Free UTOPIA!

Both the Salt Lake Tribune and Daily Herald have run articles about closed-door meetings between Provo Mayor John Curtis and members of the municipal council. These meetings included only a few council members at a time so as to avoid the requirement to hold open meetings. An e-mail from the mayor indicated that these meetings were to discuss a “plan B” for iProvo. There’s just one small problem: Veracity (or at least the C-level executive there I talked to) apparently had no idea the meetings had taken place until I called to find out what’s up.

I have a number of problems with this, not the least of which is the environment of fear, uncertainty, and doubt that this creates. You may recall that Provo had to have a number of meetings in the midst of Broadweave’s impending default to figure out what to do prior to the network being handed back to the city in worse shape than when it left. You may also recall that I had copious amounts of sharp criticism for Broadweave, all of which was based on the company history (or, more  precisely, the lack thereof), hearsay about the internal disfunction at the company, and confirmations that they had to continue to use a line of credit to continue making bond payments. In this case, Veracity is a company with a solid reputation, no reportable internal strife, and a healthy cash flow from other operations. In short, there is little evidence from that side that any kind of network trouble is in the works at all.

Unfortunately, the refusal to discuss the “plan” B and how likely or, in my belief, unlikely it may be in a public venue combined with a media tendency to puff up bad news (love you guys, but you do it way too much) has combined to create nothing more than a cloud of unfounded speculation and innuendo. While Broadweave was always tight-lipped about operations, Veracity has been very open with me and has pretty bluntly stated what they’re doing with the network: cross-subsidizing it while pursuing the only customers really left, the single-family homes. Given their strong presence in other markets, I don’t doubt their capability to do so. Selling millions of minutes of voice a month is much more stable than a thousand double-play customers in an insulated (and competition-free) housing development.

This kind of pessimistic journalism, while no doubt backed up by experience, is not new. UTOPIA regularly faces one-sided stories and unrebutted opinion pieces in all of the major dailies. The only paper that consistently seems to take their job of presenting all facts seriously has been The Davis County Clipper. This is simply unacceptable. There are a lot of people depending on the newspapers to get the story straight the first time, even if it means pushing back the deadlines so you can track down and talk to other sources.

(For the record, I actually agree with Royce Van Tassell on something: more open meetings are a Good Thing. I’ve been hounding UTOPIA for the better part of two years to toss more data out in the public. Provo shouldn’t resort to so much secrecy.)

The Obama Administration announced today a new round of broadband stimulus funding that includes $16.2M for UTOPIA. That money can go a really long way towards deploying more of the network in UTOPIA’s footprint and can, at the average install cost, cover around 5400 additional homes. UTOPIA plans to hold an event at the state capitol tomorrow at 10AM to explain the details.

Source: WhiteHouse.gov (warning: PDF)

h/t: Stimulating Broadband

WEST VALLEY CITY – August 10, 2010 – The Utah Telecommunication Open Infrastructure Agency (UTOPIA; http://www.utopianet.org) today announced that PAETEC (http://paetec.com) is that most recent service provider to join the fully-fiber, open access network. PAETEC offers business-class customers a comprehensive suite of data, voice, and IP services, as well as enterprise communications management software, network security solutions, and managed services. PAETEC serves over 84 of the top 100 Metropolitan Statistical Areas and has customers in all 50 states.

“We’re thrilled to have our first national provider join the network,” says Todd Marriott, UTOPIA’s executive director. “They have a solid reputation for value-add offerings and value-add service. Their unmatched quality in markets across the country will also be a tremendous benefit to customers on the UTOPIA network. And their decision to join the UTOPIA network is great validation of the improvements and growth we’ve seen over the last two years. The addition of PAETEC’s services to our already robust lineup is proof that open fiber networks just keep getting better – providing quality products and new, innovative services from scores of great providers.”

