Cities should provide fiber infrastructure. Pete Ashdown. Salt Lake Tribune Guest Opinion

                                                                   Pete Ashdown XMission.com

Note:  Pete Ashdown is the founder and CEO of Utah’s first independent and oldest Internet service provider, XMission.  XMission is a UTOPIA Internet provider all over the state.

UTOPIA’s financial audit by the state has revealed what many have suspected for years, that it is not profitable. Yet what form of infrastructure is?  

UTOPIA provides broadband service in 11 Utah cities. Today, communication infrastructure is no less critical than transportation, sanitation and clean water. Government is not a business, but the infrastructure it provides contributes to a robust business environment.

Consider how private businesses rely on government funded infrastructure. Why don’t entrepreneurs clamor to build the next generation of roads? Why don’t airline companies get off the public dole and build their own facilities? Why are sewer facilities so rarely handled by anyone else but the state?

Does effective infrastructure cost? Considerably. Does it make a profit? No.

I admit that I was overly optimistic towards UTOPIA’s acceptance rate when it was being pitched in 2004. Yet the primary criticism of UTOPIA now is not that it is a defective network, but that it was supposed to be free of cost.

As the president of Utah’s first Internet provider, XMission, and an original UTOPIA participant, I have paid considerable wholesale rates to support this network. However, I have seen financial shenanigans by other providers which should not have been tolerated past 30 days.

This fiscal mismanagement, combined with baseless legal attacks by the entrenched incumbents, Century Link and Comcast, have made providing advanced data infrastructure to Utah an uphill battle. Some are calling for dissolution of the network and defaulting on the loans. They have declared UTOPIA an outright failure because it has not turned a profit.

Google Fiber in Kansas City has been highlighted as an example of how private industry can do it better. However, we now know that Kansas City has given considerable concessions to Google in order to win its favor.

The search engine giant was granted free access to almost everything the city owns, including rights of way, power, office space, anchor institutions, marketing and direct mail. How can a billion-dollar company refuse such an opportunity for an instant monopoly?

Soon, Kansas City residents will hand over their Internet privacy to a company that has had a poor record of protecting it. Unfortunately, when they go to switch services, there will be no other choice. Google originally announced their fiber network would be open to other providers. After Kansas City was selected, that option quietly disappeared.

There is a better way. As should be done with any considerable city expense, the voters should decide whether fiber infrastructure is an essential part of a city budget and whether to bail out UTOPIA’s bonds. This will eliminate the most wasted part of UTOPIA’s expenses — the interest.

The voter, not the mayor, the city council, the state Legislature, or The Salt Lake Tribune, should decide whether open fiber networks should sit with roads, water and sewer as an essential and cohesive part of city infrastructure. If so, no further rights-of-way or permits should be granted to corporations seeking to create their own communication monopolies.

Like every shipping company shares the roads, all Internet, telephone and video companies will have to use the same infrastructure to deliver their service. Fewer individual “cables” will go from pole to pole, polluting our skyline. Every street will be constructed with all the facilities required for a 21st century business or home, mostly underground.

Fiber optics are the end game for all communications. Utah’s voters need to decide whether we trust Century Link and Comcast, who have not delivered in the past 20 years of Internet growth, or to move forward with this technology as an essential part of city infrastructure.

Pete Ashdown is the founder and CEO of Utah’s first independent and oldest Internet service provider, XMission.

Pete Ashdown, XMission CEO. Opinion. Salt Lake Tribune.

Set UTOPIA free GUEST OPINION. Gary D. Brown. Heraldextra.com

Set UTOPIA free

  GARY D. BROWN

As a resident of Orem and a long-time watcher of UTOPIA, I find it ironic that John Valentine is advocating a legislative solution to the UTOPIA mess when it is the Utah State Legislature who created the mess in the first place!

When UTOPIA was first proposed, I was all for getting a fiber optic connection to every home and business in the at-that-time 17 cities. In my opinion, the original business model was sound; install fiber to each home/business and offer data, voice, and television services at the retail level.

