A way forward on Macquarie? HB275 could pave the road

macquarie_logo_2638One 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.

UTOPIA announces Roger Timmerman as the new executive director

utopia-logoAfter 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.

Download (PDF, 55KB)

Is Vivint Wireless living on life support?

Vivint LogoAfter making some big claims (and underhanded political maneuvers), it looks like Vivint’s wireless division may be getting cut loose. The company ceased adding new customers several months ago, closed up operations in Texas and New Mexico, and changed their topography from their overhyped wireless mesh to using traditional WISP towers. Technical support has also reportedly stopped fielding calls on the weekends leaving some customers with outages that last until Monday morning. Customer reviews have been mixed at best. While speeds are often impressive for wireless, many customers report frequent downtime or a degradation of service several months after signing up.

More telling is what’s alleged to be going on internally. Sales staff have either been cut loose or reassigned to other divisions of the company. Tech staff have seen similar cutbacks which may account for the degraded support response times. Apparently the original business model of unlimited use of symmetrical speeds up to 100Mbps for $60/mo hasn’t panned out either. All of this points to a product that doesn’t have long for this world.

I honestly can’t say I’m surprised. The history of wireless broadband seems to be over-promise and under-deliver on almost all counts. Vivint has become another entry in the list of companies who thought they could cheat the laws of physics with the power of marketing. Sadly, they cost several UTOPIA cities a shot at Macquarie with their marketing BS, a legacy of shame that will likely outlive their ill-fated venture into being an ISP.

Beehive: We’re gonna rock fiber into The Avenues (and maybe take it further)

Beehive Broadband logoBeehive Broadband has big broadband dreams. After rolling fiber in their native service areas in Tooele County (even into the spec of nothingness that is Grouse Creek) and hitting downtown SLC with fiber rings, they’re now making a push to bring gigabit fiber into The Avenues neighborhood of Salt Lake City. Pricing is targeted around $40-50/mo for 100Mbps and $70 or so for gigabit with an install fee in the $100-200 range. They’ll also be offering up phone and TV service for those so inclined.

The strategy is simple: build fiber to commercial buildings, then target neighborhoods nearby to bring it to the home. If this sounds familiar, it’s because CenturyLink said they would do the same thing, yet they seem to be very slow to follow up on it. Beehive is also evaluating using this plan in many other cities including Draper, Herriman, Holladay, Riverton, and Lehi. Right now, they’re looking primarily at areas that are being ignored by Comcast and CenturyLink.

So what about Google Fiber’s entry into SLC? Beehive is taking a “first to market” approach and plans to start hooking people up as early as mid-January, well before Google will turn over a single shovel of dirt. They’re also planning to make service available to all addresses in the footprint, something Google hasn’t done once their initial “fiberhood” signup period closes outside of a few exceptions in Provo. My take is that this is going to be a more successful strategy that could stymie Google’s efforts to break into that neighborhood.

If you get signed up on this service, let us know in the comments how it works out.

The Need for Speed: UTOPIA bumping 100Mbps tiers to 250Mbps

moarWord 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.

The Macquarie deal isn’t dead; it’s resting

Now a year late on delivering MS2, most people have assumed that the Macquarie deal is dead and buried. With no real news (other than the leak of the draft MS2 proposal from earlier this year), there’s been no evidence that the deal is alive at all. So is it dead? No, but it’s not exactly moving forward either.

As part of the deal, Macquarie wants a binding public vote on the MS2 proposal. This makes a lot of sense over a council vote. Some of the shenanigans in Orem with public referenda probably woke Macquarie up to how an irate minority can put their thumb on the political scales. A public vote can’t be overturned in a similar fashion.

Unfortunately, it’s also something that can’t be done. State law does not currently allow for a binding public vote on the city entering into a contract. The legislature has also not been in much of a hurry to change this. No action was taken in the previous legislative session, and there’s unlikely to be any action in the upcoming one. I can’t help but imagine that Comcast, CenturyLink, and their Utah Taxpayers Association lackeys have worked hard to shoot down the idea.

The short version is that if you want some finality on the deal, you need to bug your legislator to come up with some kind of fix allowing a public vote. Until that happens, this deal is effectively dead.

A UTOPIA Update: More network, more money

utopia-logoI 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.

HB414 proposes a new state broadband agency

Rep Stephen Handy

Rep Stephen Handy

Is Utah finally getting serious about broadband? Maybe. Rep. Stephen Handy is proposing a new Utah Broadband Outreach Center to spur more development in the state. Like the Utah Broadband Project, it would be attached to GOED and have a director appointed by the agency. Its stated purposes are to coordinate between state and local agencies to ensure best practices (like proactively notifications of open trenches) and make policy recommendations to both the governor and legislature.

