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My view: UTOPIA creates needed competition

By Christopher Mitchell

Published: Thursday, Aug. 16 2012 12:00 a.m. MDT

UTOPIA, is back in the headlines after a negative report by the state's Office of the Legislative Auditor General. And as usual, UTOPIA is taking another beating in the press.

But the ferocity of UTOPIA's opposition is puzzling. After all, UTOPIA is all that stands before the end of real broadband competition in these communities. Comcast and CenturyLink are massive corporations headquartered far away from Utah whereas both UTOPIA and the majority of its service providers are local. Even in a time of high hostility to government, it is odd to see so many rooting against the home team.

This is doubly true when both Comcast and CenturyLink consistently rank among the most disliked corporations in America, infamous for offering poor customer service. The American Customer Satisfaction Index recently pegged Comcast as the fourth most disliked company in the nation. CenturyLink found itself in 11th — "The worst fixed line telephone company."

Whereas the vast majority of Americans can choose only between a single cable company and telephone company for home Internet access, UTOPIA provides additional choices — an actual competitive market that allows local businesses to thrive. The real job creators.

Local, private companies like XMission in Salt Lake City, have a long and rich history of providing access to the Internet, predating even the largest cable companies. Calling XMission for technical support means talking to someone in the community, not someone across an ocean. And XMission's profits stay in the community.

Over the past 15 years, thousands of similar local Internet service providers around the nation have been run out of business by the big telephone and cable companies.

Comcast and CenturyLink have spent millions lobbying for changes to federal rules that benefited themselves while creating barriers to small providers like XMission. One Wall Street investor-intelligence firm, Seeking Alpha, recently recommended people buy Comcast stock because its video and high speed internet businesses "are either monopolies or duopolies in their respective markets."

It went on to say, "Further, we believe that both services have become so sticky and important to consumers that Comcast will be able to effectively raise prices year after year without seeing too much volume-related weakness."

Those with access to UTOPIA literally have more choices for telecommunications services than anywhere else in America. If residents haven't noticed, local businesses have — several have reported that they considered moving but found the telecommunications cost elsewhere prohibitively high. Without competitive pressure, the rates for business services are astronomical, dampening the prospect for new jobs.

This unique situation has come at a real cost. UTOPIA is plagued by debt and has readily admitted to past mistakes in management. But present management has corrected poor practices and pointed the network in a much stronger direction.

Across the nation, other community networks have been more successful, in part because they learned from UTOPIA's early errors. Hundreds of local governments have invested in telecommunications networks as an important piece of an economic development strategy. Publicly owned networks in Danville, Va.; Wilson, N.C.; and Chanute, Kan. are among the many that are already running in the black.

What would happen if UTOPIA disappeared today? The debts would remain, but the fastest broadband connections in the state (indeed, some of the best in the nation) would disappear. Comcast would be free to hike its rates year after year, as it does in communities that have no real choice. Some of the local businesses that depend on UTOPIA's advantageous telecommunications services would flee to other communities that have the next-generation networks in which Comcast and CenturyLink are loathe to invest.

Comcast and CenturyLink want to focus attention on UTOPIA's poor fiscal performance to distract from their own failings. But UTOPIA cannot be judged solely by the fallout from poor decisions made in the past. It must be judged by what is best for the future of these communities.

These communities need to attract jobs and maintain a high quality of life. It is hard to see how limiting the choice to two corporations with poor reputations would achieve either.

Christopher Mitchell is the director of Telecommunications as Commons Initiative at the Institute for Local Self-Reliance based in Minneapolis, Minn. He's also the editor of MuniNetworks.org.

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