Category Archives: UTOPIA

Doing voice on the super-cheap? SumoFiber has it figured out

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A great thing about smaller providers is that they’re always looking at the crazy ideas to come up with something really cool. A great example of that is how SumoFiber is approaching home phone service. Most providers either resell a SIP trunk or roll their own in-house SIP solution. (Veracity is an example of the latter.) SumoFiber took a different tack: why not add inexpensive E911 service onto a Google Voice account? (Update: This is in addition to traditional VoIP solutions.)

The secret sauce is an adapter from a little-known company called Obihai. It’s an inexpensive ATA that lets you hook up Google Voice accounts and use a normal home phone with them. That means unlimited long distance to the US and Canada and cheap calls to pretty much everywhere else. Google Voice is a free service, and E911 trunks are pretty inexpensive (often under $1/mo). They’re doing what I did at home about a month ago, so I can attest to the reliability and seamlessness of the service.

Could you buy the adapter and configure it yourself? Probably. The advantage of the provider doing it is that they’ll handle all of the hardware, setup, and QoS for you. A gearhead like me may be able to figure it out and deal with the occasional service provider hiccup from congestion, but Joe User could find it tricky, especially finding an E911 service provider to provision. Even so, the only QoS I can implement is on my local connection, not all the way to the ISP’s backhaul connection.

This is a great way to add value to an existing service and really embraces the “dumb pipe” nature of an open access network. This is one of the many ways that UTOPIA providers can differentiate themselves against incumbents and each other.

PS They’re also going to be bumping all 50Mbps customers to 100Mbps just like XMission and match the price too.

If you’re a UTOPIA service provider doing something a little off the beaten path, let me know and I’ll be happy to write about it.

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?

If UTOPIA is a boat anchor, why is Orem the only one sinking?

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Over the last year or so, it seems that Orem has taken a real hammering over UTOPIA expenses. Witness the latest low-information rant masquerading as publishable material for further evidence of this. The common refrain is that UTOPIA causes nothing but financial despair for cities. If that’s the case, why aren’t we hearing more stories like this about other cities?

Maybe it’s because UTOPIA isn’t the giant sinkhole people like to think it is. As I’ve discussed before, the issue Orem (and Taylorsville, and, to a lesser degree, West Valley City) is facing is all about having made bets on sales tax revenue from retail driven by out-of-town shoppers. That worked for a few decades, and Oremites got to enjoy some great city services and frozen property tax rates for that time.

But then the perfect storm hit. Retailers ran out of space in fast-growing Utah County and moved up to American Fork and Lehi. The recession killed off a lot of companies not nimble enough to weather it. And, most importantly, online retailers like Amazon swooped in and ganked away business on everything from books to TVs to furnaces (yes, they sell those). Any city who depended too heavily on retail got creamed.

Smart cities developed office space to diversify their tax base. Murray scored the Intermountain Medical Center. Midvale turned a superfund site into a fiber-loaded business park. And Orem? They lost Adobe to Lehi while a giant mixed use development stayed half-finished for years. And why? Because retail is what mattered to them.

This has nothing to do with UTOPIA. It has everything to do with the city overextending itself in myriad ways during good times. The responsible thing to do would be to explain the problem to the voters and undertake the long-overdue rebalancing of revenue streams back onto other sources. Opportunists, of which there are many, instead bury the boring issue of an imbalanced tax base under a hot-button scapegoat to suit their own agenda. Don’t let them get away with it.

How likely is it that Google Fiber takes over UTOPIA?

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Even before Provo announced that Google Fiber would be taking over iProvo, there’s been a lot of speculation that Google Fiber could potentially take over UTOPIA. UTOPIA made their pitch with 1100 other cities, and I produced my own video explaining why a partnership would be a good deal for both parties. Since then, Google has drastically altered the original terms of the arrangement, throwing both open access and municipal involvement under the bus (unless you consider providing tons on concessions “involvement”). Despite Google and UTOPIA being in talks shortly after the RFI closed, I don’t think we’re likely to see any kind of takeover or partnership between the two unless there’s concessions from one or both sides.

I think the largest sticking point is going to be open access. UTOPIA has repeatedly stated that their goal is to offer a world-class infrastructure that any private company can use to provide services. It’s not just enough to provide a third pipe; the network must allow you to pick between companies that differentiate themselves on what they can do with it. This kind of competitive environment has been proven to drive innovation and lower consumer prices across the board. While I have no doubt that Google’s network will do both, it runs the risk of being so superior to existing options as to become a new monopoly.

Google’s focus has been on residential customers. While this is a critical segment for service, there’s almost no mention of business needs. Yes, small businesses and startups can probably do just fine using the same tier as residences, but many need more than that. UTOPIA’s biggest customer uses 20Gbps of bandwidth. If all of their users on the network were on gigabit, they’d need even more to keep up with all of them. The lack of focus on the business end of the pipe degrades the value of the gigabit connections for residential customers. UTOPIA has a complete end-to-end vision; Google does not.