This is one of those two-edged swords depending on who the agency chooses to involve. If existing players get to dominate the conversation, we’ll get more incumbent-protecting legislation and little improvement in service or competition. If they involve local ISPs and other stakeholders, it could actually do some good. Given that both Comcast and AT&T have expressed support of the bill, they seem to think they have a shot at gaming it, so it would be critical, if this bill were passed, to make sure the agency hears from you about how it should operate.

Rep. Handy can be contacted at 801-979-8711 or stevehandy@le.utah.gov.

Back from the dead: New UTOPIA provider may revive FTTH in Springvile

Neighborhood Networks LogoWay back in 2004, Springville had a fiber-to-the-home network covering most of the city, but it had only picked up about 100 subscribers. The city made the decision to shutter the network, purchased from the defunct AirSwitch, since it was operating at a loss and was mostly dark. Now a new UTOPIA provider, Neighborhood Networks, has big plans to bring back fiber in the city and provide gigabit services at the now-standard rate of $70/mo.

The state of the current city network isn’t all that good. Most of the electronics are in need of replacing and many segments didn’t have any installed to begin with. There’s also the question of the state of a network that has gone unused for over a decade. For instance, the fibers or conduit could be broken or there may be a lot of unmapped network assets. Repairing what’s there would be an expensive endeavor, and it’s why Neighborhood networks plans to build from scratch, bypassing the current city assets. I reached out to the Mayor of Springville, Wilford Clyde, to ask more about the network and received no response.

Neighborhood Networks CTO Johnathan Pemberthy says the company sold most of their WISP operations to help finance building out the city. They’re also hoping to take an approach like UTOPIA did in Brigham City (and Google Fiber later emulated in Kansas City, Austin, and Provo) to sign up neighborhoods before starting construction. With a 25% take rate, they’ll build a neighborhood and offer 100Mbps for $40/mo or 1Gbps for $70/mo with an eye towards eventually providing 10Gbps services down the road. The service will come with no caps, no throttling, and no contracts. Most interestingly, they’re offering a standard same-day SLA for residential customers and 4-hour for business customers, what Pemberthy calls their crucial differentiator.

Building fiber is certainly no easy task, even with a good business plan. They’re still negotiating right of way with the city (which will take about six months) and aren’t ready to start seeking out areas of demand just yet. (Seriously. If you call, they’ll probably ask you to call back when they’re ready.) Another challenge is that supplies of fiber equipment are stretched pretty thin as gigabit mania sweeps the nation. It also costs a lot of money to dig trenches and lay conduit, something that’s caused Google investors a lot of heartburn when it comes time to look at earnings statements.

If you’re living in Springville, keep your ears to the ground for some next-gen broadband in your backyard.

Macquarie Milestone 2: What you need to know

Macquarie’s Milestone 2 proposal has been finally released to the public. Here’s a quick run-down of the most important details.

  • The final cost per address is estimated at $22.60 per month. Macquarie estimates that re-working the deal to account for five cities bowing out trimmed the cost by $8.57 per month.
  • The revenue split is much more generous than I expected, allowing the cities to keep 75% of wholesale revenue after the first $2M per year. It’s expected to completely cover the debt service by 2021 with just a 24% take rate for premium services.
  • The basic level service has also been improved. Instead of 3M/3M service being included at no extra cost, it’s been bumped to 5M/5M. This matches Google Fiber speeds on the free tier. The data cap stays put at 20GB per month.
  • Macquarie will still be in charge of operating the network for opt-out cities.
  • A public vote will determine if the project moves forward in the opt-in cities.
  • Cities are free to determine what, if any, opt-out provisions will be available.
  • Users won’t be charged a utility fee until they connect to the network or six months after the network connection is available, whichever comes first.
  • UIA and SAA users will not pay any utility fee. If you’re already paying for (or have paid) your network connection, there’s no utility fee for you.
  • The UTOPIA NOC would be closed and all NOC operations moved to a Fujitsu facility in Texas. Keeping a primary or secondary NOC in Utah would raise the utility fee by between $1.50 and $1.79.
  • Almost all of the network revenues are being driven by Veracity, XMission, and SumoFiber. Other ISPs are very small by comparison.
  • The majority of currently connected users are in opt-out cities. This only reinforced that the votes there were “we got ours” selfishness.

Overall, this still looks like a great deal for the cities who are moving forward. It could still be a great deal for cities that haven’t figured out what to do about the network yet (looking at you, Orem).

If you want to read the full report, I’ve attached a PDF copy. 

Download (PDF, 1.68MB)