The recent success of UTOPIA and its sister agency, UIA, call for a fresh look at how municipally owned fiber networks can bring better service and lower cost to many internet subscribers.
Recently described by the Utah Taxpayers Association as a failed project, this characterization is simply not true. While UTOPIA did indeed have a checkered and difficult start, the change of business models and advent of UIA took advantage of the lessons learned from the experience, and, after five years of compounding momentum and success, we are proud to announce that UTOPIA and UIA are back and here to stay.
UTOPIA provides critical broadband services to residents, businesses, schools and city facilities throughout the UTOPIA communities. The agencies’ customer counts have stabilized and are growing. UTOPIA and UIA report over 15,000 subscribers with a combined revenue of approximately $1.3 million per month. This equates to about $86 average per subscriber, not the $30 cited in the report the Utah Taxpayers Association used.
UIA (the agency created in 2011 to fund new phases of the project) will be seeking a new $13 million bond for continued growth of the system. UTA states “the effort to make UTOPIA and UIA a success for taxpayers will never be realized.” The truth is that UIA is already an enormous success. The last three UIA bonds, totaling $65 million, have funded significant expansion of the system with revenue growth that is more than covering all the UIA debt service. UIA already has the revenues today to cover the next bond before it happens so this is an especially low risk to UIA and its member cities.
UIA has budgeted this year not only to fund its expenses and debt service, but also to pay a dividend back to its member cities from its profits. Member cities can use this dividend to start reducing the cost of the original UTOPIA bonds or use them for other city purposes. The new UIA bonds will be used to further expand the coverage of the network and will generate even more profits that can be used to complete the buildout and pay additional dividends that can be used to further offset the debt burden from the initial phase of the UTOPIA project.
The residents and businesses of our communities that have connection to UTOPIA and UIA love the system and are amongst the industry’s most loyal customers. UTOPIA and UIA have brought the best in technology and services to our communities while also saving them money on their monthly internet, phone and video services bills. UTOPIA recently contracted a third party to evaluate the satisfaction of the services available on UTOPIA and received a Net Promoter Score of 60, which is an exceptionally high satisfaction score. As mentioned, those who have the service love it and it continues to add subscribers in all areas where it is available.
The Utah Taxpayers Association's recent op-ed correctly suggests that the vote for the next UIA bond will likely pass. Why wouldn’t it? The communities yet to be completed are anxiously awaiting expansion of the fastest and top-rated broadband option in Utah to their areas. UIA has a track record that proves that demand and revenues are more than sufficient to cover its expenses, and does this while bringing our communities to the forefront of broadband availability.
Wayne Pyle is the city manager of West Valley City.