In the past couple of weeks, two op-eds from people with close ties to UTOPIA have been published touting the benefits of UTOPIA. They tell a very compelling story about the vital need for a cutting-edge network accessible by all. Both op-eds gave me a serious case of deja vu.
Years ago, a good friend of mine was heavily involved in the initial stages of the UTOPIA project, and he gave me the same pitch. The two selling points for me were that UTOPIA was like roads. Government builds the roads and anyone is free to move about on them, so government in the form of UTOPIA should build the network infrastructure and ISPs and compete to provide various types and levels of service to end users. And over time, UTOPIA would become the network of choice, becoming very profitable.
I'm ashamed to admit that I bought it and even wrote my city officials in Orem asking them to give UTOPIA a try. I have since come to the regrettable conclusion that both selling points are wrong.
First, networks are not like roads. The fundamental reason that roads are and have to be a monopoly is that putting competing roads side by side, especially in a city, would be ridiculously inefficient. That is not the case with data lines. With modern fiber-optic technology, and even with older wired technology, you can put an unlimited amount of data carrying capacity in the same area. What's more, you also have the ability to pass large amounts of data wirelessly over short distances doing away with the need for any cable at all. There is no need for a monopoly because various companies are perfectly able to compete with each other.
The second point was driven home by the recent legislative audit that I called for last year. UTOPIA has operated deeply in the red every single year of its nine year existence. Where service has been available, UTOPIA's subscriber rate is around 16 percent system wide. This is well below the 30 percent they need to break even let alone turn a profit.
The problems with UTOPIA don't stop with those two points, however. The two op-eds offered several other points that do not stand up against the facts. Here are a few: If not for UTOPIA, CenturyLink and Comcast would be many people's only option. In Orem, I have a choice of not only CenturyLink and Comcast, but I can also choose from Digis, UtahBroadBand and FiberNet.
If not for UTOPIA Comcast would jack up their rates. If you compare the areas that don't have UTOPIA with those that do, you will find little difference between their rates. Given the fact that I have a number of choices, I suspect that Comcast knows very well that they would hemorrhage customers in Orem were they to raise their rates too much.10 comments on this story
We must not shut down UTOPIA because we will all be saddled with its current debt. This is true, but it is also true that UTOPIA shows absolutely no signs of turning things around, so we can have some pain now or keep kicking the can down the road and hope that the last 10 years were only an aberration.
UTOPIA made some mistakes early on, but they have a new management team in place and things are turning around. The problem here is that the "new" management team has been in place for four years. For a copy of the full audit go to le.utah.gov/audit/newaudit.htm.
Bradley Daw is a Utah representative. He represents District 60, South Orem.