No More Impasse? Centerville May Have Deal to Spend RDA Funds on UTOPIA

According to the Standard-Examiner, Centerville may be able to spend RDA funds to expand UTOPIA without facing legal action from Qwest. The deal would be to build a telecommunications hub within the city that would be open to all networks and providers willing to offer high-speed services to businesses and residents. Centerville could spend as much as $150,000 to expand UTOPIA to businesses along the I-15 corridor and complete the network hub.

Anyone at the meeting care to share additional insights? I couldn’t make it due to weather and preparing for another activity tomorrow night.

Tagged , , , . Bookmark the permalink.

19 Responses to No More Impasse? Centerville May Have Deal to Spend RDA Funds on UTOPIA

  1. Mike Taylor says:

    I still think it’s a great idea if each, say, subdivision owned it’s own sort of telecom hub that connected several strands of fiber to every house. That way residents could easily choose any provider they want, and all the provider has to do is get a back haul to that hub and then they can easily hook up residents from there. Multiple strands of fiber to each resident would also ensure that it would be easy to add multiple providers, i.e. one for video, a different one for phone, etc.

  2. Jesse says:

    I like the “homes with tails” option as well. It gets you and your neighbors more personally invested in your broadband future. The problem is that it’s most economically feasible on a new home so that you can roll it into the mortgage.

  3. Harold Bills says:

    This “open to all networks and providers” concept scares the crap out of me. It costs so much to build a network like this that it is very difficult to get all the mom and pop providers to charge enough to both get a profit and pay for the network. Watching the iProvo mess has convinced me that it probably won’t work for alot of reasons.

  4. Mike Taylor says:

    Harold, you’re right that my idea of the the neighborhood hub concept is a scenario that still requires a lot of investment from telecom providers. I see it as a sort of an in between mix of the situation we have emerging today (where Qwest/Comcast bring their own lines to every house) vs. UTOPIA (where they provide all connections for a whole city or group of cities and the providers simply have to plug in there).

    Sure, you can have mom and pop providers with UTOPIA that you never could have with the neighborhood hub concept. The only potential problem with this is it relies on one party, UTOPIA let’s say, to adequately maintain the whole network, there’s no other option. Don’t get me wrong, I want to see the UTOPIA concept succeed. For all of our sakes, I hope UTOPIA meets all of their targets, the most important being ‘recovering stranded investment’ and pulling in enough subscribers to meet debt obligations.

    With the neighborhood network hub concept, telecommunications are more accessible to outside companies and the investment required is significantly lower than it is to build infrastructure to every home/business. A bigger provider, like XMission might be able to provide service in this scenario. We saw some of this in the DSL heyday with lots of DSL providers getting in the game putting in DSLAM’s in central offices but the process to get, say, Qwest to allow this was arduous. Not so with a neighborhood network hub.

    I still support UTOPIA as being more ideal if it succeeds. But here we are still waiting for it to be deployed in Layton where we do a lot of business and it is desperately needed. In the mean time, I live in Weber County, and I am seeing new home developments all around me, and none of them are being planned with enough foresight to have fiber installed at this early stage when it is fairly trivial to do so. There are no UTOPIA cities in Weber County. I think developers if properly educated would be interested in doing some kind of infrastructure if they knew more of the benefits, etc.

    I wish UTOPIA would target new developments, it seems the ideal scenario to add subscribers. If anyone from UTOPIA is reading this, I’d be happy to help. I know developers and city people that are interested but don’t know what steps to take.

  5. Harold Bills says:

    At least people are thinking about a better way to do it. I do believe that a key to the whole thing is that this option truly gives the homeowners access to superior services. Provo providers had no clue what the fiber could do for them compared to the incumbents service offerings. People need to get excited about fiber to change this. Capt. Video will tell you that people don’t need or even want those superior services and will not want to invest. Utopia has to make it very desirable.

  6. Capt. Video says:

    I would slightly correct Harold’s statement made on my behalf by asking EXACTLY what are these wondrous services that were a secret the iProvo providers (which are for the most part the same providers on UTOPIA) “had no clue about”.

    Are those services currently making people sign up for UTOPIA in droves (because that is exactly what they need)?

    What I have been saying is, the MAJORITY (overwhelming majority) of today’s broadband subscribers are happy with the speeds and services they are getting for the price they are paying (meaning they would not want to pay MORE…they would love to pay less.

    UTOPIA offers a much faster connection but very few opt to upgrade to it.

    As new services roll out (video phone, etc.) and customers show a willingness to pay for those new wonderful services (which will be coming), you should expect most providers to find a way to offer them.

