One of the more interesting parts of UTOPIA’s new plans via the Utah Infrastructure Agency (UIA) is to have cities start taking over billing operations directly. In the past, service providers operated all of the billing and then remitted payment to UTOPIA for the wholesale transport. That arrangement works well for most providers, but every now and again, you get an Mstar that racks up a huge debt to UTOPIA. While the step to diversify the video offerings so that no provider can hold triple-play over their head, it only gives UTOPIA a hammer to cut off the deadbeats, not a way to get their money. So, in an effort to make sure that UTOPIA always gets their cut and isn’t giving any provider a free loan, it looks like they’re going to consolidate billing into the UIA which will then disburse the money to both UTOPIA and the service providers.
I have some mixed feelings on this. Sure, it sucks when a crappy company like Mstar takes the network for a multi-million dollar ride. And it would suck if a company decided to not pay their bills for a month or two and leave UTOPIA holding the bag. I can certainly see how this improves the cash flow on their side. On the other side, billing is a way for providers to differentiate their customer service. I know a lot of people who have sworn off Qwest because their bill couldn’t ever come out quite right. I also wonder if providers will be hot on the idea of a third-party provider collecting the money and delaying the cash flow on their side. It also raises the issue of what happens when there’s non-payment by the customer. Instead of the provider having to pay UTOPIA anyway while they seek payment (or, more likely, shut off service), UTOPIA is left holding that bag. Granted, it’s a lot less than if a provider stops paying their bills, but it’s something worth thinking about.
In any event, this seems like an overall positive move with a few caveats. If nothing else, UTOPIA is working its tail off to try and protect itself from these kinds of financial problems.