UTOPIA backers are still optimistic

They're either in, out or somewhere in between. As several Utah cities make up their minds, supporters of the tax dollar-backed fiber optic network say UTOPIA will happen.

Having faced an onslaught of scrutiny by the Legislature last month, cities participating in the Utah Telecommunications Open Infrastructure Agency rallied together Wednesday for the first time since the end of the legislative session to assess what will happen next.

Initially intended to limit how cities can use tax money toward telecommunications networks, Senate Bill 66 came out of the House and Senate markedly different. Packed with changes, amendments and compromises, UTOPIA Executive Director Paul Morris told UTOPIA board members the final bill was like "going through the tax code."

Morris said the bill's language is so confusing that several city attorneys have called his office, asking for assistance.

"We now know it's crystal-clear in the law that we can do this," Morris said.

So far, 10 cities have voted to pledge tax dollars to back bonds for the $540 million fiber-optic network. Three have voted to be part of it without pledging any money. Four remain undecided. Organizers of the network say the system would have 10 times the bandwidth of current broadband data services, enough to offer households Internet, video and telephone service on a single line. Supporters said building UTOPIA would provide educational and economic opportunities to participating cities. If built, UTOPIA would allow private companies such as AT&T to compete on the network for customers.

But opponents, among them Qwest and Comcast, say it is unfair to use public tax dollars to compete against private companies. Some Qwest and Comcast employees have said they worry that UTOPIA could put them out of work.

Some city officials, particularly in the smaller cities, worry about pledging 39 percent of their annual sales tax revenue to back the bonds to build the network. Although the money will be kept by the cities, it will have to be held untouched in escrow for about 20 years. In a worst-case scenario, those cities risk losing that money if UTOPIA falls flat.

SB66, if signed by Gov. Olene Walker, will allow existing UTOPIA cities to move forward but not allow any new cities to join. Cities will need a vote of their respective city councils on their willingness to pledge sales tax dollars before April 15. After that, the bill requires those cities to take the funding decision to a vote of their residents next November.