“PAETEC is the premier alternative to the incumbent telephone and cable companies, based on our nationwide footprint, breadth of products, and quality of service. And we’re excited to expand that footprint with UTOPIA,” says Arunas A. Chesonis, PAETEC’s CEO. “We’ve seen dynamic growth since we were found in 1998 because we believe in basic values – providing unmatched cost-effective solutions and first-rate customer service. There are many reasons why customers initially select PAETEC; however, the relationship established is what keeps them with us. UTOPIA has these same values and we’re excited to expand our offerings to more Utah customers.”

Today’s announcement makes PAETEC the 12th provider on the UTOPIA network. UTOPIA connects fiber directly to customers’ homes and businesses, allowing them to receive unmatched clarity and speed without interruptions from copper wiring and shared connections with neighbors.

Salt Lake City Weekly just ran a story on Qwest’s attempts to limit competition and it looks like XMission isn’t alone. The CFO of Fibernet, Lee Livingston, says they have also experienced getting cut off from newer infrastructure and getting their customers poached. Tellingly, the Qwest PR flack tasked with responding refused to dispute the accuracy of the recorded phone call with their rep, instead trying a weak sauce accusation that it had been fabricated or altered. (Hey Qwest? That’s pretty much an admission of guilt and makes you look petty.) Fibernet used to complain to the FCC about these problems and gave up after they got no results.

The short of it is that the new era of competition that was supposed to be ushered in by the Telecommunications Act of 1996 flamed out almost as fast as it arrived. Incumbents have been actively thwarting wholesale customers to lock the market back up while claiming that they still have sufficient competition. Open networks like UTOPIA are the last chance to correct this market imbalance. And yes, it will be expensive and painful. Most mistakes are.

Ookla, the company responsible for running Speedtest.net, has recently released new results on the state of broadband speeds around the world and Brigham City has taken the top spot in Utah by a wide margin. Their average speed of 20.59Mbps handily bests second-place Pleasant Grove by almost 60%. Considering that over a third of the city accesses the Internet using a UTOPIA service provider, this doesn’t come as much of a surprise; almost all of the increase has been in the somewhat recent future. Neither is it surprising that two of the top three ISPs (as ranked by speed) are UTOPIA providers Xmission and Integra Telecom.

I think the moral of the story is crystal clear: if you want top-notch Internet service, get UTOPIA.

Unsurprisingly, Payson is hand-wringing over joining the new Utah Infrastruture Agency over financial concerns. On Wednesday, the city council opted to put off making a decision until August 4 as they worried openly both about the cost and how much say they would have in the new agency. Payson is about 30% connected and city leaders feel like if they don’t join, they won’t see any new construction.

And really, that’s true. The UTOPIA money well is empty and until the system is operating in the black, there will be nothing with which to build. The UIA is an attempt to solve this lack of capital while not putting the cities themselves on the hook for more money. Given the tone that Payson is using, it sounds to me like they either don’t understand the proposal before them or are operating purely on deer-in-headlights fear.

It’s not surprising to see that Payson’s city council members haven’t developed any new intestinal fortitude since they tucked tail and made a calculated vote against the new bond two years ago. I personally feel like they’re repeating the mistakes of American Fork, jumping in with a lot of initial enthusiasm and not having the wherewithal to see the vision through. Any elected official who operates with that kind of short-sighted eye towards instant gratification can’t be counted on in tough times. To be blunt, they’re cowards, afraid to do what is necessary and acting in shameless self-interest.

Grow a pair already, Payson. I’m sure you’re wearing thin on the rest of the cities too.

Incumbent telcos haven’t exactly been thrilled at having to offer their lines at wholesale rates to competing ISPs, especially since landline revenues have been sliding into a ditch. While AT&T and Verizon can keep most of that revenue with a wireless division, Qwest has no such option and has struggled with making enough money to either reduce its staggering debt load or upgrade its network. Instead of offering, say, good service or a product that people want to buy, they instead figured out that rolling out FTTN would let them claim to no longer have a copper plant to share. Of course, they don’t admit so much in public, instead insisting that other ISPs are just too incompetent (heh) to handle their shiny new pipes.

