Lawmakers hear broadband praise

The United States needs municipal-broadband ventures like UTOPIA and iProvo, and it's much too soon to consider pulling the plug on them, an attorney who represents local governments in such matters told state legislators Wednesday.

Jim Baller, senior principal of the Washington, D.C.-based Baller Herbst Law Group, touted the importance of viewing fiber-optic networks as necessary infrastructure for communities to meet the high-tech demands of residents and businesses.

"We are in a broadband world," Baller told the Government Competition and Privatization Subcommittee. "Much of what we do going forward is going to move toward a broadband platform. ... Countries that have access to broadband, particularly in the higher speeds, are going to be successful, and the ones who fall behind may have difficulty catching up for years or even decades."

Baller's comments come less than a month after Steven Titch of the Heartland Institute, a Chicago-based nonprofit research and education organization, addressed the committee. Titch asserted that allowing government entities to become key players in broadband is a bad idea because it puts the public and private sectors in competition.

Titch argued that municipal-broadband systems fail because governments underestimate costs and overinflate the number of customers they will attract.

That's been the case with the Utah Telecommunication Open Infrastructure Agency, a consortium of Utah cities creating a fiber-optic network to every business and household in the 14 member cities.

UTOPIA originally projected 2006 as its operation break-even period but has moved that back to 2008. Revenue was projected to start coming in by 2009; now UTOPIA officials are saying 2012, according to Leif G. Elder, legislative policy analyst for the subcommittee.

Provo's fiber-optic network iProvo has had its financial problems, too. The network has not generated enough income to completely cover the payments on the $40 million bonds backed by sales-tax revenue.

To make the payments, the Provo City Council has loaned $3 million to iProvo over the past two years. This year, instead of a loan, the council authorized $1.2 million from an expected sales-tax surplus to cover another expected shortfall in the iProvo budget.

Despite UTOPIA and iProvo falling short of early projections, Baller told lawmakers there's "no credible evidence" that suggests municipal broadband systems don't work.

"It's much too early in the life cycle to judge," he said. "In my view, UTOPIA and iProvo are tremendous assets to Utah and for America as a whole."