Category Archives: News

News articles about UTOPIA from around the country and around the world.

Schedule of Macquarie-related meetings

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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.

BREAKING: Midvale is the first UTOPIA city to say ‘yes’ to Macquarie’s Milestone Two

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midvale_logoIn a unanimous vote, Midvale becomes the first UTOPIA city to choose to move forward with the proposal from Macquarie. Milestone Two will hammer out the fine details of the proposal to build, maintain, and operate the network for 30 years. The city will still need to vote to accept that finalized and detailed offer when it is completed.

Other cities are still taking feedback on the high-level overview presented in Milestone One. Murray will have an open house June 5 at 6:30PM. Centerville and Lindon both submitted detailed lists of questions and got public responses to all of them. This is shaping up to be an incredibly open process, a stark contrast to a UTOPIA that was scared to discuss anything in public for fear of being attacked again.

Keep your eyes open for postings about more upcoming votes and remember, the votes are just to move forward on getting fine details.

What you need to know about Macquarie’s proposal to UTOPIA

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Macquarie has let their proposal out and it looks like they’re planning to make good on many of the rumored details. There’s also a number of very attractive points that will make this an easy sell for new cities to join. Some highlights:

  • The network build will be done in existing pledging UTOPIA cities in 30 months.
  • The fee will be $18-20 per month per subscriber address with a 50% discount for MDUs and a 100% premium for businesses. This amount will be indexed.
  • Utility fees will have a grace period of 6 months from construction to allow ISPs to hook people up.
  • The free tier of service will be 3Mbps symmetrical with a 20GB monthly cap. All service providers must agree to offer it as a condition of being on the network.
  • Cities stand to earn between $1.0B and $1.5B depending on the take rate. That’s 2-3 times the existing debt service. On the low end, it would drop the Macquarie fees by almost half. On the high end, it could almost entirely cover the Macquarie fee.
  • Speaking of revenues, the cities stand to rake in another $100M annually when the network reverts to their control in 30 years.
  • Macquarie will be aggressively promoting the network and intends to extend it to any city that wants to accept its terms. Cities without existing debt service may end up making a good bit of money on the deal.

The worst case scenario is that it is a wash with what they have now except the network gets completed and everyone gets free service. In the best case scenario (which I still this is a little too conservative), they end up paying almost nothing for the network. I’ll just come out at say it: any city council that doesn’t move forward on this deal is committing an act of deliberate and malicious fiscal malfeasance against their city and its citizens.

Macquarie has already presented this information in Utah County and will be presenting again Wednesday April 30 at 7PM at Layton City Hall and Thursday May 1 at 8PM at West Valley City Hall. Show up and make sure the cities know you want this deal to happen.

The end of the road? It’s Macquarie or bust for UTOPIA

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utopia-logoPart of the visit with UTOPIA was figuring out how they’re moving forward and assess the financial health of the operation. Unfortunately, it looks like despite hitting a number of financial targets, they’ve fallen short financially. Right now, they’re still running a deficit on operations (I hear around $150-175K-ish a month) and it’s not closing as quickly as they need to meet the home stretch of the UIA plan. Right now, break even is about three years out as they concentrate on business customers. Given that subsidizing operations isn’t an option, that puts them in an operational pickle.

They were pretty candid with me when I asked questions. The switch from focusing on homes to focusing on businesses came at the explicit request of the cities. Business accounts cost about the same to get hooked up as residential, but they generate about four times the revenue. Even small businesses are worth about two homes a pop. With limited resources, they have to focus on those specific areas to at least try and cover operating expenditures.

The biggest barrier to most businesses is the brand name. Despite offering great speeds at great prices and excellent SLAs, their PR kind of bites. (Shocking, right?) The limited deployment means it’s much harder to serve multi-location businesses, though service providers have been creative in using UTOPIA where it can be had. Small businesses are challenging because many of them want the reliability of UTOPIA over cable and DSL, but there’s not a cheap enough product offering for them.

There’s some bright news, though. They’re signing up about 60-70 new accounts per month without doing much marketing or direct sales, although they could be doing so much more by using a Irvine SEO Company. There’s been a marked increase in high-dollar products like gigabit and even 10Gbps circuits. Most of the cities (including Layton, West Valley City, Murray, Orem, Brigham City, and Tremonton) are using the network extensively for city operations and reducing their own internal costs. If you’re in a completed footprint, you can pay to get hooked up. If you already have the wire on the side of the house, they don’t even have to roll a truck to do it. And operational costs are much closer to being covered than they ever have been.