    You seem to be talking about the “killer app” that appears to yet be found. The application that will really make those that are not connected connect or those that are upgrade service to use this application.

    But I go back to my simple question…please identify EXACTLY what fiber providers can do that incumbents can’t that will cause a “sea change” with customers moving from cable/DSL to fiber.

    If you know that answer….I’m sure UTOPIA and it’s service provider would love for you to share it with them. That is EXACTLY what THEY need….and apparently not been able to find.

    Apart from that, I’m going to suggest that given that there are already two networks available to almost all homes (cable/phone) I fear it’s likely too late for the “home-owner owned fiber” to take root here. I like and support the idea, but think it more likely to work in some part of the world where strong incumbents don’t already have existing networks.

    I (and most people?) would be more likely to pay to run fiber to my home if it did not already have two networks, and even if building a new home, I would be more likely to pay if there were not two networks willing to run it to my new home for free.

    Is there a successful model (business model) for this anywhere in the world. I remember there being a story about this years ago in Canada and it being big news, but when I did a search for that network a few months ago and it could not be found?

  7. Jesse says:

    please identify EXACTLY what fiber providers can do that incumbents can’t

    Synchronous speeds. 100Mbps or 1Gbps between any two points on the network. Higher bitrates (and thus less compression) on video signals.

    I’d love to see Comcast and Qwest do those things. They don’t and likely will not for years. Comcast isn’t planning to complete DOCSIS 3.0 rollouts until 2010 and DOCSIS 3.0 deployments have been slipping nationally. Qwest can’t afford to do anything more than its current FTTN upgrades and even then they had to put the project on ice for a while. Price is a very important factor but so is the price-per-Mbps, an area in which fiber systems are highly competitive and obviously superior.

    The “sea of change” is inexpensive WANs for businesses, faster telecommuting for workers and better HD options for consumers. (Qwest and Comcast can’t deliver Blu-Ray quality video on their current connections.) That changes the way we live and work. Cable and Telco aren’t leading that charge in Utah.

  8. Capt. Video says:

    I believe Veracity (or Mstar) had a connection like this for a business on the iProvo network. It was at least 100mb and may have been 1GB. Someone from the service provider or iProvo should be able to confirm this. So that could not be what Harold was talking about. He was talking about something the iProvo service providers had “no clue” about.

    However, the desire/need for these connections is so small, relative to the size of the pool, they will not make a “sea change” in the business model of these networks.

    I don’t disagree that fiber is better than coax or that fiber can do things coax can’t. I disagree with the belief that those differences are wanted by a large enough group, willing to pay enough, to make a substantial difference in the business model.

  9. Harold Bills says:

    Capt.’s quote:

    “EXACTLY what are these wondrous services ”

    This was exactly the problem, Capt. You had no clue either. It’s amazing the other fiber to the home projects like Verizon’s seem to generate a lot of excitement. Provo never seemed to understand that hyping the fiber was the key to sucess, they were busy saying that coax was very capable, DSL was comparable, and other old school technologies could compete with fiber. No wonder it failed. You still want to talk about DOCSIS…. sorry I think I nodded off for a while.

  10. Capt. Video says:

    What you didn’t do was answer the question….as usual!

  11. Harold Bills says:

    No one has ever paid me to answer this question, but I would think at least 50MB up / 50 MB down Internet, a decent HD video offering, a VOD offering alot closer to the Comcast level, a reasonable community offering including live events, a really reliable and cheap voice offering, some over the top support, well defined and competitive commercial packages and most of all some kick butt marketing. Of course their are other things that folks with vision will come up with.

  12. Capt. Video says:

    I thought the issue was those service that fiber could offer that other providers could NOT….the things the providers on iProvo never knew existed?

    Your list is nothing of the sort. The only “fiber only” piece is perhaps the 50mb up/down and I think iProvo providers did think of offering that and knew there was no real demand for it. Perhaps proven by the very small number of customers that opted to take it when MStar offered it on UTOPIA.

    If you are just listing what a good package would be, I agree, but I was questioning your CLEAR stated, “Provo providers had no clue what the fiber could do for them compared to the incumbents service offerings.”, I’m asking you to support your claim. Asking for a “VOD package alot closer to the Comcast level” does not seem like something the fiber can do that the incumbents can’t, if Comcast is already doing it?

    It’s easy for anyone to just say anything about iProvo, Broadweave or UTOPIA if you don’t have to have a base in reality or be backed by facts.

    Mayor Billings sold iProvo to line the pockets of his friends with cash.

    Broadweave is violating it’s agreement and Provo is not taking action.

    The reserve was specifically to allow Provo City to recover after Broadweave left and should not be used to pay the bond.

    Provo providers had no clue what the fiber could do for them compared to the incumbents service offerings.