Of course, the entrenched incumbent businesses, namely US West (it became Qwest and now CenturyLink), Comcast, and AT&T, who would face real competition, sent their lobbyists to the state legislature and after some intense lobbying, got the legislature to eviscerate the UTOPIA business plan by passing a law that prohibited community-based consortiums such as UTOPIA from offering services at the retail level.

This "small" change meant UTOPIA would have to incur the cost of building out the fiber network, but could not offer services itself; instead, it would have to induce other service providers to offer the retail services and UTOPIA could only offer wholesale network services to the retail service providers. This single act of legislation doomed UTOPIA, which is exactly what the commercial competitors wanted.

How successful do you think CenturyLink, Comcast, or AT&T would have been if they had been forced by government to install their telecommunication or cable networks, but could not offer any services direct to customers? They would not have been successful at all!

Artificially limiting UTOPIA to a wholesale business model guaranteed it would incur huge debts with an inability to repay them because it cannot service the debt with the much-lower-revenue wholesale model. In addition, the retail services offered would be fractured, having no integrated single model of presentation and interaction with consumers.

In addition, it is doubly ironic the incumbent service providers yelled "fire" concerning UTOPIA and competition in the public marketplace to the state legislature when at the time they themselves were each guaranteed a monopoly in their respective marketplace, enforced by government edict. Their original reasoning? It would be too expensive to build a network and not have a guaranteed customer base to repay the debt!

If John Valentine truly wants to help UTOPIA, he should sponsor a bill to remove the shackles the legislature put on UTOPIA in the first place and let it truly compete as a retail equal in the marketplace, not as a chained and hobbled wholesale provider.

I, for one, am waiting for the day when I can get real high-speed services in a competitive marketplace, not the pitiful offerings of the incumbent service providers.

• Gary D. Brown is a resident of Orem.  Gary Brown Daily Herald newspaper

Orem residents turn in final names for referendum. Genelle Pugmire. Daily Herald

On Thursday county officials, who had been counting as signature packets came in, validated the final names and delivered petition packets back to the city.

  OREM -- Orem residents have spoken, with more than 5,400 of them signing a petition to force a property tax referendum to be on the ballot in November 2013. The referendum will be on the ballot if organizers get 3,129 valid signatures.

The Utah County Elections Office has gone through the signatures to make sure at least 3,129 are registered voters and Orem residents. On Thursday county officials, who had been counting as signature packets came in, validated the final names and delivered petition packets back to the city. City recorder Donna Weaver, who will announce the official count, is out of the office until Monday.

If the referendum is on the ballot, Orem will have to freeze the proposed 25 percent property tax increase for two budget cycles. That will necessitate digging deeper into already slim city coffers to find $3.3 million to cover a $2.8 million obligation on Orem's part of UTOPIA's bond payment and other needs in the city. They also will have to make more cuts in 2013.

Since late spring residents have been sounding their concerns about two issues: mismanagement of city funds and the financial burden of UTOPIA, an interlocal agreement that provides Orem and partner cities with a fiber-optic network. Residents have been vocal in their dislike of UTOPIA and the tax increase. They started collecting signatures shortly after the city council approved the tax increase in August.

Although the question will not go to a vote until next year, state law requires that any tax increase subject to a referendum is frozen until after the referendum.

While the referendum will provide a symbolic vote on UTOPIA, according to a press release issued by the advocacy group Standing for Orem, it will "demand the city council take responsibility for this financial disaster."

More that 147 residents carried petitions door to door.

"People poured out their hearts and put their names on a list to help," Cathy Young said. "The city still isn't listening to us."

City officials say it's not that easy. The city has been dipping into reserve funds through the lean years and no longer has that option. To balance the budget without a tax increase, services will have to be cut.

"We have a level of service that's made it one of the best places in the country to live," assistant city manager Jamie Davidson said. "It's the best because of the services and the committed employees and innovative public officials. I'm concerned we won't be able to look like this in the future."

