Private Company Offers Plan to Overhaul UTOPIA Network

Apr 30, 2014

The struggling fiber optic network UTOPIA may be partnering with a private company to offer high speed internet access to every home in the 11 participating Utah cities where it operates.  Australian investment firm Macquerie Capital has released a proposal to fund UTOPIA’s overhaul. It would require city-wide utility fees from every household in the network.

UTOPIA was conceived 12 years ago by officials from several cities to offer businesses and homes Internet speeds of one gigabit per second, much faster than what was offered by private vendors at the time. Since then, the network has struggled with mismanagement, unfinished grids and low sign-up rates.

Macquerie Capital’s proposal aims to build out the UTOPIA network, make it financially viable, and help pay back more than $500 million in public debt. UTOPIA board chair and West Valley City Manager Wayne Pyle says this global firm has the resources and the know-how to make UTOPIA work, and to answer the critics who say government doesn’t belong in the high speed internet business.

“We’ve been being criticized for 10 to 12 years for having the audacity to hope to be able to put together a system like this, something no government or collection of governmental entities ought to be in the business of doing,” Pyle says. "Well here we are, we’re answering that question, by bringing in the privately incentivized and motivated and experienced people that can do it.”

Macquarie’s proposal would require every household in the network to pay a mandatory utility fee – estimated at 18 to 20 dollars a month.  The charge would apply even for residents who don’t want the basic Internet service. Royce Van Tassell, Vice President of the Utah Taxpayer’s Association and a vocal critic of UTOPIA, says citizens should be aware that the fees will go up over time.

“They’re talking about somewhere between 1.4 billion and 1.6 billion dollars over 20 years, and that’s a very sizable tax increase for those 11 cities,” Van Tassell says.  

The Macquarie Capitol Group is pitching the proposal this week to elected officials in Orem, Layton, and West Valley City. Member cities have 60 days to decide if they want to approve Macquarie’s plan.