Macquarie is probably dead, and that’s probably okay

macquarie_logo_2638While I wasn’t able to attend the latest UTOPIA board meeting (bit of a drive from Cedar City), I did get a summary of what was discussed during that meeting. One of the things that came up was the long-delayed Macquarie deal. For all intents and purposes, it’s most likely not going to happen. There appears to be slow action on a binding public vote and the utility fee was very unpopular (and wasn’t coming down). The board has voted to pay Macquarie what they are due and take those reports as valuable information to plan for the future with no further action. Right now, that’s probably okay.

Think back to when Macquarie first entered the picture. The network wasn’t expanding much if at all, mostly because the focus was on signing up commercial customers to plug the operating expenses gap as quickly as possible. Several cities had openly rancorous relationships with UTOPIA despite being stakeholders in it. Heck, Oremites ran an initiative petition to overturn… I’m not sure what exactly, but dagnabit they were certain that an angry public arglebargle session would save them about a hojillion dollars.

Fast forward a little over two years. UTOPIA is probably in the best shape it has ever been in. They have or will soon hit operational break even, where all operating expenses are now covered by revenues. Between remaining UIA money and the RUS settlement, they have operating capital they can use to expand the network. In fact, expansion is now underway in Perry, Layton, Midvale, and West Valley City. All of the expansion is being done to demand and the cost is landing squarely on subscribers.

Even the public attitude is different. I don’t see baseless fact-free editorials against it with any notable frequency. Even the Utah Taxpayers Association has gone uncharacteristically silent. Orem elected pro-UTOPIA candidates. Murray has been actively working on ways to maximize the network in their city. Payson reportedly even shows up to board meetings with regularity now. From many sources, I hear less “how do we get rid of it” and more “how do I get it in my house”. The importance of competitive, fairly priced, and high performance broadband has entered the mass consciousness in a way that I haven’t seen it before. Most importantly, highly visible failures by incumbents to deliver the kind of broadband nirvana they’ve been promising for decades has made the public highly cynical to their claims.

There is still work to do. UTOPIA has a lot of network to build to serve every address in member cities. There are a lot of areas badly neglected by incumbents that don’t have any kind of viable competition. Google is great for those that have it but creates a lot of have nots and replaces one duopolist with another. The companies who are doing interesting competitive things can’t really do it at scale. Despite these challenges, one thing is certain.

We won the war.

Yes, I’m declaring victory. It’s taken nearly 10 years of running this blog, but the hearts and minds part of the game is more-or-less over. It’s all mop-up operations from here, scattered battles that I think we’ll have little trouble seeing through to victory.

PS No, this blog isn’t going anywhere. I’m working on improving broadband options in Cedar City (since I live here now) and will still be an advocate for UTOPIA and municipal broadband systems. Those jobs are just going to be a lot easier when I’m not re-hashing the same old debate I’ve been used to for a decade.

Tagged , . Bookmark the permalink.

12 Responses to Macquarie is probably dead, and that’s probably okay

  1. Scott McIntyre says:

    I was recently in the UTOPIA office on Redwood Rd and overhead someone say they would need another bond before the end of the year. I wasn’t party to the discussion so I don’t know if it was UTOPIA related or not. Was another bond mentioned in the meeting notes?
    Also, what do you think about SB0114S01? It looks like it is written just for Layton to conduct a ballot poll on Macquarie.

    • Jesse says:

      I don’t have any details on that, but my conjecture would be issuing any remaining UIA bonds (which are already approved by participating cities) to be paid back by subscribers. I can’t see any way the cities would issue any other bonds..

      SB114 probably is tailor-made for Layton (since the sponsor is from there), but it can be a useful tool for any and all cities UTOPIA or not. I wouldn’t mind getting a ballot question going here in Cedar City to try and push something forward.

  2. Scott McIntyre says:

    The Layton Mayor seems to think that there is a way forward with Macquarie. It may be under a new deal though. He hasn’t given me too many details about it but he hopes to move forward without all the other UTOPIA cities.

    • Jesse says:

      It depends on how flexible Macquarie wants to be. If they were willing to go with a much lower utility fee (<$10) in exchange for a larger slice of the ongoing revenues, the cities could probably sell that. Coming in around $25 was far too high to be politically viable no matter how good the math was. If you're explaining, you're losing, and everyone was spending a lot of time explaining how system revenues would drop the effective utility fee quite a bit.

  3. Richard says:

    Would ISPs be interested in offering service to locations with UTOPIA already installed but not active? Seems like low-hanging fruit. I know several folks who stopped using UTOPIA in the very early days, but are now paying a lot more for less from the incumbents.

    • Scott McIntyre says:

      Are you saying that portions of UTOPIA network that were lit previously have gone dark? Or did the users simply stop using it?
      If it is the latter, what is stopping them from just calling up the ISP and starting service again?

      • Jesse says:

        There’s a lot of addresses where there is service available and nobody is using it. Most of it is from people who have moved and the new owners didn’t know what was there. Murray tried an effort to get those addresses taking service again with limited success. It seems like it should be a slam dunk to nab those addresses, but for some reason they just haven’t marketed it well.

  4. Jason Russell says:

    Thanks for reporting, Jesse. Even out here in Miami I still have some curiosity about UTOPIA, obviously. So, UTOPIA got their settlement from RUS? I hadn’t heard. That can only help.

    If or when we come back to Utah, maybe we’ll have fiber from UTOPIA too. 🙂

  5. Pingback: $25 monthly FTTH tax proposal fades away in Utah

  6. jared says:

    Not sure if you’ll see this, but I’m new to this learning what I can. Is there any resource that can help me find if I have access to this and if not when it might be available. I’m building a home in West Layton.

    • Jesse says:

      Sorry for the very late reply; just noticed this caught in the spam filter. You’ll need to talk to Layton City to see if they have plans to roll out service in your neighborhood or not. Right now UTOPIA is covering operating expenses and it has not been determined how any excess will be used.

Leave a Reply

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