They are looking at places to cut but won't take action until after the signature count is official.

"Going forward with a plan would be premature before we know that outcome has been reached," Davidson said.

While residents and city administration appear to be at loggerheads with each other, neither side wants services to be cut or jobs to be lost. The departments more likely to take a hit are those like the library, parks and recreation and snow removal.

A flier sent out by those opposing the referendum listed possible effects of no tax increase: 10 percent of the city's employees could lose their jobs; fire education and prevention programs for elementary schools could be eliminated; Summerfest, the city's annual event, could be eliminated; library hours could be cut and programs eliminated; senior center programs could be significantly reduced; and a number of other city-sponsored programs could be reduced or eliminated.

Standing for Orem representatives isn't convinced that jobs and services need to be slashed. Their suggestions include:

• Cutting the mall subsidy of $975,000;

• Reducing convention travel and city food purchases by $200,000;

• Delaying purchase of half of the new computer equipment, saving $200,000;

• Cutting organization dues and CEDO, approximately $315,000;

• Requiring employees who make more than $75,000 to pay $250 a month for insurance for a savings of $800,000, or $350 per month for a savings of $1 million.

More than that, they hope the city will work with them instead of shutting them out of the process.

"Instead of fighting this, embrace it," resident Dave Young said. "The city keeps working at dividing citizens from police and fire. We don't want this. It's the last thing we want. The issue is this: the citizens what to be heard."

Dorothy Burr said in taking the petitions around she has seen residents become engaged in the community. "I feel like it's unified the city. But is also seems like the city employees are up in arms."

For Davidson and department heads, the frustration comes from the fact they have been operating on slim budgets for several years already and have not be able to take care of things that need to be taken care of.

"At the end of the day we still have the responsibility to take care of the public," Davidson said. "When someone calls 911 we still have the responsibility to respond."

Burr said the city is using scare tactics.

"We feel it irresponsible for the city to threaten the jobs of our police and fire departments as safety is one of the main responsibilities of the City of Orem to its citizens. These efforts to scare the public and discourage citizens from participating in how they will be governed is beneath the values of a representative government. Instead of threatening our safety they should consider making responsible budget-balancing reductions and policy changes first."  Daily Herald

Property tax hike in Orem sparks action, discord. Leslie Nelson has volunteers working to convince those who have signed the petitions to have their signatures removed..

OREM — Leslie Nelson said a $4 a month tax hike is not too much to pay to keep Orem the pleasurable town she's called home for 32 years.

City resident Wayne Burr said a recession is no time to impose a 25 percent hike on residents, particularly when one of the purposes is to pay down the debt on UTOPIA —  the oft-criticized fiber optic infrastructure network that the city is a part of.

Burr wants the tax repealed. Nelson wants the city to maintain services. And Orem city officials say misinformation about the impact of the tax and Burr's plan to repeal it is at the root of conflict.

"The thing that bothers me here is the negative feeling that is here in the city of Orem," Nelson said. "I have never seen this level of incivility in our city — ever."

At issue is an increase in property taxes — the first hike since 1978. Last month, the Orem City Council voted 6-1 to increase Orem's portion of overall property taxes 25 percent. Initially, a 50 percent hike was proposed.

The 25 percent increase startled some residents. But Jamie Davidson, Orem's assistant city manager, said the portion the city receives from each homeowner's property tax bill is 18.5 percent of the total bill, and the hike will be 25 percent of that portion. That means the tax will add about $30 a year to an average property tax bill.

"Many citizens, when they heard that property taxes were increasing 50 percent, they took their total overall tax bill and in their head added 50 percent to that," Davidson

For a home in Orem, valued at $181,000, the 25 percent increase would total approximately an additional $45 a year, Davidson said.

The city's reason for the increase is a budget shortfall of $3.3 million, the result of decreased sales tax revenue and increased expenses. A 50 percent increase would have covered that entirely, Davidson said. The 25 percent increase will generate $1.7 million. The city will adjust its budget to make up the difference, according to Davidson.

