BREAKING: Orem votes no on Macquarie’s Milestone Two for UTOPIA

Orem city logoOrem voted 6-1 to reject Macquarie’s proposal for the UTOPIA network. Orem represents 18.7% of the total addresses covered by the network. Midvale, West Valley City, Layton, Tremonton, and Brigham City have all voted yes while Payson, Lindon, Centerville, and Murray have voted no. A vote from Perry is expected tonight as well and they are expected to move forward, though the city accounts for slightly less than 1% of passed addresses. The total addresses that will be covered under Milestone Two stays at 51.8%, though Perry could nudge it close to 53%.

While the deadline for response to the Macquarie proposal is Friday the 27th, cities may still be able to work on a deal with Macquarie to get fiber infrastructure in their cities. It’s very likely, however, that the cost will be higher and they will be at the end of the line for construction. Macquarie has enough cities interested in Milestone Two to move forward with the proposal which should take about two months to complete. At that time, the cities who opted in will have the chance to review and vote on it. Upon acceptance, Macquarie is going to stick to an aggressive 30-month build plan.

Tagged , , . Bookmark the permalink.

36 Responses to BREAKING: Orem votes no on Macquarie’s Milestone Two for UTOPIA

  1. Kellie Johnson says:

    According to Councilman Spencer in phone conversation with my mother they think they will get a better offer after a decade of money for nothing! All those who voted no will never get our vote again.

  2. Greg says:

    For some reason I thought there were 4 milestones before the build-out. From what I’m reading there it sounds like the next mile stone is the final offer before the build-out, is that correct?

    • Jesse says:

      Correct. MS1 was to get high-level details. MS2 gets the final contract. MS3 builds the network, and MS4 operates/maintains it.

      • Drew says:

        On this note, by not participating in MS2 (yet?), I believe that Orem now has the option to officially submit a RFP (request for proposal), which was another major hangup for the council members/mayor.

        It makes sense that they want to be able to compare apples to apples with additional bids. They’re now well versed in much of the lingo and technology, so they’ll likely be able to process them quickly (if there are actually any bids made public). Hopefully anyway…

      • Greg says:

        As a follow-up question. Since there are only ~53% of the households as the original proposal, is it safe to assume the build-out will take less than 30 months? Or are they sticking to that time-line and as it stands the cities will wait longer to get their build-out complete?

  3. Jink says:

    Who was the one voice of reason? Black?

    • Jesse says:

      No clue. I got the vote count, but how each vote went.

      • Jink says:

        I’m having a difficult time seeing any good-faith rationale for the six who voted no. You have any thoughts? Oh, and thank you for your hard work on this issue.

        • Jesse says:

          I hear they’re hoping for a better offer down the road. If there’s any proposal better than one that pays for itself AND part of the bonds, you’d have to wonder why it hasn’t already come out of the woodwork.

          The biggest problem is that the entire discussion centered on the costs with very little mention of the revenue potential. That sank it.

          • Richard says:

            Correct. They would like to follow an RFP model where others have a chance to offer the city additional options. If I recall, Macquarie was not opposed, but an RFP process will take years.

            Personally, I plan to engage with the city council and ensure they propose a schedule within a few months to drive the RFP process, so they just don’t just put it off while they wait for “two in the bush.”

          • Jink says:

            Yeah, but given that they would have been aware of those facts (even if their moronic constituency was not) all I can think is that they were cowardly, on the take from other vested interest(s), or think they have some sure thing lined up they can’t talk about. When people like Brunst completely ignore the chamber of commerce’s unanimous vote in favor of a “yes” vote then that begins to smell funny. Thoughts?

            • Jesse says:

              I’ve heard Brunst has tried to get into the ISP business a few times. I don’t doubt that he has a bit of self-interest involved here. John McClain was right: it’s about the money.

      • Drew says:

        Yes, Black was the sole vote to continue to Milestone 2, which surprised me – I was sure there would be at least 2 or 3.

        • Richard says:

          She has guts, but I knew that before. I was most impressed with Mr Seastrands approach even though he ultimately voted No.

          • Jink says:

            What impressed you about Seastrand?

            • Richard says:

              His discussion focused on the things he heard and how folks felt from both sides of the argument. He also demonstrated that he had a good grasp of not only the technical side of things, but also the sentiment and concerns of those who contacted him. I don’t feel he went into the process with his mind made up, but arrived at a conclusion.

              Some of the others, not so much.

        • John says:

          Good for her! I’m in her district.

    • John M. says:

      Yeah, it was Margaret Black. She was the only one focusing on the potential revenue that ubiquitous roll out would give the city and the benefits to the people of Orem. All the other members of the council focused on the Utility Fee. Many were very concerned with the wording in the existing documentation around the collection of the Utility Fee.

      Many of the members of the council expressed interest in rolling out fiber to the rest of the city, but they wanted to do it with an RFP to make sure they were getting the best deal they could.

      As a resident of Orem that has never had access to UTOPIA, I’ve pretty much lost hope in getting fiber to my house now.

      • John says:

        I’m glad to hear she was bringing that up. I asked about that in the open question session of the first information meeting. The mayor also mentioned that there were other offers “on his desk” in a conversation afterward (though who knows what that could entail).

        I’m encouraged to hear that other council members expressed interest in completing the network.

        • Jesse says:

          I’m sure that most of the “other offers” are akin to what Provo received: “we’re pretty sure you’re desperate, so we’ll happily let you give us a multi-million dollar asset in exchange for, well, not much of anything, really”. If there were a single credible offer in that stack (much less one that would be subject to this much public scrutiny before demanding a council vote), I’d be shocked.

