Urquhart, Quit Taking From Cities

Representative Steve Urquhart says in a recent post, (see here) "I want to go on record now, to state that Utah should not bail out cities for the huge indebtedness they will incur because of their involvement with UTOPIA."

I personally find this offensive because when I was on the Woods Cross City Council, it seemed that Utah always tried to reduce the amount of money that cities received from the state. The amount of Class C road funds that went to cities was reduced while the state attempted to turn over maintenance of many state roads to the cities.

Almost every legislative session during my term as a City Council member, it appeared that the state legislature attempted to balance their budgets on the backs of the cities and towns of this state.

So my message to Representative Urquhart is while it is fine to say that the state shouldn't bail out cities for what you perceive as bad judgment, take a look in the mirror and make sure that you are not looking to be bailed out by the cities for what they may perceive as your bad judgment.

Representative Urquhart is flat out wrong in his post when he says that UTOPIAs "product is inferior to the competition." This says to me that he obviously hasn't done his homework on the issue. If he hasn't studied it enough to know that the product is not inferior to the competition, what else is he missing about the issue? As for many other comments in Representative Urquhart's post, I find a response by Jesse Harris (see here) addresses those much better than I can.

Qwest going "fiber to the node"

A Salt Lake Tribune article from April 9th, (see here) had some interesting news about Qwest investing in more fiber in Utah. I have included a portion of the article below.

Utah consumers interested in getting ultra high-speed Internet service may no longer have to wait for the financially struggling Utopia network to keep its promises.
Qwest Communications International Inc., as part of a $300 million company-wide initiative, this year plans to invest millions of dollars to beef up its Wasatch Front network by running fiber-optic lines to many of the neighborhoods it serves.
The technology, known as "fiber-to-the-node," initially will provide Internet users with speeds of up to 20 megabytes per second, and eventually 40 Mb/s, said Jerry Fenn, who oversees Qwest's operation in Utah as its president.
Qwest later this month will reveal how much it intends to spend in Utah and where the new service will be available, he said.
Service providers on the fledgling Utopia network now typically offer speeds of 15 Mb/s to 50 Mb/s, although much faster connections are possible.
"We're planning to have this [fiber-to-the-node technology] available to over 200,000 homes and businesses in Utah by the end of the year," Fenn said, indicating the footprint will be expanded as customer demand grows.

What I find most interesting about this is that on October 16, 2007 at the Woods Cross City Council meeting, I remember the Qwest representative stating that they don't believe in the business plan of running fiber to homes. I know that this new strategy is not running fiber to the homes but it is bringing fiber a lot closer to the homes than before. Has Qwest's thoughts on this strategy changed, or do they still only believe in "fiber to the node" and not to the home? It would seem to me that they would be able to do things a lot cheaper if they decided to run their services over the fiber that UTOPIA has already installed and quit fighting against UTOPIA.

And they're off...

The Utah State Legislature is in session now. This causes me to reflect on a few things. I've posted previously about the Legislature's reluctance to pass bills that concern their ethics. (see here, here, and here.) It looks like this year will be no different in that regard.

Another thing that I've been thinking about has to do with UTOPIA in particular, but, in the way the Legislature acts in general. Our state legislators constantly complain when the Federal Government forces them to do things in a certain way. They don't seem to have a problem, however, doing the same thing to local City Councils. This is just as frustrating for the City Councils as it is for the State Legislature when they get it from the Federal Government. Two bills that currently strike me as acting this way are HB75 (here) and HB76 (here). It will be interesting to watch not only these two bills, but, also other bills that limit the control that our State Legislators allow local elected officials to have.

Finally a decent response to anti-UTOPIA article.

The Salt Lake Tribune finally published a nice opinion response (see here) to their anti-UTOPIA article that ran last week. The response points out many flaws with the original article. I don't ever remember UTOPIA being "sold as a risk-free proposition." If everything had gone according to plan, it would have been a low-risk proposition. What UTOPIA didn't count on was being sued by Qwest early on. I really like how the opinion piece also points out the fact that Qwest or Comcast could both provide service over UTOPIA. They both choose not to. This is their choice. Isn't America all about providing choice? Some may wonder why they choose not to? They have a monopoly. The government already paid for Qwest's infrastructure.

I found another interesting thing to point out. The Tribune published a letter to the editor (see here) that aligns with the anti-UTOPIA article. It is written by a man named Robert Fuehr. In it he says things such as "Proposals that appear too good to be true usually are and should be viewed with great suspicion. The UTOPIA assurance that the $202 million in city money would "never be at risk because UTOPIA would almost certainly succeed" now looks terribly hollow and false. " This sounds pretty tame and could sound even understandable if we were to believe that Robert Fuehr were a normal citizen. Unfortunately Robert Fuehr is not a normal citizen. He is the former vice president of US West (pre-cursor to Qwest.) So what would Robert have to lose with UTOPIA? I would guess that, being a former vice president, Robert holds stock in Qwest. Anything that could damage that stock price would be detrimental to Robert. Yes, Robert, just as you say in your letter, some things "should be viewed with great suspicion."

