Utah’s multi-city Utopia network (wikipedia) is taking perhaps one last shot at making its wholesale municipal fiber project work, says Telephony Magazine, with a revised model, new management and a new focus on business customers.
The 11-city fiber-to-the-premises project has been under increased pressure from taxpayers since revenue shortfalls led it to ask participating cities to double their investment in the project last spring so that construction could continue, says the on-line magazine.
“The cities have come down on them and basically said, ‘You guys [have] got a year to make this work,’” said Lane Livingston, chief executive officer of Fibernet, a local ISP that recently signed on to sell services on Utopia’s network. “So Utopia has regrouped and said, ‘We’ll go after wherever there’s real money.’”
Key to Utopia’s new focus is a move to redirect network deployment toward businesses rather than residential customers. Though the project was initially conceived as a way to bring universal broadband to underserved residents, critics say that model isn’t lucrative enough.
When the Utah Telecommunication Open Infrastructure Agency (UTOPIA) was launched in 2003, it planned to boost the broadband competitiveness of Utah cities, although the largest city, Salt Lake, did not participate. UTOPIA only supplies the fiber optic network. Private companies would provide the content and services, and pay fees to the network to make their products available.
“For a lot of different reasons, they didn’t get the last mile in in lots of places before they needed to refinance”, said Hugh Matheson, Utopia’s new communications director. “There’s fiber that goes into some footprints but doesn’t go down streets. There are places where there’s fiber under the streets that hasn’t been marketed. They were kind of going maybe too many places at once.”
Utah’s other well-known muni network, iProvo, was acquired and privatized this year by Broadweave Networks. The acquisition makes Broadweave one of the largest Fiber-To-The-Home (FTTH) network operators in the country.
The Salt Lake Tribune reports that that Mstar and DynamicCity, the network management company for UTOPIA, also put in bids to either manage or run the city’s fiber optic network, says freeutopia.org.
iProvo passes 36,000 homes, businesses, government buildings, and schools at speeds up to 1,000 times faster than cable or DSL.
Provo spent $47.5 million total, they sold for $40.5 million, so in the end the city’s out about $7 million. iProvo was the largest municipally owned fiber-optic network in the United States.
iProvo was struggling with churn and other problems similar to Utopia’s. They ditched the wholesale-only model, which Utopia still shares. Separating service providers from the network operator created inefficiencies, said Steve Christensen, iProvo’s new CEO.
Utopia’s reformation will be an uphill battle, concludes Telephony Magazine. Its political troubles may make potential customers nervous about how long it will be around.
Meanwhile, the incumbent in Utah, Qwest Communications, is now aggressively rolling out fiber to the node, with 7-Mb/s and 20-Mb/s services – something it wasn’t doing when the initial case for Utopia was being made.
Broadband Properties has an indepth story (pdf) in their October issue. Tim Wu compared U.S. broadband providers to OPEC in a recent New York Times op-ed piece, a charge the CTIA thinks is ridiculous.