One of the big obstacles to Macquarie moving forward has been the lack of a binding public vote option. After the craziness in Orem with a citizen referendum overturning council action, I can’t see that they would be too keen to make a contract that can be unexpectedly nullified. Unfortunately, Utah Code doesn’t allow for such a thing… yet.
Rep Patrice Arent (D-Millcreek) is sponsoring HB275 which would allow for non-binding public questions to be added to ballots. While this wouldn’t be more than a poll in its current form, it’s not impossible that it could be extended to include the kind of binding vote that Macquarie is looking for. It’s probably too late to make those kinds of changes now (the best time to start on a bill is about six months ago), but passing it could lay the groundwork to extend it in the 2017 session.
My advice? Start contacting Rep Arent a few weeks after the session is over to see if she’s willing to run with it.
After two years of searching, UTOPIA has announced that Roger Timmerman will be returning from Vivint Wireless to be the new executive director. You may recall that Roger was involved both with UTOPIA and iProvo since the early days (2004, to be exact), so he’s bringing a pretty deep understanding of both fiber and municipal networks to the table. I was sad to see Roger go (and you all know how I feel about Vivint), so I’m glad to have him back.
With UTOPIA reaching operational break even and starting to build more network in more places, now is a good time to have someone back in the captain’s chair. I hear that in addition to expansions in Midvale, West Valley City, and Layton, the city of Perry is getting a full deployment. Orem also has new councilmember (and UTOPIA supporter) Sam Lentz as their member of the UIA board, so it’s possible that there may be some movement there as well.
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Word is coming in that UTOPIA customers on the 100Mbps tier are about to get a very nice present: a free bump to 250Mbps. SumoFiber has already updated their website to reflect the change and other providers are expected to follow suit soon. This counters the fastest tier that Comcast has been able to offer (before their fabled 2Gbps vaporware tier materializes) with 5x the upload and blows way past the horrifically antiquated ADSL2+ tiers that CenturyLink hasn’t updated in many, many years.
This highlights the power of using a fiber network. When you need more speed, you flip a switch and maybe upgrade some electronics. CenturyLink is still years from offering any significant fiber deployments (outside of heavily cherry-picked areas willing and able to pay big bucks) and Comcast is still having trouble getting DOCSIS 3.1 rolled out in any significant volume to deliver anything approaching what UTOPIA is doing now.
If you’re on UTOPIA, have you already gotten the speed bump? Sound off in the comments.
I had the opportunity last week to speak with Gary Jones and Kim McKinley from UTOPIA to get an update on where things stand. It seems like the main reason UTOPIA has been out of the news is that nobody wants to report on boring good news. Here’s a quick bullet list of the things you should know (with, you know, my standard commentary):
- UTOPIA has been growing revenues at the rate of $10K/mo for over 3.5 years now. Most of that has come from the board mandate to aggressively pursue business customers. Almost every business service area in UTOPIA cities now has the network available, so most growth will now have to come from residential footprints.
- Residential footprints are getting built out in Layton, Midvale, West Valley City, and Tremonton using a combination of RUS settlement funds and the remaining $24M from the existing $65M UIA bond. Priority is being based on footprints with strong demand. When two footprints have the same demand, the city with the lowest amount of completed network gets priority.
- All new construction is covered by subscribers footing the bill just as it has been for the last several years. This shifts debt burdens away from taxpayers as a whole. Most footprints are seeing around a 25% take rate for services, exceptional considering that they have to bear the cost.
- There’s nothing official yet, but operational expenses are very close to a break even point. UTOPIA will announce when that point is hit. Once that happens, there will be money to start paying bond interest. That may prompt cities to consider bonding for more construction money to be paid for entirely by subscribers.
- Cities are finally past the “raking UTOPIA over the coals” stage and are starting to be more active in figuring out how to improve operations. Murray undertook an effort to reconnect homes that, while it didn’t accomplish its intended purpose, did improve revenues from that portion of the network. Payson has even started showing up at board meetings again with regularity. Even Orem, a city with some, er, “colorful” comments from candidates and elected officials seems to be turning a corner and is likely to elect at least one member who is ardently pro-UTOPIA.
This is the kind of boring, steady improvement that doesn’t make newspaper headlines. Heck, the Utah Taxpayers Association has been mum because they haven’t figured out a way to spin it into a new hit piece. (Also, because Royce Van Tassell is out and he seemed to have some kind of personal beef with UTOPIA.) These small careful steps are likely to be the future of the network, not some crazy moonshots.