    Are there statements all cut from the same cloth of opinion not based in reality or supported by evidence?

  13. Ben Saunders says:

    I agree with what you are saying Ben. It is amazing to me that so many cities can get really, really excited about fiber, but in Provo it was practically a non-event. Maybe because the city did little or no Marketing and PR when they got the thing built. I remember alot of excitement during the time they did the trials in the Grandview area, then it seemed to fizzle.

    You have to wonder why they spent the $60 million to build this if they didn’t see the advantages.

  14. Capt. Video says:

    I disagree.

    I think Provo has done much more than any other local city. During the build and trial in Grandview (as you mention) they were very public, but even afterwards, you will find strong mention of iProvo in many of the monthly Mayor’s newsletters that went to every Provo home with the power bills, the Mayor would often speak of the project, it was included in every “State of the City” address (given each year)and I know I myself presented at meeting like Rotary, Chamber of Commerce’s, etc. City employees were asked to sign up.

    When customers came in to the Power Company to sign up for a new Power account they were asked if they would like to sign up with iProvo. Provo held a number of community meetings in local schools whenever a new area of town was released. Giving out info and signing up customers.

    Compared to UTOPIA cities, Provo City has been extremely active in promoting the fiber network.

    I don’t think I or anyone has said fiber is not better than coax or copper. But currently the services delivered are very similar and until the fiber network deliver more innovative services that cannot be delivered via copper/coax, there is little advantage to end uses. That does not mean the fiber is not better.

    My involvement in this thread was more focused on the simple statement (or mis-statement?) that the service providers on iProvo had no clue what fiber could do for them compared to the incumbents. Trying to make a broad statement like “You have to wonder why they spent $60 million to build this if they didn’t see the advantages.” misrepresents the issue. If those are the things you “wonder” about you really don’t understand the issues that are really faced by UTOPIA, Broadweave or iProvo.

    If just building a FIBER network were the answer, those networks would all be successful. But it’s not about the fiber or copper, while fiber is “sexy” and people like fiber…or “digital”, you need to cover the most basic things…are you offering a service people want to buy at a price they are willing to pay? A service better or cheaper than the competition?

    Only when these networks do that will they be successful in my opinion. It goes without saying that they must also get the word out that they have a better or cheaper service.

    But like you…sometimes I wonder…I wonder why UTOPIA would spend $500+ million and have little more (or less?) than Provo got for $60 million?

    Is that the total UTOPIA debt with interest? Over 1/2 a billion dollars? $1.6 million a month for 30 years?

    …and your spending time wondering about iProvo’s vision or wisdom?

  15. Jesse says:

    Capt: I think you’ve got some bad numbers again. Provo stands to spend a LOT more than $60M on iProvo when you account for the parts of the network that were built using grants and forcing developers to lay conduit in advance for them. UTOPIA also laid a lot more backbone than Provo did, all the way from Payson to Tremonton. You’re making an apples-to-oranges comparison.

  16. Capt. Video says:

    I will surely grant that Provo had some advantages in cost to build by owning the power company and having conduit in the ground. I’ll also grant that UTOPIA has significantly more fiber backbone. You are correct that I was just comparing homes passed or subscribers. Perhaps not a good apples to apples comparison.

    Are my numbers bad for the total debt load? Is the 1/2 a billion dollar number wrong or just how much they got for the money?

    I thought the bond payment was $1.6 million a month for 30 years? Is that wrong?

  17. Jesse says:

    What was wrong was the “bang for the buck” assumption. It’s easy to say that UTOPIA has a bond liability that’s over 8 times as much as Provo, but it doesn’t reflect the real costs of both projects and what has been build.

    Sorry if I’m a bit snarky about it, but I’ve run into this particular inaccuracy more times than I can count, several of them by your hand. And you should know better about the real costs of the project and what they’ve accomplished.

  18. Ben Saunders says:

    You can talk all day long about what Provo accomplished for $60 million, but what have they got for that money except the reamining $40 million dollar debt and a fiber optic network that they have handed over to an under-capitalized newby company. The look at the end of the day is not good and it’s only going to get worse. The rumbling I’m hearing is getting louder all the time.

    The good thing about Utopia is that they are commited to proving that they can provide services on fiber that are far beyond those on copper and coax. This will make them successful.

  19. Robert says:

    I also am hearing that the cash-flow problems are getting worse for some of the entities involved. Anyone have a calendar handy?

    I guess when Utopia has these kinds of issues then it will be appropriate to discuss their demise. Until then they are working hard to make it happen and deserve the benefit of the doubt.

Leave a Reply

Your email address will not be published. Required fields are marked *