Woods Cross Council must act on UTOPIA

I have become aware of a bill that will be discussed during the upcoming state legislative session. The bill is titled "MUNICIPAL ENTITIES AND CABLE OR TELECOMMUNICATION SERVICES." This bill in its current form would cause some major hurtles for any city that wanted to join UTOPIA. It was supposed to be discussed in the Government Competition and Privatization Subcommittee interim meeting yesterday. The committee decided to "have staff work on modifying this bill so that it is more acceptable to all parties involved." They also said that they will discuss it again during the legislative session.
The major issue that I see with this proposed bill as it's currently written is that it takes decision making powers away from our local elected officials. It says that a municipality must hold two public hearings, instead of the one currently required. It also says that the city must hold an election to let the voters decide on whether to join the entity. Currently, the law says that a council may hold an election.
The changes to the bill also place limits on cities joining a municipal entity such as UTOPIA. Any city that has not joined UTOPIA by May 5, 2008, will have to pay for the state auditor to issue an audit report of UTOPIA stating that UTOPIA has had a positive net operating income for at least one year, among other things.
I have two major questions about the changes to this bill.
1) How would our City Council members feel if similar restrictions had been placed on the formation of the South Davis Recreation District? (I've already mentioned in a previous post, that the South Davis Recreation Center competes with private industry.)
2) How would our State Legislature feel if our national government leaders placed similar restrictions on their actions?

UTOPIA in Woods Cross

The Woods Cross City council is currently looking into becoming a member of the Utah Telecommunication Open Infrastructure Agency (UTOPIA). As part of this process, a City Council work meeting was held on Tuesday. The council invited representatives from UTOPIA, Qwest, and Comcast to be in attendance. The city came up with a list of questions for each of the entities. Citizens in attendance were also allowed to ask questions. I'll give my point of view of what happened. There is also a blog at www.woodscrossutopia.com where you can get another resident's point of view.
The UTOPIA representatives first heard the questions at the meeting due to Gary Uresk e-mailing them to the wrong person. They answered as many of them as they could without proper research. I'll highlight a couple. They mentioned that the projected take rates (take rate is the percentage of people who do sign up for the service) from the feasibility studies were between 8% and 40%. Overall the projected take rate was about 17%. They have a overall take rate today of about 25%. UTOPIA has agreements with providers who actually provide the service to the end users. UTOPIA itself doesn't provide the service to the end user. I mention this because, there was a question asking What % of the time is your system fully functional to the end user? UTOPIA would not really be able to answer that question as they only provide the service to the providers. UTOPIA did mention that they have Service Level Agreements (SLA) with their providers for 99.999% uptime. They also mentioned that because they focus on being an "Open Infrastructure," Comcast and Qwest could run their services over UTOPIA. To date, they have chosen not to. UTOPIA representatives also mentioned that if pledge monies needed to be invoked (which they haven't been yet) it would be somewhere between $3 - $8 per household. I think it is important to remember that if there is a high enough take rate, the city would receive revenue from UTOPIA. Even if the take rate is as low as 25% overall, there would not be any public money used.
Comcast went next and mentioned several areas in the city where they do not provide services. This includes the Cahoon Meadows, Field Crest, and a majority of the Clover Dell subdivisions. They hope to get service in these areas "soon." I noted that soon to a corporate entity probably is not the same as soon to a resident who wants the service. I asked Comcast if they had a limit on their service as it relates to how much I could download or upload. They mentioned that there was a limit, but, would not state in gigabytes what that limit was. I knew this would be their answer as I saw them featured on a "Get Gephardt" segment a while ago. Their representative mentioned that if you were a heavy user, you could get a commercial account that runs about $100 per month. The regular "limited" account is about $35 per month. The only reason I mention this, is because Xmission, who provides service across UTOPIA does have a limit of 100 gigabytes that they clearly state on their website.
Qwest went next and dodged most of the questions by saying that the information was proprietary. They stated that they would not be comfortable telling which areas in the city didn't have DSL available when there were competitors in the room. I found this very interesting, since Comcast had just finished telling Qwest which areas Comcast doesn't offer service. I'm more than willing to tell all Qwest competitors that I can't get DSL at my house in the area of 1450 West 1900 South. I asked, "When I go to Qwest's website, it says that I qualify for DSL, however, when I actually try and get DSL I'm told that my line doesn't qualify. In the information that Qwest will give to the City Council, will my house show up as having DSL available?" The representative dodged this question better than anything I've witnessed before. I felt like this was a yes or no question. The Qwest representative said that some areas qualify for DSL, but there are technical limitations in some of the lines that mean those lines can't get DSL. My reason for asking this is that if Qwest provides the council with a list of areas that do have DSL available and my house is on that list, then that list is not accurate as I cannot get DSL at my house. Qwest would be over stating how much of the city is really covered.
I also found it interesting that Rick Earnshaw stated that he "has a real problem with spending public money to compete with private entities." I stood up in the open session that followed and commented that it is ironic to me that he has a problem with public money being spent to compete with private industry when this happens all the time. Rick Earnshaw voted for Woods Cross joining the South Davis Recreation District which competes with private gyms. In fact, Xcel Fitness claimed in a Davis County Clipper article that the taxpayer funded recreation center put them out of business in Bountiful.