UTOPIA awaits a ruling

Whether Utah ultimately gets the multimillion-dollar UTOPIA fiber-optic network may ultimately be up to the U.S. Supreme Court, not the local cities and companies fighting over it.

A key ruling by the court, expected within the next three to four months, on whether cities can build telecommunications networks using tax dollars could have a profound effect on the Utah Telecommunications Open Infrastructure Agency.

According to the U.S. Telecommunications Act, no state statute or regulation may prohibit "or have the effect of prohibiting any entity to provide any interstate or intrastate telecommunications service."

The nation's highest court is expected to decide whether "any entity," which at this point includes private telecom companies, would also include public entities such as cities. If the rights of cities to build networks is upheld, legislation such as SB66 now before Utah's Legislature, which seeks to limit how cities can spend tax dollars for networks, could be in trouble.

The 18 cities that plan to participate in UTOPIA say they want to build a data network in which companies would offer video, Internet and other services to Utah customers at speeds 10 times faster than current broadband service.

Companies such as Comcast and Qwest have claimed that cities are using tax money to compete against their services. SB66, sponsored by Sen. Bill Hickman, R-St. George, intends to limit the way cities spend tax dollars for data networks. The bill has passed the Senate and is about to be assigned to a committee in the House.

A similar scenario played out in Missouri in 2002. When a group of cities banded together to build a high-speed data network, local telecom companies and the national telecom associations claimed unfair competition.

The conflict prompted the Missouri Legislature to pass a bill banning cities from building networks other than for city business, 911 emergency services and education.

The legislation sparked a legal fight that has ended up at the doorstep of the top court. The 8th Circuit Court of Appeals upheld a city's right to built a network, said Jim Baller, whose Washington, D.C., law firm argued on behalf of Missouri cities before the U.S. Supreme Court last month.

A Supreme Court decision in favor of municipalities would also cast doubt upon the legality of state measures such as the one now being deliberated in Utah, Baller told the Deseret Morning News in a phone interview from Washington, D.C.