Another problem is the financial terms of any arrangement between the two. Google got a very sweet deal on iProvo, effectively a perpetual free lease with a $1 security deposit. The city is still going to have to pay off the debt on the asset themselves. In exchange, they’re hoping that improvements done to the network will improve it enough that it will be an economic net positive. I think the city could have negotiated a better deal and Google would still be doing well on it financially. I have no doubt that the UTOPIA cities, who are much more eager to pay off the bond, would hold fast for better terms.

If the numbers from iProvo translate to UTOPIA, Google would have to spend somewhere in the range of $40-50M to connect houses currently passed by the fiber and upgrade them to gigabit. This doesn’t include building fiber rings to areas not yet covered. That could easily add another $150-200M to the tab. Should they manage decent take rates (35% of customers paying for service split evenly between Internet-only and double play, and another 35% taking the freebie service), they’d earn $78.1M per year on expenses (including the bond) of about $36M per year. At the high end of finishing the network, it would take them almost six years to break even.

Given that Google seems to be aiming for seven-year commitments, that might be a price they’re unwilling to pay. The cities would have to make some kind of concession to sweeten the pot, and it would likely include tossing existing providers off the network and covering at least some portion of the bond debt. These actions would cause a decent amount of backlash both from residents as a whole and the power user subscribers who have been evangelizing the network for years. If Google’s goal truly is to increase broadband penetration, I’d like to think they would accept any offer that doesn’t make them lose a small fortune.

Legislation Alert: HB273

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Some years, muni telecom gets a break. This year isn’t one of them. Rep. Keith Grover has introduced HB273 which would effectively ban Provo from using utility surcharges as a way to cover iProvo debt payment shortfalls. It’s unclear as to if this would have any effect on UTOPIA, but the bill does include some vague language concerning charging “just and reasonable” rates. Depending on how the legislation is implemented, this could prevent UTOPIA from differentiating wholesale prices depending on volume or require that they match rates with other networks.

Any way you slice it, this is a bill very explicitly targeted at removing operational flexibility from municipal networks. I highly recommend you contact Rep. Grover to urge him to reconsider.

The long knives come out: Tribune articles on UTOPIA

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Bad news sells, and the Tribune seems to think that business is good. Over the weekend, they published a long series of articles on UTOPIA that follow the all-too-standard pattern of raking the network over the coals with many of the same rehashed arguments from years past. Four of the nine articles make reference to network debt in their headlines (often spuriously), and eight of them use negative references there. Despite the overly negative tone of the coverage (no doubt fueled by the opinions of the editorial staff), there’s a few pieces of useful and interesting information to be gleaned (not to mention corrections to be made). Continue reading →

Local groups whipped Oremites into an unhinged frenzy

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Tuesday night, the Orem city council approved a property tax increase to plug some budget holes. A lot of the people present (some council members included) chose to pin the blame squarely on UTOPIA even though that’s less than accurate. I wasn’t there, but the recap from Twitter made it abundantly obvious that the crowd had a lot more anger than information.

Who do we blame for creating an unhinged and uninformed angry mob? Precisely the people who tried to walk away with a non-chalant whistle: The Sutherland Institute and Utah Taxpayers Association. Both groups have been painting a picture of apocalypse from the tax increases while trying to pin the entire thing on UTOPIA. Neither of them discussed the shift from sales to property taxes that dozens of cities are currently involved in, nor did they try to inform the public with alternatives to raising taxes. This purposeful attempt to leave citizens uninformed created some of the wackier and downright dangerous suggestions of the night, things that both organizations need to now own as a byproduct of whipping the citizenry into a fenzy.

And what were these suggestions of fiscal suicide? Some people suggested either that the city wasn’t directly responsible for the bond or that they should just stop paying it. Anyone with any financial know-how knows that you can’t unilaterally declare that you don’t owe money on a loan or that you’ll just stop paying bills you don’t like. If the city chose to do that, it’s credit rating would be worse than junk and it would be a true financial catastrophe for the city. More than a few people suggested that the city declare bankruptcy over it, can you imagine all the list of credit repair companies would sprout up everywhere! They obviously don’t know that UTOPIA’s payment comprises a scant 3.2% of Orem’s total budget, nor do they seem to get that the consequences would be roughly the same as not paying the bond. It would be akin to burning down the house because you found a piece of rotten timber.

Another popular suggestion is to sell the network, but this, too, is divorced from financial reality. At the end of the payments, the cities (and presumably the subscribers who paid for installation) end up owning the network free and clear. The only way a sale makes sense is if the sale price would exceed the estimated value of the network at the end of the payments. Anything less would mean a wider loss, and there is no sale that will cover the price of the bond. Evidence suggests that a sale would go poorly anyway. American Fork “sold” AFCNet, but the company that “bought” it hasn’t been current on its interest-only payments and will likely not have the required $500K lump-sum payment when it comes due in a few months. Provo tried to sell iProvo twice without success. Both of those networks cover their respective cities whereas UTOPIA does not have a contiguous service area. Odds are good that any sale would result in a substantial loss of value.