In a 4-0 vote (one council member was not present), Perry opted to move forward with Macquarie’s Milestone Two proposal for UTOPIA. This brings the final total of addresses participating to just shy of 53%. Each city who opted to get the full proposal will still need to vote to accept it once it’s completed. All UTOPIA pledging cities have had a chance to vote on the proposal before the June 27th deadline to respond.
I honestly did not expect this. Despite being one of the few cities with a near-complete network, Tremonton voted 5-0 last night to move forward with Milestone Two. This makes the tally so far four in favor (including Midvale, West Valley City, and Layton) and one against (Lindon). Votes are still scheduled in Orem, Centerville, and Murray. Payson and Brigham City have both been discussing it, but Perry has been pretty quiet.
If you live in a city that hasn’t voted, there’s still time to talk to them and urge them to move forward with Milestone Two. Check the list of events to get an idea of the when and where of what I know or contact your city directly.
UPDATE: Payson votes tonight at 6PM.
In a live news conference this morning, City Manager Wayne Pyle announced that the city is working on a partnership with Ooma to provide free phone service to every resident of West Valley City. Residents would be responsible for taxes and fees and there is also a charge to port an existing number. The city projects that the partnership would save residents around $20M per year in telecommunications costs. This service will ride on top of the completed UTOPIA network assuming that the city council accepts Macquarie’s offer when the Milestone Two report is complete. While this deal seems to apply only to West Valley City, it will be interesting to see if other UTOPIA cities try to get in on that action.
This only highlights the immense brand power of a ubiquitous fiber network in a city. It also gives Google Fiber a bit of a black eye since they have no phone product at all.
UPDATE: Here’s the press release.
Layton joins Midvale and West Valley City in voting yes to move forward with getting final details of Macquarie’s proposal under Milestone Two, the third city in a row to do so. For those keeping score, this means that all of the cities who have voted on the proposal have chosen to get more details. Given that there’s
no little commitment to do so, it’s a wonder any city isn’t interested in say “yes, please, give us the finalized details”.
The next scheduled votes won’t be until the final week to respond, so it’ll be really quiet. In the meantime, there’s a lot of public meetings you can drop in on to show your support. Also make sure that your city councils are hearing from you that they should move forward with Milestone Two.
In a unanimous vote, Midvale becomes the first UTOPIA city to choose to move forward with the proposal from Macquarie. Milestone Two will hammer out the fine details of the proposal to build, maintain, and operate the network for 30 years. The city will still need to vote to accept that finalized and detailed offer when it is completed.
Other cities are still taking feedback on the high-level overview presented in Milestone One. Murray will have an open house June 5 at 6:30PM. Centerville and Lindon both submitted detailed lists of questions and got public responses to all of them. This is shaping up to be an incredibly open process, a stark contrast to a UTOPIA that was scared to discuss anything in public for fear of being attacked again.
Keep your eyes open for postings about more upcoming votes and remember, the votes are just to move forward on getting fine details.
Macquarie has let their proposal out and it looks like they’re planning to make good on many of the rumored details. There’s also a number of very attractive points that will make this an easy sell for new cities to join. Some highlights:
- The network build will be done in existing pledging UTOPIA cities in 30 months.
- The fee will be $18-20 per month per
subscriber address with a 50% discount for MDUs and a 100% premium for businesses. This amount will be indexed.
- Utility fees will have a grace period of 6 months from construction to allow ISPs to hook people up.
- The free tier of service will be 3Mbps symmetrical with a 20GB monthly cap. All service providers must agree to offer it as a condition of being on the network.
- Cities stand to earn between $1.0B and $1.5B depending on the take rate. That’s 2-3 times the existing debt service. On the low end, it would drop the Macquarie fees by almost half. On the high end, it could almost entirely cover the Macquarie fee.
- Speaking of revenues, the cities stand to rake in another $100M annually when the network reverts to their control in 30 years.
- Macquarie will be aggressively promoting the network and intends to extend it to any city that wants to accept its terms. Cities without existing debt service may end up making a good bit of money on the deal.
The worst case scenario is that it is a wash with what they have now except the network gets completed and everyone gets free service. In the best case scenario (which I still this is a little too conservative), they end up paying almost nothing for the network. I’ll just come out at say it: any city council that doesn’t move forward on this deal is committing an act of deliberate and malicious fiscal malfeasance against their city and its citizens.
Macquarie has already presented this information in Utah County and will be presenting again Wednesday April 30 at 7PM at Layton City Hall and Thursday May 1 at 8PM at West Valley City Hall. Show up and make sure the cities know you want this deal to happen.