’s reports to Provo City and in the rebonding hearing in Orem on 5/2/2008, respectively. Both claims can be very easily verified by asking for the budgets of the cities before either network was built and comparing. The UTA can very easily do this legwork to prove or disprove the claims. They have either chosen not to do so for fear that it will be proven, or they have done so and don’t want to be proven wrong. In either event, their actions only lend strength to the claims even if they choose to pull a Mandy Rice-Davies.
UTOPIA and backers like FreeUTOPIA also point to the “level of competition” UTOPIA creates. By this theory, UTOPIA lowers the price and increases the service all customers receive, not just those who purchase UTOPIA services.
Except that it’s not theory. It’s stone-cold fact that the presence of additional providers lowers pricing.
When cities build and operate their own golf courses, they are subsidizing one recreational activity at the expense of everyone who doesn’t golf, not lowering the cost of golf or increasing golf service.
UTA again misses the mark entirely. Golf courses are not an open infrastructure to be used by private companies to provide services. They are a vertically integrated monopoly of both facility and service. UTOPIA provides the facility and expects private companies to figure out how to provide a service. Many of them already have with great success. Additional companies are signing on to provide services via UTOPIA on a regular basis.
And now where the UTA goes off into Crazytown:
And if government creating competition by providing the service directly is good for telecom, why stop there? Why not have the city sell legal and accounting services to the public? Certainly those are critical goods that every business and taxpayer needs. And given the reputation of lawyers and accountants, it’s clear that most people want better legal and accounting services at a lower price. Cities could “increase competition” by providing these, and any number of other goods and services. It’s hard to believe UTOPIA and its backers will be asking cities to form municipal law and account-ing [sic] firms.
Again, we see an analogy that has very little to do with, well, anything. By engaging in absurdly extreme examples of government-provided services, the UTA has only managed to harness a level of crazy normally reserved for talk radio. Whether the UTA likes it or not, telecommunications has been deemed a critical service for purposes of public safety and economic development. That’s been the way it has been for a hundred years. We chose to develop this critical infrastructure by pouring money into incumbents and shoring them up via exclusive franchise agreements and regulation that discourages new market entrants.
Waitaminute… that sounds suspiciously like government choosing which private enterprise will succeed or fail, yet the UTA is deafeningly silent on this matter. Is it possible that they support the corporate welfare of the Universal Service Fund, exclusive franchise agreements, and cumbersome build-out requirements? Given the money flowing from incumbent providers to their coffers, I’d say that all signs point to yes. The UTA needs to revisit its own hypocrisy on supporting “free” markets.
When government builds a road, why isn’t the UTA protecting us from government monopolies? Why aren’t they cheering for private companies to deliver the roads? In fact, they don’t even think roads are a function of local government!
[C]ities provide police and fire protection, define and enforce property rights. Going beyond that mandate means cities are picking economic winners and losers, and they lose their authority as neutral arbiter.
So roads, water, sewer… those are all outside the “proper” role of city government? Based on this statement, the UTA seems to think so. This would explain why when a city attempts to build a 21st-century road, a fiber-to-the-premises network, they are up in arms. Yet where is the outrage over government monopoly on these other services? It is conspicuously absent. Indeed, something more is at play here.
Everyone who has fol-lowed [sic] this story knows UTOPIA’s cities may have to pay as much as $504 million over the next 33 years.
May. In a worst-case scenario where UTOPIA can’t make any of its bond payments from revenues. A scenario that everyone but the UTA is certain isn’t likely to happen. When UTOPIA’s budget and finances become public this month, we’ll see how short they are. If the UTA continues to tout the worst-case scenario at that point, once it is proven to not be the case, they are doing nothing but fear-mongering with zero basis in fact.
Because these cities only have authority to increase their property tax revenue-they can’t raise their sales tax rate, and they can’t raise personal spending-replenishing these pledge accounts means either a cut in services or higher property taxes.
Sure, they may have to raise property taxes to cover the shortfall. The question, though, is if those property owners are going to end up paying more in property taxes plus telecommunications costs or not. Orem is saving enough on telecommunications costs to pay for half of their pledge. The average telecommunications bill per household is around $200 per month. If we assume even a 5% reduction in bills due to competitive pressure and 30K households, Orem residents are saving around $3.6M per year in telecommunications costs or more than $300K per year more than what the full bond payment amount is. Granted, I’m doing some extrapolation, but I’m also using a VERY low-ball figure. So even if property tax rates have to rise, residents are still up on the deal.
Because UTOPIA is a government entity, it does not pay property taxes.
I’d like to see what kind of property taxes the incumbent providers are adding to the tax base. Because, again, residents may be up on the deal even in a worst-case scenario. Let’s crunch some real numbers instead of using vague statements.
Even worse, by not paying property taxes, UTOPIA lowers the amount of money Utah has to spend on education. In a state that is already lowest in the nation in per pupil spending, UTOPIA is adding insult to injury.
Uh… didn’t the UTA recently claim that increased per pupil spending has had little-to-no effect on education outcomes? In fact, they did so in their May newsletter. Either they have had a change of heart in very short order or, again, they are showing glaring hypocrisy. I vote for the latter.
UTOPIA and its backers also argue that your Taxpayers Association ignores the economic stimu-lus [sic] UTOPIA offers. They share anecdotes about companies who stayed in or moved to a UTOPIA city because of UTOPIA.
It’s more than anecdotes. Flying J moved their corporate headquarters out of Brigham City specifically because of a lack of broadband. That move cost the city millions in lost revenues and was the driving factor in deciding to join UTOPIA.
The UTA has demonstrably distorted reality throughout their entire grammatically-challenged diatribe without offering a single concrete solution of their own, much less acknowledging the sad state of telecommunications in this country. They do nothing to advance the dialog with their ill-informed half-truths and instead provide only screaming inconsistency tailored to appeal to emotions rather than cold, hard facts.
Let it be said that I challenge any representative of the UTA’s choosing to a public debate on the status of telecommunications in this state and in this country. Like UTOPIA’s Todd Marriott, I challenge them to provide input in the discussion instead of sniping from the sidelines for their overlords at Qwest. Most of all, I challenge them to stop using fear, uncertainty, and doubt as their only tool and instead discuss the facts, even the ones that completely fail to support their case.