Brigham City advances to Macquarie Milestone Two

Brigham City became the fifth UTOPIA city to move forward with the proposal from Macquarie and seek full details under Milestone Two. The council passed it on a 3-2 vote. Cities who have not yet taken a vote include Centerville, Orem, Murray, and Perry. This means that over 51.8% of homes in UTOPIA cities are now on board with getting full details of the proposal from Macquarie.

Word on the street is that Perry might actually move forward with the deal to not be left behind by their northern neighbors. Given that the city currently has no fiber, this may be the only way for it to make good on its existing bond commitments. They’ll be holding their next city council meeting on June 26th at 7PM.

Updated List of Macquarie-related Meetings

I’ve just received an updated list of what meetings and votes are currently scheduled to take place regarding Macquarie’s proposal to UTOPIA. As always, theses are subject to change and could be added to. If you hear anything, let me know and I’ll update accordingly.

Public Meetings and Town Halls:

  • June 3 @ 7:00PM, Lindon: Lindon City Center, 100 N State St, Lindon
  • June 4 @ 7:00PM, Tremonton: Bear River High, 1450 S Main St, Garland
  • June 5 @ 5:00PM, Orem: Orem Senior Friendship Center, 93 N 400 E, Orem
  • June 5 @ 6:30PM, Murray: Doty Education Center, Building 6 of the Intermountain Medical Center, 5121 S Cottonwood St, Murray
  • June 5 @ 7:30PM, Centerville: Centerville City Hall, 250 N Main St, Centerville
  • June 17 @ 7:00PM, Lindon: Lindon City Centr, 100 N State St, Lindon
  • June 17 @ 7:30PM, Centerville: Centerville City Hall, 250 N Main St, Centerville
  • June 19 @ 6:00PM, Orem: Orem Senior Friendship Center, 93 N 400 E, Orem

Votes:

  • June 5 @ 7:00PM, Layton: Layton City Hall, 437 N Wasatch Dr, Layton
  • June 18 @ 6:00PM, Payton: Payson City Hall, 439 W Utah Ave, Payson
  • June 24 @ 6:30PM, Murray: Murray City Hall, 5025 S State St, Murray
  • June 24, Centerville: Centerville City Hall, 250 N Main St, Centerville
  • June 26, Orem: Orem City Hall, 56 N State St, Orem
  • June 26 @ 7:00PM, Perry: Perry City Hall, 3005 W 1200 S, Perry

Some of these are cutting it pretty close to the deadline to respond of June 27. Payson is reportedly interested in finding out more, but their years of not attending board meetings with any regularity has left a huge information and expertise vacuum within the city government. I haven’t heard anything about Perry at all. Brigham City will be voting on the proposal either on June 19 or 26 during the regularly scheduled council meeting.

Schedule of Macquarie-related meetings

macquarie_logo_2638Want to ask Macquarie some more burning questions? Interested in seeing how your city council votes? Here’s the so-far definitive list of what is happening and where. Note that any of these is subject to change and I’ll do my best to publish updates.

  • Thursday May 22: Brigham City will have an open house at the Bunderson Center, 641 E 200 N, from 6PM to 8PM. Macquarie will be there to answer one-on-one questions.
  • Tuesday May 27: Orem will have Nick Hann at the regular city council meeting to answer questions and take feedback. The council meets at 3PM in the Public Safety Training Room.
  • Tuesday May 27: Both West Valley City and Layton will be taking votes on advancing with Milestone Two during their normal city council meetings.
  • Tuesday June 3: Lindon will have a public discussion item on the city council agenda. They meet 7PM at the Lindon City Center on State St.
  • Thursday June 5: Murray will have an open house at the Doty Center inside the Intermountain Medical Center complex. It starts at 6:30PM.
  • Thursday June 5: Centerville will have an open house, education session, and public Q&A at 7:30PM. I’m assuming it’s at city hall, but the location is unclear.
  • Tuesday June 17: Centerville, Tremonton, and Lindon should all be taking votes on advancing with Milestone Two during their normal city council meetings.

Notably absent from the list are Payson and Perry, cities that seem to have adopted “bury our heads in the sand and hope for the best” as their strategy. If you live in either city, you should contact your mayor and city council to give them a nudge.

Confirmed: Macquarie tips its hand on details of the upcoming proposal

macquarie_logo_2638After hearing some of the rumors about the Macquarie deal, I’ve been watching skeptically to see how much of it is wishful thinking and rumor-mongering. I’m now seeing that almost all of it is completely true. Macquarie had a representative answering questions at the most recent Brigham City city council meeting (skip to 43:30) and he confirmed a lot of what I had previously reported.

Macquarie wants a 30-year contract with the cities to expand and operate the network. There would be no transfer of ownership of the network and the cities would retain the title to all of the assets. Their purpose in doing this is to secure low-risk (in their words, “boring, stable”) investments with a moderate rate of return for pension funds and life insurance pools. Their view is that because they don’t have the typically myopic view of most of the telecom market that requires a very fast, very high return on investment, they can approach differently and see the long-term effects. Macquarie is committed to building out every home (165K of them by their count) to a “service ready” state. I assume that means including all portals and needed cabling so that getting service is as easy as a phone call.