And yes, the silver lining is pretty thin right now. Despite all of the good things UTOPIA has done (building to ~95K homes with ~11.5K taking service, offering cheap gigabit, 17 service providers, etc), money matters. I support UTOPIA, but the stark reality is that without any money, it’ll die on the vine. It’s here because the early problems, including an illogical build plan, the Qwest right-of-way lawsuit, and constant legislative meddling, tripped things up right out of the gate

I’ll be blunt: either the Macquarie deal happens or we could be waiting decades for fiber to get to more homes. UTOPIA is pretty fortunate to be negotiating with a company that’s bringing a lot of mutual benefit including the cities retaining ownership of the network. If it doesn’t pan out, though, I think we’re hosed.

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

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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.

Why is it so hard to get TV on UTOPIA? There’s no money in it

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Sourced from Wikipedia

Sourced from Wikipedia

Earlier this week, I sat down with UTOPIA to discuss the Macquarie deal and their general operations. One great part of these sit-downs is that I can get candid answers to some of your common questions. Some of you have asked more than a few times about TV service. Right now, only Beehive Broadband and Brigham.net sell video service to new customers using UTOPIA’s headend and Veracity is using their own. Most providers sell satellite packages to plug the gap. Why? Because video doesn’t make money.

Yes, it’s true. Video is a break-even product at best. Look at the numbers from any cable provider and you’ll see the same story: video and voice make data customers more “sticky”, but it’s the broadband that pays the bills. They’ve quickly become commodity products that help the revenue side but don’t do much on the profit side. The consensus at FTTH conferences is that video isn’t something that most of them want to do.

So what does this mean for you? Right now, you’ll have to fall back on satellite TV or pick one of the providers that does video service. Since Brigham.net is sticking to Brigham City, that means Beehive or Veracity. This doesn’t mean that all hope is lost, though. UTOPIA has been talking to its video partners about an over-the-top live TV service to plug the gap. It would be sold Netflix-style, but it would have all of your favorite TV channels and possibly some good on-demand stuff too. It’s a ways out (I’d guess years), but it’s where we’re all headed anyway.

BREAKING: Todd Marriott Steps Down as UTOPIA Executive Director

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In a surprise move, UTOPIA Executive Director Todd Marriott has stepped down and is no longer with the agency. The press release is light on details, but I can only assume that with the Macquarie deal in the works and UTOPIA meeting its financial targets under its five year plan, he may have felt like he’s completed course-correcting the ship.

Below is the press release. I’ll see if I can find out more.

UTOPIA Marriott Press Release_ 1 29 14.doc

UTOPIA Goes for Cheap Gigabit

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Remember the rumblings about UTOPIA’s upcoming announcement last week? Well, it’s here, and its’ huge. Starting today, seven providers will be offering gigabit service for as low as $64.95/mo. If you’ve already paid off the connection fee, this makes it the same or less than Google Fiber in Provo on six of them. Here’s the full price list:

Of note is that UTOPIA has added another provider, WebWave. They’ve been using UTOPIA for backhaul to wireless towers in Davis County since May and are now going to be a full-fledged ISP on the network. With nine total providers to choose from, UTOPIA’s offering more competition for your business than ever.

If you’re content on the lower-priced tiers, SumoFiber and XMission have already switched all customers to 100Mbps. Are you planning to pony up a little more for 10x the speed? I know I would.

Feeling the Google Heat: Comcast will bump speeds to 250Mbps/50Mbps in Provo

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Competition is good, and Comcast is just now proving it. I spoke with one of their sales guys who confirmed that Comcast will be offering a package of 250Mbps/50Mbps for $70 starting in September, but only in Provo. (Sorry, everywhere else.) This is in direct response to Google Fiber coming to town and will include a new modem with a built-in 802.11ac router to take advantage of the speed bump. It’s unknown if this speed tier will land in any other cities in the future.

This is yet another story proving that having a fiber network in your town benefits everyone, not just subscribers.

XMission Gives UTOPIA Customers a Free Speed Bump

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If you’re using XMission on UTOPIA, you probably noticed a nice little bonus last night: all 50Mbps customers got a bump up to the full 100Mbps for no extra charge. There’s a few people left to be switched, but it should be done within a couple of days, tops.

One thing to note is that if you aren’t seeing those speeds, you may need to upgrade your router. Most routers, even newer ones, don’t include a 1Gbps WAN port which often serves as a bottleneck. Older 802.11 a/b/g routers also create choke points on the wireless side. All said, that’s a pretty nice problem to have, isn’t it?