Part of that will be used to pay the city's debt obligation stemming from Orem's decision to take part in the fiber optic infrastructure network UTOPIA. The project was to be funded by user fees, but the number of users has not met expectations.

"First and foremost, the city is going to meet its obligations to its creditors," Davidson said. "Then, with the remaining funds, it is going to fund municipal operations and we anticipate municipal operations could be impacted by the fact that we may not have these additional tax monies to service and meet our operational costs."

Davidson said operational funds include items such as roads and snow removal as well as public safety, including police and fire service, and operations of the library and building services.

"Anything that we fund from general fund money could be impacted by this decision and the outcome of this referendum," he said.

Burr is pushing a referendum on the tax hike because he said the hike should be put to a vote of Orem residents. He started a petition seeking a vote and agrees it's a "hot button issue" in the city. He needs 3,129 signatures from registered voters to get the vote and Burr said he was close.

"When there's a lot of citizens hurting, it's a very poor time to raise taxes," Burr said. "That's what a lot of people we're meeting are saying. ... They don't want their taxes raised."

But Nelson said he believes the referendum petition is the result of an inaccurate view of the tax hike and what's at stake for Orem if the tax is repealed.

"Two budget years (will be) hobbled without knowing what the tax increase is," Nelson said. "This is Utah and we're good at stretching a dollar, but we're really, really stretching it."

While Burr has actively been enlisting petitioners and gathering signatures, Nelson has spearheaded efforts to find and assist Orem residents interested in getting their names removed from the referendum petition.

Burr became involved because he was concerned that the tax increase is partially the result of Orem's UTOPIA obligation. He thinks the city should find other ways to fund the project.

"It's not the proper role of the government to take taxpayers' money and put it on private enterprise types of things," Burr said. "(With UTOPIA), people are either paying taxes on something they personally can't get into their homes and ... when they do (get the service), a lot of them find it isn't exactly what people have meant it to be."

Nelson said the city has to pay for UTOPIA with or without the tax increase. Her concern is maintaining services for what she considers is a small increase.

"Why would we want to destroy something when what we're talking about is $4 per month?" she asked. "This is why I got involved. ... I don't like misinformation and destruction for no reason. City parks, public service ... I don't see why we're (jeopardizing) that."

Hans Andersen was the lone Orem council member to vote against the tax hike. He said he disagreed with the way the budget was handled.

"The main thing that I was trying to raise was the right of the taxpayers to vote on the tax increase," he said. "My concern was that the public, (which) is going to pay the bill, was not going to be involved in the decision."

Burr said the deadline for the petition is Friday,  but he wants to have the signatures turned in Thursday. Meantime, Nelson has volunteers working to convince those who have signed the petitions to have their signatures removed.

If the referendum fails, the tax hike will go into effect Jan. 1. If it succeeds, the increase will be frozen until a special election is held in June or in November next year.  Emiley Morgan. Deseret News.

E-mail: emorgan@desnews.com

Utah Democrats take redistricting records fight to court. Party files lawsuit saying Republican-controlled Legislature is wrongly trying to keep secrets. Dan Harrie. The Salt Lake Tribune.

 Utah Democrats have filed a lawsuit against the Legislature seeking the release of boxes of records related to last year’s redistricting and to have the party’s $5,000 in records fees returned, arguing the Republican-dominated body wrongly denied its claim that the documents are primarily in the pubic interest and should be disclosed.

“This is the end game of Republicans stalling and trying to cover things up,” Utah Democratic Chairman Jim Dabakis said Wednesday. “We hoped the Republicans would stop the foolishness and open their records and open their caucuses, but they won’t without a court order, so here we are. It’s a shame.”

Senate President Michael Waddoups said the lawsuit — filed Tuesday in 3rd District Court — is more about the upcoming election than it is any legitimate probe of whether partisanship steered redistricting.

