UTOPIA critics were right

UTOPIA's chief executive officer, Todd Marriott, is asking the West Valley City Council to ignore whatever the Utah Taxpayers Association might say about the shaky telecommunications system. An "armchair critic" is how he dismissed the group.

But rather than trying to belittle the critics, we wish someone at UTOPIA would come up with answers to the questions those and others have raised. These questions are especially important now that UTOPIA, which stands for the Utah Telecommunications Open Infrastructure Agency, appears on the verge of asking 10 of its 11 municipal partners to begin funneling sales tax dollars its way to make bond payments.

That day was never supposed to come, although the armchair critics, including this page, warned the 10 municipalities not to pledge their sales tax receipts to back 33-year bonds totaling a combined half a billion dollars. Even under the best of circumstances, those cities have tied up tax receipts that otherwise could be used for legitimate municipal purposes. Under the worst of circumstances, they will pay millions to subsidize local Internet services through an expensive fiber-optic network.

The questions we wish UTOPIA would answer are these:

Why do local governments have a legitimate interest in funding high-speed Internet, considering several private companies already do so?

Does UTOPIA really compete fairly with the private sector? If private companies overextend and are unable to pay off debts, they go bankrupt. UTOPIA can fall back on the sales tax pledges of its member cities. How is that fair?

How will UTOPIA make itself profitable enough to be self-sustaining, especially during a difficult recession?

Some defenders of the network say it has succeeded in making the local Internet market more competitive. This may be true, but at what cost? And if local taxpayers begin paying directly to keep the network alive, is that true competition?

Provo had its own disastrous experience with a publicly backed Internet network. Luckily, the city was able to sell that network to Broadweave, a private company.

But the Provo experience offers a significant reason for hope. Broadweave showed that there is a market for providing Internet service to areas with a relatively small population. Many of the cities belonging to UTOPIA believe they are too small to attract much interest from private providers.

Unfortunately, however, the UTOPIA cities don't have that much control over the network. They are committed to provide tax dollars if needed, and it looks increasingly as if money will be needed, and that all those armchair critics were right.