Proposal to save UTOPIA

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Orem city is considering a proposal to forge a public-private partnership (PPP) with Macquarie, an Australia-based investment group, to complete the UTOPIA fiber-optic infrastructure and network.

There are two meetings scheduled to present the proposal to the public: June 5 at 5 p.m. and June 19 and 6 p.m., both at the Senior Friendship Center at 93 N 400 E. All other involved cities are also holding public meetings to discuss the proposal. Students and members of the public are encouraged not only to attend, but also to ask questions and give their input.

“The city council has made it clear that they want to hear from as many residents and businesses as they can. It’s the student population that often goes unheard from. We don’t hear from them often on issues. This is an issue that affects them directly,” said Steve Downs, assistant to the city manager for Orem.

The decision must be made by June 27. The city council is voting at 6 p.m. on June 26. It’s not a final vote; the council is voting to accept the first milestone of four, which will allow them to continue to consider the partnership. There is a financial commitment – if the cities commit and back out later they will be responsible for a portion of the research cost.

If some cities decide to go commit to the next step of the proposal and some don’t, the cost of the build out may change.

“Macquarie has suggested that if the majority of the cities go forward, they’ll be willing to do it. It also depends on which cities. The biggest cities involved are Orem, West Valley, probably Midvale and Layton. Even though there’s 11 cities involved, if those 4 cities back out, then it may not make sense for them to do it,” said Downs.

Under the proposal, Macquarie will complete the network in 30 months, which is 27% complete now. The network will reach every residence and business in Orem, Lindon, Payson, West Valley, Midvale, Murray, Centerville, Layton, Brigham City and Tremonton.

The fiber-optic internet will be treated like a utility. Every residence will be charged a monthly “utility fee,” whether they use it or not. The anticipated fee for residences is $18-$20, for multi-dwelling units is $9-$10 and for businesses is $36-$40. The fee will not be charged for the first six months to give time for the construction of the network.

The fiber-optic internet will offer a 3 MBps speed and a monthly cap of 20 GB. The network will be open to internet service providers that can offer upgrades to faster speeds (up to one GBps) and higher caps.

The construction of the network will stop outside of houses and the ISPs will be responsible for the installation inside the home. A resident can reject the construction on their property, but will still be subject to the utility fee.

The Utah Telecommunications Open Infrastructure Agency (UTOPIA) project was originally proposed in 2002 and was hit with a series of misfortunes that delayed works and sent the project into $185 million debt. Orem’s share is $2.9 million a year, which goes up 2% every year until 2040.

Orem and the other cities involved have few options. They can strike a PPP deal with Macquarie or Digital First (another smaller company that has expressed interest), try to sell off the existing, incomplete network (for context- Provo sold their fiber-optics to Google for $1), dump the project, which would not erase the debt, or continue funding the network on their own.

The contract is planned to last for 30 years and then Macquarie will step out.

Those interested can read the full proposal here

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