In exchange for the contract, Macquarie would assess a per-address fee to the cities. While they recommend a utility fee with waivers for the financially indigent, the cities are given full latitude to determine how this fee would be collected. They can’t quote specific numbers yet since they’ve just started to receive proposals in response to their RFQ, but I’ve heard numbers between $15 and $25 per month. Macquarie would commit to providing the connection to every address and service providers would offer a free “basic” level of service comparable to high-end DSL or low-end cable. The service providers would not be charged a fee for access to these customers and would only incur the customer service costs. Word is that they view this arrangement favorably since this gives them a way to market 100Mbps and 1Gbps services to those customers.

Cities are actually going to get a pretty sweet deal on those upgraded customers too. Macquarie wants to make sure the cities keep almost all of the funds paid by the upgrading customers. These funds will help pay off the debt service and could be used to reduce the utility fees. I personally also like that the cost of UTOPIA will become a transparent thing. Brigham City is planning to leverage this universal buildout to switch to smart meters that will pay for themselves within 2 years and greatly reduce the operating costs of the city electrical utility.

Macquarie is doing a good job at keeping their ear to the ground locally. They were on top of Sen. Valentine’s attempts to amend SB190 from the floor and worked vigorously behind the scenes on both that and the original ill-conceived bill. They’re keenly aware of the perception of UTOPIA being forced on city residents and want to focus on showcasing the benefits of the network. They also took a moment to slam some of the woefully uninformed comments from the previous meeting by pointing out that they’ve been doing business in the US for two decades and have over 5,000 employees here.

The devil is always in the details, but so far this looks like a very solid proposal that’s win-win. The cities get world-class infrastructure and money to pay the bonds, the citizens get at least a free baseline of Internet service (with cheap upgrade options), and the rest of the state gets the potential to get gigabit everywhere else too. Macquarie also gets their toehold on what they believe to be a great long-term investment for low-risk portfolios, potentially spurring other companies into an overbuilding gold rush. I have yet to see anything giving me pause.

PS As a bonus, note that Ruth Jensen spends most of the council meeting continuing to concern troll on both smart meters and the free tier of service. She also comically states that DSL and cable are “good enough”, parrotting the standby line of the “you’ll take it and like it” incumbents. Jensen also goes so far as to insinuate that people actually LOVE their existing options, apparently unaware of how poorly they have been performing in customer satisfaction rankings for well over a decade. Her near-automatic gainsay reminds me way too much of the Monty Python argument clinic sketch.

Brigham City on Macquarie: Yes, please

On Thursday night, the city council in Brigham City voted to move forward on a predevelopment agreement with Macquarie. This is a positive step towards bringing $300M in investment to UTOPIA, completing the buildout in all member cities, and contributing money towards the UTOPIA bond payments. Unfortunately, the meeting wasn’t without theatrics and hysterics with plenty of incoherent rants and untruths during the public comment period. We even got a special Hitler reference from one of them.

You can watch the work session and city council meeting online (skip to 33:00 to begin public comment). The work session includes a very informative history of how private industry failed to build the infrastructure the city needed to keep businesses. Some quick facts from the work session and council meeting:

  • In Brigham City, a total of 1600 people signed up for the SAA and about 1300 are current subscribers to the service, about 26% of the city.
  • Brigham City is currently not contributing any payments towards UTOPIA’s operational shortfall of about $2.1M per year.
  • UTOPIA’s revenues raised much faster when they started primarily targeting business customers.
  • January’s income is much higher than expected.
  • Anything beyond the current plan to slowly grow the network to profitability would be a much more expensive option. But we already knew that, didn’t we?
  • Reissuing the bonds would be very expensive because of the way the current bonds are issued.
  • The network will remain the property of the member cities. Macquarie is primarily interested in a return on their investment, not ownership. To break even, they’d need to bring in $10M per year over the life of the contract.
  • Per Ken Sutton, owner of UTOPIA ISP Brigham,net, if the network doesn’t make a profit, Macquarie doesn’t get paid. Period.
  • The woman who canceled the RUS loan to UTOPIA is now an executive at Frontier, the incumbent operator in Tremonton. Isn’t that special?
  • Per their IT director, Box Elder School District depends on UTOPIA for 55% of students to get Internet access. They have no other fiber options available to them.

As expected, Ruth Jensen was combative for much of the work session, fitting her previous history of more-or-less unhinged opposition to UTOPIA. She even went so far as to propose suing UTOPIA, calling it “enslav[ing] the people”. The city attorney promptly smacked her down, saying that it would be the city effectively suing itself. (Skip to ~38:00 in the work session video to see it for yourself.)

So far, West Valley City, Layton, and Tremonton have also signed on. Centerville and Murray are considering it this week. Payson, as usual, is hoping that the whole thing will just go away and is ignoring anything UTOPIA-related. Word around the campfire is that all of the other cities want to move forward on a full study.

Want the fastest broadband in Utah? Brigham City has you covered

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.

