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So now that the Salt Lake City Council has decided not to build UTOPIA, where does the embattled fiber-optic network go from here?

"We plan on going forward," said UTOPIA director Paul Morris. "It was a good project with Salt Lake City in, obviously they had good (customer) numbers, but having them out doesn't mean it kills the project."

Yet, having Utah's largest city as part of UTOPIA could have been a huge boost to realizing the network's success. Salt Lake City's absence not only means a much smaller network to work with, but it also leaves a geographic gap in which officials will have to join northern UTOPIA cities, such as Brigham City, Roy and Centerville, with their south-valley counterparts.

Morris said Salt Lake City's decision does leave a lot of uncertainty, but he adds he is confident the network will not only be built but be self-sustaining. According to Morris, UTOPIA will need a customer base of 120,000 over the next seven years in order for the system to be viable. That means three out of every 10 residents would have to be a UTOPIA customer. Morris said his financial experts have estimated that with 11 current cities, the 3/10 customer base would be estimated at 140,000. AT&T had asked that the customer base be at least 100,000 for it to join as the network's first service provider.

Opponents, such as Qwest's Utah president, Jerry Fenn, have called UTOPIA's projected rates more than optimistic.

With Salt Lake City out of the UTOPIA picture for now, Morris said there are several factors working against, and in favor, of UTOPIA. The cost of the network will slide from the estimated $540 million to about $400 million, Morris said. But along with lower costs comes a smaller customer base, which means UTOPIA cities may have to pay out more.

In the original business model, Morris said cities were asked to put up about 39 percent of the total cost for building the network in each respective city in sales tax. The sales tax revenue would be used to back bonds for the construction. If UTOPIA fails, however, cities could stand to loose millions in tax revenue. Although they have yet to calculate exactly how Salt Lake City's decision will impact UTOPIA's business plan, Morris said it is likely that participating cities will be asked to pay a larger tax backstop — around 42 percent.

Morris said UTOPIA officials plan to put together a new financial plan to evaluate if UTOPIA will stand on its own. Although he feels it will still happen, Morris did leave the door open for failure. "UTOPIA has to stand on its own," Morris said, adding the system should not be a burden to supporting cities. If they cannot make the business model self-sufficient, Morris said he will have no problem closing down and letting UTOPIA slip into obscurity as a once-proposed project.

UTOPIA supporters remain optimistic that the system will be built. "We're confident that the numbers will make it very clear that UTOPIA will move forward with the 11 other cities," said Arthur Brady, direc- tor of Utahns for Telecom Choices.

But could UTOPIA actually be growing soon? Although he refused to give specific names, Brady said he knows of some six Utah cities, including one in the Salt Lake Valley, that are mulling the possibility of joining UTOPIA. Brady mentioned that the interested cities are not among the 18 original cities that make up UTOPIA's core. If they were to join UTOPIA, Brady said each city would have to hold a series of public hearings and ultimately put the bond issue to a public vote.

Morris said in the coming months, officials will be doing some hard number crunching to get their proposal ready for review by lenders. "We first had wanted the dust to settle on which cities are in and which are out," he said.

When asked how UTOPIA will deal with bridging the gap between northern cities and those in the south, Morris said he anticipates the network will run through West Valley City and leap to Centerville in Davis County. Although quite an expensive endeavor, Morris said money budgeted to connect Salt Lake City to surrounding cities has now been freed to deal with such logistics. But hard numbers have yet to be produced.

"The timeline won't change," Morris said of the next step. Officials say they plan to have financing secured by midsummer, with construction of the network to begin in July. Under their plan, construction of the network, which will mainly involve stringing fiber cable on existing utility poles, will begin in several cities simultaneously.


E-mail: gfattah@desnews.com