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.
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.
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.
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 firstname.lastname@example.org.
Way 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’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)
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.
Orem 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.
Centerville followed Murray in rejecting Milestone Two tonight, this one on a 4-1 vote. Only Perry and Orem are left to vote, but so far over half of the addresses covered by UTOPIA are opting to move forward with getting more information from Macquarie on the true cost to build, operate, and maintain the network for 30 years. Despite what you may hear, this is enough to have the Macquarie deal move forward if the Milestone Two cities accept the finalized proposal.
Most disappointing is that Centerville has 93% coverage in their city, so the vote appears to be a “we got ours” kind of statement. Tremonton and Brigham City both voted yes despite similar levels of coverage, recognizing that this is the best offer on the table and a better one is unlikely to come along.
Murray joins Payson and Lindon in declining to move forward with the proposal from Macquarie. The council voted unanimously to pass despite not really having any other workable options on the table. Of course, they’re now in a heck of a pickle: Murray has attracted numerous businesses to the city (including a new location of the Moran Eye Center) with UTOPIA, but they’re running the risk of the network going dark if they won’t cover any operational shortfalls.
Centerville is also taking a vote tonight in a special council meeting. I’ll post when I have results from there.