Anti-UTOPIA House Bill 60

To the members of the House Government Operations Committee,

We the undersigned believe that HB60 is a bad bill for business for the following reasons.

1) It restricts UTOPIA as an entity from expanding, regardless of whether its member cities are served or not, or whether other cities would like to join. This is a punitive effort executed by the Utah Legislature that takes control away from city members and management.

2) It hobbles one of UTOPIA’s necessary needs to interconnect member cities through backbone service. These fiber optic links currently under UTOPIA ownership allow service providers who may not have facilities in a UTOPIA member city to provide services throughout UTOPIA, increasing member city choice and competition. How are these interconnections supposed to happen under HB60?

3) It limits UTOPIA from collecting funds from potentially high take-rate areas outside member cities. Funds that could otherwise be used for payback of UTOPIA member city debt.

4) It limits UTOPIA from venturing into unincorporated municipalities, with no governing entity that would otherwise join.

5) It is discriminatory against advanced services. Municipal electrical line services are exempt from these restrictions as long as they have been in operation for over 50 years. Fiber optics have only been in broad deployment since the early 1980’s.

6) UTOPIA is under consideration for a dramatic ubiquitous expansion financed by a private entity. This is the wrong time for the Utah Legislature to throw down potential restrictions that could negatively influence their consideration. If the Utah Legislature wishes cities to be enabled to pay off their UTOPIA bonds, they will welcome all potential offers and take a “hands-off” approach.

Pete Ashdown – XMission
David Burr – Sumo Fiber
Randy Cosby – Infowest
Lane Livingston – Fibernet
Dan McComas – Reddit

iProvo Sale and RFP

Over a year ago, Provo City put out an RFP titled, “Request for Proposals for Partnership Opportunities with Telecommunication Service Providers on the iProvo Network”. This was a public invitation to companies like XMission to provide services to the citizens of Provo over the fiber network installed by the city. You can read the full text of the RFP on the Provo city website.

XMission was excited to respond to Provo’s request. This was in fact, the first time we had been invited to participate at all. The process that Provo originally engaged in to select their disastrous first Internet provider, HomeNet, and then subsequent providers was never extended to XMission. This in spite of the consistent calls from Provo residents to iProvo to allow us to participate on their network.

After responding to Provo’s request, XMission had a number of meetings with iProvo which were welcoming and positive. The last meeting we had with them was in December when we were told that we were on track to be a participant and some wholesale pricing was reworked. Yesterday, iProvo held a press conference where they announced the sale of the network to a company named Broadweave.

I attended the press conference and asked a simple question of the mayor, “Do you think the sale of a public asset should be done through a public process?” His response was that it was done in a public fashion and that I only needed to read the RFP to understand that the network sale was a possibility. The RFP title states, “Partnership Opportunities with Telecommunication Service Providers on the iProvo Network” with the keyword being “on”. Later in the document the “goals and design for the Network Project” are laid out, with the first being, “To provide the citizens of Provo a full range of competitive choices for telecommunications services and applications.” How exactly does selling the network to a business which will lock out out all other businesses meet this goal of the RFP? As recent as two weeks ago, Mayor Billings was claiming there were offers, but “due diligence” had prevented a sale. If this is the same “due diligence” that selected HomeNet, an out-of-state company which used forged documents to prop up its financials, then it would have been enlightening to see how Broadweave was selected.

Unfortunately, none of the proceedings in selecting Broadweave are public. Provo officials have handled the public trust much like a private entity in signing “non-disclosure agreements” and not being fully clear that iProvo indeed was for sale. Although the claim is made that Broadweave is paying $40 million for the network, they are simply assuming the bond debt, which will fall back to Provo City if they can’t sustain their business model and Sorenson Capitol backs out of the transaction.

I wish Provo the best success in their efforts, others have been more critical. Some have claimed my comments to the press are so much “sour grapes”. Let me be clear, my interest in iProvo since its inception was being a provider on an open-competition network. I believe there is a very good reason private interests worldwide are not building ubiquitous fiber networks — the payback is beyond 20 years. There is no doubt in my mind that if Qwest, Comcast, and all data service providers were restricted to providing service over one municipal fiber network, it would not only succeed, the public would see cheaper rates and superior service. The lack of proper RFP for the sale of iProvo hands the network over to a single private interest that will control rates and service.

I have been told that there were other national and international companies who expressed interest in purchasing iProvo. Would they have kept the network open to service provider competition? Would there have been a better deal instead of just assuming the bond debt? Without a proper RFP process in place for the sale, the public will never know.

Since the beginning of iProvo, XMission has wanted to help the network succeed. Instead, we have been inexplicably stonewalled and blocked at every turn. What is certain now is that there will be no open competition on the iProvo network. Eventually this country will realize that fiber infrastructure is not a luxury that can be sustained by a business model, but a necessary investment in our economy. Sadly, it is going to take another decade of mismanagement and lost promises by the private sector before that is realized.