“There’s nothing sinister going on here,” said Waddoups, R-Taylorsville. “This is a political season, they’re just trying to get some publicity for their party, which is struggling… They just want to make a campaign issue out of it is all this is.”

Democrats initially filed an open-records request last October seeking all email and paper correspondence between legislators, the Republican Party and other organizations or individuals regarding the once-a-decade process of redrawing Utah’s congressional and legislative district boundaries. About a month later they were told that the extensive research and collection of records would cost an estimated $5,000.

The minority party sought a fee waiver, saying the records were “primarily in the public interest,” but that was denied and they paid the $5,000.

Last May, party officials went to pick up the records and were given 5,000 pages and informed that another 11,000 pages were available upon payment of an additional $9,250. Democrats appealed and, in August, top legislative leaders denied the request to waive fees. The Republican Party offered to pay the balance, but Democrats said no one should have to pay for these public documents.

Dabakis said he doesn’t know if there is anything incriminating or embarrassing in the as-yet-undisclosed records but says an important principle is at stake.

“We don’t want to be in court, but the Democratic Party has an obligation to the people of the state of Utah to stop all this secrecy and keeping all these facts away from the public,” he said. “One thing we know for sure is they’re smug and they’re arrogant …[and] it’s just wrong.”

Waddoups said the Democrats have only themselves to blame because they were “sloppy” and “clumsy” in making such a sweeping records request.

“There was $15,000 of labor that went into this [gathering of records],” said Waddoups. “Now they want the taxpayers to bail them out.”

The Senate president said defending against the lawsuit “should be a slam dunk unless there is a judge in the court who just wants to accommodate the Democrat’s ploy for publicity.”

The case has been assigned to 3rd District Judge L.A. Dever, who was appointed to the bench in 1995 by then-Gov. Mike Leavitt.  Dan Harrie. Salt Lake Tribune.

UTOPIA’s future Capitol should not tie cities’ hands. Salt Lake Tribune. Editorial.

UTOPIA’s future

Capitol should not tie cities’ hands

Published: September 24, 2012 01:01AM
Updated: September 24, 2012 01:01AM

Utah legislators are right to be alarmed by the latest audit of UTOPIA, the troubled high-speed broadband network that is slowly bleeding its 11 Utah cities to pay its debts. Some suggested that the cities should sell this bad investment rather than let it continue to dig a deeper financial hole.

The lawmakers may be right, but this is an issue for the cities to decide. The Legislature should not impose new laws that would limit the cities’ ability to maneuver in their attempts to deal with their own mess.

Sen. John Valentine, R-Orem, is working on legislation that would prevent county or city governments from borrowing to pay for more than 90 days of UTOPIA’s operating expenses or to cover interest payments on its debts. Sen. Valentine is right to be concerned, but this is a decision that should be driven by the market. If, for example, the cities were to come up with a liquidation plan that required them to keep the network on life support for more than 90 days while they close a deal with a buyer or buyers, they should have that flexibility.

That said, it’s hard to see light at the end of UTOPIA’s fiber-optic tunnel. Since 2002, the network has failed to turn an operating profit. It’s never come close. The system lost $18.8 million in 2011, and has a negative net worth of $120 million. Meanwhile, the member cities are on the hook to pay $500 million worth of debt for the next three decades.

The biggest question about UTOPIA is whether its business model can ever turn a profit. The Legislative Auditor General suggests that providing broadband infrastructure at wholesale to independent content providers may never work. But the audit stops short of drawing a final conclusion, suggesting, rather, that the question may be answered in places like Centerville, where the agency is making a new push to market itself. If that fails, liquidation may be the only option.

The cities don’t want to preside over a fire sale because they know they would be left with big debts to pay and little to show for it. So they keep nursing the network along, hoping that the demand for high-speed broadband service will catch fire, especially with high-tech businesses that may need the capacity.

That sounds more like wishful thinking than a business plan.

