The Utah cities that are a part of the network of fiber optic Internet service known as UTOPIA should ponder the promises they have been given over the last 12 years.
The service wasn’t going to actually use any tax revenues. It was going to begin making money as soon as people began signing up in droves. It was going to be profitable if only the cities would pledge a little more of their tax revenues as collateral for more loans.
And now comes the promise it will finally, after a dozen years, fulfill its goal of bringing fiber optic cable to every home and business if only those member cities will agree to levy a fee (or is it a tax?) of somewhere between $10 and $40 to every household, regardless of whether they want the service or intend to use it. This is in addition to what those cities already pay to service existing debt.
Despite initial promises, member cities now are indeed using actual sales tax revenue to retire UTOPIA’s bonds. Some have had to raise taxes to cover those bills.
For UTOPIA, short for the Utah Telecommunications Open Infrastructure Agency, prosperity is always just around the corner. And for the member cities, each new step puts them deeper into a hole that seems never-ending.
The latest push is part of a proposed deal with the Australian Macquarie Capital Group, which is seeking to manage the network for the next 30 years, but which can’t do so without extracting even more money from residents of those cities.
On Tuesday, the Lindon City Council voted unanimously to reject the deal, after hearing from a roomful of residents. This bold move came despite the fact that dropping out of UTOPIA won’t erase the city’s obligation to pay its share of the bonds that have been issued so far.
Even so, it was the right decision, and other cities should do likewise.
Supporters say the new fee would be no different than the fees cities charge all residents for recycling services, libraries or parks. But the flaw in that argument is, and always has been, that UTOPIA is offering a service plenty of private businesses already compete to provide. Those private companies are happy to risk their own money to keep up in an industry where innovations come almost daily.
Supporters also argue their fiber optic cable provides great Internet, telephone and television service. They are no-doubt correct. One could provide almost any service to an impressive degree using the collective deep pockets of taxpayers. That doesn’t make it right, and it doesn’t make it fair to residents who don’t want to be connected.
UTOPIA’s strongest argument concerns what cities have to lose by dropping out. It is countered easily by considering how adding another layer of involvement would give those cities even more to lose.
Public officials should have greater trust in the private market. The fiber optic cable already in place likely would attract a buyer from among competing Internet providers. Even if the selling price gave cities only pennies on the dollar, it would be an honorable way to end an unfortunate experiment for all involved.