The news is out: UTOPIA is undergoing some radical changes in the near future as it copes with lower than expected take rates and cash flow issues. What kind of changes you might ask? For starters, it's going to concentrate new deployments only on areas where a large number of users will commit to service. (My sources say around 40% will be the requirement.) You'll also have to shell out around a grand for the installation costs which could later climb to $2,500 or more depending on the circumstances of the installation. It's also going to use most of the leftover money from the re-bonding to cover operating costs for the next several years instead of accelerating deployments.
Not all is bad news, however. Part of UTOPIA's plan will be to consolidate advertising within the organization and more heavily market UTOPIA to the areas with existing deployments. This will likely lead to a surge in take rate that will be used to finish up the fiber rings within the cities. Since the network meets current operating expenses with a 18.4% take rate and iProvo has been able to get into the mid-to-high 30s, it seems likely that this is a temporary setback rather than a permanent one.
Most importantly is the takeaway from UTOPIA's first years. For starters, they grossly underestimated the reaction from Qwest that halted construction and put the project very far behind where it needed to be. They were also unprepared for the numerous occasions where access to utility poles was illegally blocked and the USDA's fast one on the RUS money. The delays have left a lot of residents and city council members highly frustrated, even though some of them understand the uncontrollable nature of these events.
We've also learned an important truism: there's no such thing as a free lunch. Cities were all too willing to bet that the network would be a risk-free proposition and didn't even consider just directly financing the construction of the network from their coffers. Without these external events, it probably would have happened. They're now being given the option to try again for the free lunch and approve the new bonds to give UTOPIA some breathing room.
I think it would be better for the cities to assume their respective shares of the bond debt, retire it on their own and extend funding to cover the miscellaneous expenses still looming. The network is currently paying for operations and with a slightly higher take rate, will have operating income to complete the build. Is that a tough sell to voters? Maybe. It seems that the comments sections of the major papers are filled with UTOPIA supporters just itching to have the network come to their homes and businesses. Since nobody has bothered to do a poll to gauge public support for UTOPIA, this anecdotal evidence is the best I can offer.
You can read more on these big changes in the Salt Lake Tribune.