BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

For Taxpayers, Broadband 'UTOPIA' Anything But

Following
POST WRITTEN BY
Kuper Jones
This article is more than 9 years old.

It goes without saying that the internet -- and easy access to it -- has become an essential and common part of our everyday lives. Consumer demand for round-the-clock web connection is continually on the rise. This demand has created a competitive, responsive and innovative broadband industry that is constantly evolving to satisfy consumer demand. Even so, there are still some folks who want the bureaucracy in the business of providing internet service by soaking taxpayers to pay for so-called “municipal broadband” -- in other words, government owned broadband.

Not surprisingly, municipal broadband projects have experienced widespread failure across the country, and it appears that the ironically-named Utah Telecommunication Open Infrastructure Agency (UTOPIA) has become the poster child of why municipal broadband doesn’t work.

UTOPIA has been a failure and a thorn in the side of Utah taxpayers from the beginning. Since 2004, UTOPIA was running operating losses for nine years straight. According to UTOPIA’s own financial reports, at the end of FY 2013 UTOPIA had net assets of negative $146 million. Despite asking local governments for $13 million in sales taxes annually, UTOPIA has struggled to stay alive over the past decade. As if that wasn’t bad enough, UTOPIA has accrued more than $500 million in debt for Utah taxpayers with no path to success in sight.

Utah has finally realized that the government cannot effectively build out and maintain a statewide broadband infrastructure and is considering handing over the reins to an Australian capital firm. In the coming weeks, the eleven participating UTOPIA cities will have a very big decision to make regarding their participation in the program. They have three options:  1) they can opt to go along with the Australian firm’s takeover of UTOPIA, which would mean a public-private partnership with government retaining ownership of the network. If they agree to do this, all residents in the participating cities will be subject to a $18-$20 monthly tax that is described as a “utility fee”, regardless of whether they subscribe to UTOPIA or not. 2) They can sell their network in attempt to pay off some of the huge debt accrued, 3) do nothing and let the network fail.

All of the options available are in no ways a solution to the mountain of debt brought by UTOPIA’s failure. Handing off the network to the Australian firm will subject residents to a tax hike to pay for a service they may not be utilizing while also leaving them responsible for the $500 million debt. One of the most alarming aspects of this deal says if a citizen refuses to pay the tax or is unable to pay their UTOPIA bill on time, UTOPIA bill collectors can have other utilities, such as water, shut off as a penalty. Even though government will maintain ownership of the networks, policies decisions and penalties made will be made by unelected officials. This deal just doesn’t spell good news for Utah citizens.

The option that seems to make the most sense, while it will still be painful, is selling the network. Selling the network won’t fully relieve the debt already accrued by UTOPIA, but it will put a dent in it while also removing government control from the broadband network that has plagued Utah for over a decade.

Officials in the 11 participating cities have an opportunity to partially alleviate the pain and great burdens that have been caused by UTOPIA’s failures.  UTOPIA has failed for over a decade, it is time for elected officials to accept this and recognize that continuing the failed project, increasing taxes, and keeping government in control of this network is certainly not the solution to this problem.