    • Bob Myers says:

      Yes. Black was the only “Yes” vote. Figures.

  4. Richard says:

    I attended tonights meeting in Orem, and while I’m personally disappointed with the outcome, I think there are some important things to take away.

    Opponents to UTOPIA did an outstanding job of identifying areas of confusion that they could exploit. For example:

    - Mandatory utility fee as removing freedom to choose
    - UTOPIA/Fiber is just another competitor like comcast or centurylink and the government shouldn’t compete against them
    - Rapid technology advances will make fiber obsolete
    - I already have internet and my grandkids use it just fine
    - And paraphrasing here, my freedom from government intrusion is more important than overall cost savings.

    Those of us who are strong advocates of UTOPIA could easily shoot down all of these arguments. But but those opposed simply out organized, out spent, out advertised and got the word out to a very large, very vocal group, young and old.

    The most fascinating aspect was so many people making arguments about being freedom loving, property tax increase busters who spoke passionately about not having enough detail to make a good choice, and therefore we should NOT proceed to milestone two. Does not compute.

    • Jink says:

      Critical thinking is, sadly, not a highly valued skill in these parts. Also, centurylink cash buys a lot of “four legs good, two legs bad”. Here I had high hopes for Orem becoming a genuinely interesting and vibrant place to live. Deeply disappointed. Who of us is willing to run for the next open council seat?

    • Mike says:

      Richard,

      I’d say exactly the same thing about the Payson meeting a couple of weeks ago. I’m still trying to get an answer from the city council about the amount owed for operating expenses in Payson. If I could get that, I’d have a really strong argument for them to reconsider.

      Cities really need to reconsider before the end of Milestone Two; otherwise, they will have no chance of any say, and will only be able to ask to get on the train, without any say in the terms. That alone is a bad deal. On the other hand, I suspect that Payson in particular may want to see the details of Milestone2 without having to pay the “engagement fee”; they may think they are getting the best of both worlds, but as Jesse has said, they will likely be moved to the end of the construction line (which Payson may not mind: that way they get to wait 3 years before anyone has to pay anything (30 months + the 6 month “grace” period = 36 months).

      The thing that concerns me is the possibility of being made to pay more to get in on the deal after the fact, though I’m not sure how that would work. Perhaps Jesse has some insight that he’d care to share?

      • Jesse says:

        It’s pretty simple: Macquarie can get a better deal with a larger plan all at once. Anyone who isn’t in on MS2 wouldn’t be able to take advantage of that “volume pricing” so to speak (including favorable bond rates), so their costs go up. How much? We don’t know until a city comes in later. Which they will, when they get their “pay or go dark” bills.

      • George says:

        Total bond: ~$5,000,00.00 (includes swap)
        Operational Expenses: ~$155,000

  5. Drew says:

    What I hope this (in)decision leads to is Orem City committing to “provide choice” to those who want fiber to their homes.

    I also attended the meeting and I plan to write to the council (again) and encourage them to come up with a plan/roadmap to get the fiber in Orem up and running in the same 30 month timeframe that Macquarie is planning. Otherwise they’ll be watching lots of tail lights (business and residential).

  6. Michael says:

    “Macquarie has enough cities interested in Milestone Two to move forward with the proposal…”

    Did Macquarie say this? How certain is this?

  7. Anonymous says:

    Senator Valentine showed up to spread some FUD.

    He talked about potential legal issues, and quoted some law about cities not giving preferential treatment to one provider over another. I can’t imagine anybody successfully using a law like that to prevent a UTOPIA build out since by its very nature, all providers that are willing to follow the rules are welcome, including the incumbents.

    He kept referring to SB190 as if it were law, saying things like “I carried SB190 for this very reason” and so on. I don’t know what the point of mentioning a bill that didn’t go anywhere would be except to spread FUD.

    I look forward to reading the meeting minutes to pick apart his other concerns.

    • Drew says:

      I didn’t feel like Senator Valentine’s comments were pushing towards a “No”. Rather I felt he was raising valid concerns… However, the legal issues WILL be addressed in MS2. So I find myself confused.

      Macquarie won’t do it if it’s not legal (at least that’s what they said during the June 19th Orem meeting).

      I’m still feeling disappointed that the council voted “No” to “more information”. I suppose they’ll find out in a few months one way or another. Or maybe another 27-30 years.

  8. Kerry S says:

    I am really disappointed in the decision that Orem made last night. I figured I could have saved approximately $50 per month by going with one of the UTOPIA providers by switching my Phone & Internet service to them and still pay the utility fee and come out ahead. People just couldn’t understand that there would probably be a savings for everyone even it they only signed on for phone service and with that savings they would be able to cover the fee!!
    It was like they had blinders on. The UTA (aka CenturyLink) did a very good white washing job. Before all this started I was looking into having it installed to my home via UIA. I found out today that there is a freeze on all residential construction of new fiber being brought to the home while Milestone 2 was being considered. Does anyone know now that Orem has opted out will that open back up or are we just out of luck??

    • Jesse says:

      It’s all up in the air. My guess is that Orem will put out a weak RFP, get a bunch of terrible responses, and then realize that Macquarie was the best option on the table. By that time, they will have gotten the bill for their share of UTOPIA costs and probably pay it since going dark would make a lot of residents and businesses very angry. I don’t think I’d count on getting hooked up in anything less than two years now.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>