The core problem is that both UTA and Sutherland (the latter of which I expected better from) presented cherry-picked facts and fabrications designed explicitly to incite anger. This was done in lieu of presenting a full slate of facts (like the trend in dozens of cities of moving from sales taxes to property taxes), their proposed solutions, and a rationale for the conclusion. When you take that approach, you create a mob mentality problem rather than seeking solutions. When you call them on it, they back off with a weak “well, we didn’t mean that” which comes off as trying to weasel out of the situation they created.

You can see an obvious common thread from the suggestions and actions. None of them actually think through the full consequences of the actions proposed, they’re “shoot from the hip”, and they’re emotional responses to try and undo a decision that’s over, done with, and now has to be owned. These folks (citizens and think tanks alike) could learn more than a few things from mayors like Mike Winder and John Curtis who, despite not supporting municipal broadband, have accepted that their job is to make the best of the situation.

(You can read more from the Daily Herald here.)

UTOPIA Joins the Exclusive 1Gbps Club

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Today UTOPIA announced that they will be offering 1Gbps connections to every home they pass. Word on the street is that getting a connection that’s faster than your hard drive (!) should run in the neighborhood of $330-ish per month if you’re leasing the connection. Right now, only a handful of providers in the country offer such blistering speeds to residential customers.

Some other fun facts from the media day:

  • UTOPIA’s highest bandwidth customer consumes 20Gbps worth.
  • Centerville is completely built out. If you live in Centerville, you can get service right now. About 500 residents have already chosen to do so, just over 10% of total households.
  • Homes with multiple set-top boxes will have the greatest need for 1Gbps connections. Currently, 4-5 of them can saturate a 100Mbps connection.
  • You could, in theory, get 10Gbps at your home, but UTOPIA isn’t all that comfortable leaving $10K worth of electronics sitting in your house.

You can check out pictures of the event on Google+ or Facebook.

Here’s UTOPIA’s full press release: Continue reading →

Press Release: UTOPIA supports DISH Network’s Efforts to Provide Consumer Choice

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FOR IMMEDIATE RELEASE

Media Contacts:

Robyn Geist 801-364-0088 ext. 106 or 801-680-1135

Brian Wilkinson 801-364-0088 ext. 102 or 801-673-5615

 

 

UTOPIA Supports DISH Network’s Efforts to Provide Consumer Choice

 

DISH Network faces lawsuit from TV networks over its newest technology:

a user-enabled commercial skipping feature called AutoHop

 

Salt Lake City (June 1, 2012) – UTOPIA, the open-access fiber-optic network formed by 16 Utah cities to provide critical advanced communications infrastructure to their residents, is announcing strong support for one of its newest services providers, DISH Network, and its efforts to promote consumer choice in the face of a lawsuit from three of the major television networks over DISH’s ad-skipping AutoHop technology.

“Among one of the many reasons we partnered with DISH Network as a service provider on the UTOPIA network is because they are at the forefront of providing unique entertainment options and more choice to consumers,” said Todd Marriott, Executive Director of UTOPIA. “DISH Network recognizes that consumers desire the options to be able to view the content they want, when they want it, and, most importantly, how they want it, particularly when they have already paid for it. Competition and consumer choice were fundamental reasons UTOPIA was formed as an open access network”

DISH’s AutoHop technology allows its customers to enable a feature that automatically skips over commercials in primetime TV programming from the major networks that has been recorded on consumers’ DVRs. It does not skip over ads when subscribers are watching the programming live.

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About UTOPIA

The Utah Telecommunication Open Infrastructure Agency, more commonly known as UTOPIA, consists of a group of 16 Utah cities that joined together to form a state-of-the-art fiber-optic network and provide critical advanced communications infrastructure to their residents. The network offers fiber-to-the-premises technology allowing for faster services that are uninterrupted by copper wiring or shared connections with neighbors. Its open access model fosters competition among private sector service providers who offer Internet, ubee routers, television, telephone and other services, giving customers the freedom to choose their own service providers, the best prices and the best service.

For more information on UTOPIA including member cities and business and residential service providers, visit www.utopianet.org.

UTOPIA Proving a Popular Scapegoat for City Revenue Issues

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A lot of cities have been talking property tax hikes lately, and the most certain thing about all of the proposals is that elected officials are going to look for someone or something to blame. In UTOPIA member cities, blaming the fiber network has become the easy go-to solution, especially since so many mayors and city council members weren’t involved in the original decision. The problem, however, is that this blame is completely paving over a deeper problem of city tax structure that’s boring, doesn’t fit the anti-UTOPIA narrative, and is a much larger problem for city budgets. Let’s take the examples of West Valley City, Orem, and Taylorsville, the latter of which is not a UTOPIA member city. In all three cases, they’ve called for large (as a percentage) property tax increases to make up for lagging sales tax revenues. So if UTOPIA is the cause of property tax increases, why would a non-member city need to more-or-less do the same thing?

Continue reading →