Utah Infrastructure Agency Moving Forward

Remember UTOPIA’s new plan to shift the cost of the network from the cities onto subscribers? It’s been moving forward in the form of the Utah Infrastructure Agency, a way for cities to bond for construction without having to put taxpayers as a whole on the hook. So far, West Valley City, Lindon, Midvale, Layton, and Orem are on board with Perry and Tremonton deciding to sit it out. Other cities are still considering signing up for it and need to hear from you.

So what exactly does this do? In short, it’s the next evolution beyond the SAA used in Brigham City. The SAA model was to  find demand, form an SAA, and then get the funds to start construction. The UIA will, instead, get the money first, find the areas of demand, and then start construction once it becomes feasible. Just like the SAA, the subscribers that get hooked up under the arrangement will be the ones footing the bill. This speeds up the process of connecting customers while still continuing to shift the burden of supporting the network away from cities and onto those who get service.

To be quite honest, I can’t see why a city wouldn’t be all over this. There’s no cost to the cities to participate and increased subscribers will only decrease or eliminate the called pledges. Given the benefits to the taxpayer, that they are taken off the hook, you’d think the Utah “Taxpayers” Association would be all for it. (Fat chance, I know.) The good news is that any city that doesn’t elect to participate now can always reconsider in the future. If your city has already declined to join (or does so in the future), you can still pester them until they reconsider.

Note: While Orem was part of the founding group of the UIA, they haven’t taken an official vote on the matter yet. There will be a public hearing on Tuesday after which the Orem City Council will decide if they will join. They chose the new bond in a 6-0 vote last time around, but the UTA is holding their rally just before the meeting to try and pack the house with opponents and scare council members into reversing course. It’s very important that UTOPIA supporters turn out in force both at the rally and the meeting to thwart these efforts. I hear there’s going to be a fun surprise for the UTA during their BBQ, so show up and be prepared for a laugh at their expense.

UTA Threatening to Sue UTOPIA and Brigham City

Hot off of their misinformation campaign to residents, the Utah Taxpayers Association is now rattling their legal sabers at UTOPIA and Brigham City over the Special Assessment Area (SAA). The UTA is claiming that participants were deprived of due process because the terms were not explained properly and that there wasn’t a public hearing. These claims, however, are a matter of pure fiction. Many of the comments I’ve read indicate that the terms were explained and paper copies of the agreement provided via mail by the city. The initial meeting held in November to form the SAA was a public hearing and was well-attended.

What’s interesting, however, is that it was Qwest that initially filed FOIA requests with Brigham City to see the terms of the SAA, yet the UTA is the one making legal threats. My suspicion is that, after getting their butts kicked in court, Qwest wants to use the UTA as their proxy in these fights. The UTA refuses to disclose how much money individual members contribute or what influence any members exercise, ironic considering that they are protesting that there hasn’t been enough sunshine in the process.

The most galling part isn’t the lying and misrepresentation. At this point, it appears to be par for the course. No, what irks me the most is the UTA characterization of Brigham City residents as simple-minded fools just waiting to be duped by the first slick salesman that appears on their doorstep. I’ve met many residents and city employees from Brigham and I can tell you with complete certainty that they’re no dummies. They go to city council meetings, read the papers, and get informed on issues in a way that I wish their urban counterparts would consider trying out. (Seriously, I’ve found rural voters to be some of the sharpest tacks out there, especially when it comes to local politics.) How the UTA thinks it can simultaneously insult the intelligence of and purport to represent taxpayers is beyond me.

Articles on the Brigham City SAA Vote

The Salt Lake Tribune, Deseret News, and Standard-Examiner all have posted their articles on last night’s vote in Brigham City. According to the Trib, only about 70 of the over 1600 participants in the SAA opted to sign the UTA petition seeking to leave the SAA, a scant 4%. One of them admitted to not even reading the contract before signing up despite having been given the opportunity to do so. (There’s one in every crowd, you know?) Unsurprisingly, Ruth Jensen was the lone vote against it and tried several times to delay the meeting.

Brigham City will issue a bond for $3.66M (rated A3 by Moody’s or low risk) and chip in $655K of city money of which either $294K or $482K will be to wire city facilities, depending on which article is correct. The remainder of the $5.45M total construction cost comes from residents who chose to pay up-front. That works out to over 400 residents who opted to front the construction cost, over a quarter of the total participants. A pleasant surprise is that the cost of the SAA went down to $22.50 per participating residence.

From there, there’s a lot of divergence in the details of the articles. The Tribune article takes a decidedly negative slant in line with their recent editorial. The Deseret News claims that 600 participants in the SAA won’t get service because of low participation rates, a claim that doesn’t jive with the other articles at all.

BREAKING: Brigham City Approves UTOPIA SAA

Despite some recent controversy created by the UTA and saber-rattling by Qwest’s legal team, Brigham City has signed off on the UTOPIA SAA and cleared the way to start construction immediately. This will add 1,604 customers to the network and opens the way for additional customers to join the network at a later time. The network will cover the entire city and be available to every residence and business. No word yet on when the construction will be complete, but there is a rush to get it done before the ground freezes.