Sometime during the next two months, the city councils of 18 Wasatch Front cities will be asked to guarantee a portion of their sales tax revenues to help fund an ambitious, $470 million project to wire every home and business to fiber optic cable.
The leaders of this venture have dubbed it UTOPIA, for, roughly, Utah Telecommunication Open Infrastructure Agency. They say it is government's role to wire everyone to the high-speed Internet, just as it is government's role to build roads and sewers. And they say this is the ticket to an economic development bonanza. Some are calling it the most ambitious project of its kind in the world.
But it has all the signs of a boondoggle.
UTOPIA's proponents say the project is certain to meet the Internet needs of residents and businesses for at least 20 years, which would be the life of the bonds they hope to secure to finance it. They have impressive figures to share about the speed and bandwidth fiber optic provides, and they compare it to the relatively meager capabilities of DSL and other commercial offerings.
But predicting the future can be a tricky thing. When it comes to telecommunications, it can be downright foolhardy.
Imagine riding a time machine back to 1983. You could listen to experts of the day talk about the nation's telecommunications needs for the next 20 years, and then wonder to which planet they were referring. Certainly not Earth, circa 2003. You would find an age where cellular phone networks still were mere concepts, and where some of the largest computer companies were banking on main frame systems carrying the day for the foreseeable future. You would also hear experts talk about how Beta is far superior to VHS as far as home videos were concerned. DVD's? Never heard of them.
Since then, a lot of people have made money, and a lot have lost everything, trying to invest in the future. That's how the private market works, but governments shouldn't be taking such risks.
Yes, fiber optic is far superior to anything currently available. Yes, it is inherently superior to wireless communications. But 20 years is an eternity in the telecommunications realm, and private markets tend to have minds of their own. It would be dangerous to leave taxpayers vulnerable to an industry that is best wrestled with by men and women who want to risk their own cash.
We don't hear an overwhelming demand from the public for this. Much of downtown Salt Lake City already has been wired with fiber optic cables, the result partly of demand and partly of overexuberant investors during the last decade. But most residents seem satisfied with the Internet and cable services offered by private firms, some of whom soon will be able to offer service to 90 percent of state residents.
The private providers, meanwhile, are not at all happy with UTOPIA, which they view as competing with their own expensive efforts to connect residents.
If government's role is to connect everyone to the World Wide Web, just as to connect everyone to a road, then UTOPIA's plans would be the equivalent of building four-lane superhighways in the early 20th century, when tin lizzies were putt-putting their way around.
It may be difficult to stop this trend. Some Utah cities are bent on creating similar networks on their own. Provo is well ahead of UTOPIA. Murray built its own limited fiber optic network awhile back. Now some people there want to sell what Murray has to UTOPIA, at a loss. As the mayor explains it, the cost of fiber optics materials and installation have come down a lot since the city laid its lines.
That may offer the best lesson, actually. When the market is ready, private companies will build fiber optic networks, or perhaps something even better. The good thing about that approach is that taxpayers will benefit, rather than having to pay.
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