Well, Xmission has called them on it with a recording of a Qwest agent saying flat-out that the point of FTTN has been to eliminate competition and bring all of those customers in-house. It’s pretty damning evidence that Qwest doesn’t want to compete based on the products and services they offer, but rather on locking out competition. Is it any wonder that we have fewer ISPs today than we did in 1997 and that the few remaining ones are on UTOPIA as a means of survival?

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.

The Utah “Taxpayers” Association thought it would get an upper hand with a BBQ in Orem just before the city council voted on a new construction bond. Unfortunately for them, the plan backfired when UTOPIA made a surprise appearance at the event with their “mobile command center” and started actually talking directly with the meeting attendees, many of whom had no opinion of UTOPIA yet and came to get more information. According to my sources, about half of the 250 or so attendees ended up registering their interest in UTOPIA services, a major coup for the network that upstaged their most vocal opponent.

Apparently what convinced a lot of the undecideds was the UTA’s refusal to disclose who pays their bills. That lack of transparency translated directly into looking like they have something to hide (hint: it’s Qwest and Comcast dollars) and left many looking at their fantastic claims skeptically. I’d like to say that there were some talking points to address, but an eyewitness account called it so much kool-aid drinking, a series of incomprehensible rants filled with insinuation, innuendo, insults, and no concrete addressable facts. In contrast, UTOPIA discussed their new business plan with individual residents and offered demonstrations of how well the service can work. Truth has power and it wasn’t on the UTA’s side.

In attendance were Rep. Mike Morley, UTA VP Royce Van Tassell, UTA President Sen. Howard Stephenson, Rep. Steve Sandstrom, and Sen. Margaret Dayton (who did not speak). UTOPIA openly challenged both Stephenson and Van Tassell to provide outside oversight of their plan, an offer which they declined to accept. Considering that the UTA regularly chides UTOPIA for mismanagement and secrecy, I would think they’d jump at the chance to look at things from the inside. If nothing else, they could fabricate some juicy new attacks from half-truths. This says a lot about the true motivations of the Utah “Taxpayers” Association. If they really wanted to keep an eye on UTOPIA for the benefit of all taxpayers, why would they turn this down?

Please, UTA, consider holding more of these events. As many as you want. You come out looking like fools and UTOPIA gains even more customers and mindshare. I’ll even volunteer for the dunk tank.

Also, see coverage from the Deseret News and Daily Herald. Bonus: I’ve got about a paragraph in the Herald article.

As a side note, I saw it reported that the connections on the new plan will be $50/mo plus service, but I don’t know if that’s accruate and haven’t gotten a reply to an e-mail I sent Monday seeking clarification. It’s also unclear how much a service provider tacks on top of that if that is the case, though it had better be well south of $20/mo for Internet. You’ll know more when I do.

The Salt Lake Tribune reports today that Google had a few UTOPIA executives come out to their offices last month to discuss how UTOPIA operates. The article insinuates that this may mean that UTOPIA is near the top of the heap in Google’s search for a location to build a fiber-optic network. As tantalizing as that possibility is, I don’t think there’s evidence enough to support it.

Google would obviously be interested in how UTOPIA operates regardless of if they are a finalist. UTOPIA’s model is very, very close to what Google wants to do and it is in their best interests to learn what does and doesn’t work on an open-access wholesale fiber-to-the-premises network. I think UTOPIA would be an excellent partner for Google, but nobody yet knows if Google is interested in expanding an existing project (or one already in progress) or taking the steps to create one from scratch using the best practices of what’s already been tried. That alone could make or break any potential deal between the two parties.

Google may also not want to step into such a partnership because of the complexities of determining who owns what. While I believe them to be an honorable company that tries to do the right thing more often than not (despite, on occasion, stepping in it), they are likely going to want some interest in whatever the finished product may be and potentially a controlling one. Cities that have already sunk a bunch of time, energy, and money into it may not be so willing to let go of the reins.

I know there is a lot of excitement about a company of Google’s stature dropping a fat wad of cash on crazy-fast pipes, but we should try tempering that with a realistic perspective. It’s simply too soon to tell who Google will choose to work with.