Meanwhile, some legislators are talking up a working group to bring new eyes to the project and help UTOPIA find its way.

We don’t hold out much hope, but it’s better than Capitol Hill mandating a solution.

Salt Lake Tribune Opinion

Lawmakers: Is it time to let UTOPIA die? Politics •Vince Horiuchi The Salt Lake Tribune In light of critical audit, Revenue, Taxation committee questions debt-ridden network’s future.

Executives of the UTOPIA fiber-optic network were met with blistering criticism by Utah lawmakers Wednesday, some wondering if the high-speed broadband network ought to just cut its losses and pull the plug.

Members of the Revenue and Taxation Interim Committee were presented with the results of a scathing legislative audit into UTOPIA’s operations and finances that asserted the broadband company is failing because of poor management and wasteful spending.

After the presentation, Rep. Jim Nielsen, R-Bountiful, said he didn’t think the audit’s criticisms went far enough.

“It feels like the direness of the situation is very much understated,” he said. “I would have hoped for a more bold recommendation that says, ‘We should shut it down. We should find a way to get out of this.’ ”

The Utah Telecommunication Open Infrastructure Agency is a consortium of 11 Utah cities from Brigham City to Payson that has fallen into debt building a high-speed fiber-optic network.

The cities have pledged about $500 million over 32 years to back the bonds that UTOPIA sold to finance network development, but the network has been plagued with continuing losses and over-optimistic projections. It has yet to earn a profit.

Lawmakers acknowledge there is not much they can do directly about UTOPIA’s financial issues because they involve the cities.

But to prevent a future drain on taxpayers, Sen. John Valentine, R-Orem, said he is working on legislation that would prevent county or city governments from borrowing money to pay for more than 90 days of operating expenses or to cover the interest payments on UTOPIA’s debts, something the network has asked its member cities to do to provide financing.

In an op-ed written by Valentine Sunday for newspapers in Ogden and Provo, and posted this week on the state Senate blog, he accused UTOPIA executives of not being truthful with taxpayers about how much UTOPIA is really costing the cities.

“It’s clear that the longer they operate, the deeper they dig the financial hole. Taxpayers should not have to backstop this financial failure any further . . . nor should they stomach UTOPIA’s lack of transparency,” wrote Valentine, who was at Wednesday’s committee meeting.

UTOPIA officials argue that the network should be viewed as a public utility, such as that for electricity and water, that will be necessary for the cities as technology requires faster Internet connections.

Executives also believe UTOPIA can help bring new business to those cities, especially high-tech and medical companies that can use the faster bandwidth.

A Legislative Auditor General’s report released the end of July showed that the network has been continually losing money since it began in 2002.

In fiscal 2011, the network lost $18.8 million, and has a negative net worth of more than $120 million, which means that if all of UTOPIA’s assets were sold it would still owe that amount to its creditors.

The report stated that UTOPIA had been mismanaged, the network’s construction was poorly planned, and that the company formed partnerships with failing providers that ended up costing UTOPIA more money. It also noted that the rate at which the network has been signing up subscribers has been far below its projections.

For their part, the 11 cities continue to make payments on more than $500 million in bonds that were sold to finance the development of the network.

“The city’s have the obligation, and it’s not going away,” audit supervisor James Behunin told lawmakers.

Rep. David G. Butterfield, R-Logan, called the details in the audit “horrendous” and “horrifying” and wonders if a viable option for UTOPIA is to liquidate its assets and get out of the broadband business.

“With this mess and seeing no real change . . . then I think we’re left wondering at what point do these cities come to the state and ask for a bailout?”

Layton City Manager Alex R. Jensen, who serves on UTOPIA’s board of directors, admits “we have made mistakes” but insists the cities are committed to moving forward.

Since 2008, UTOPIA has changed management, dropped the general contractor that was building the network and has developed a five-year plan it says will have UTOPIA breaking even in 2016.

“We have the courage of our convictions,” he said. “We’re hopeful.”

Sen. Curtis Bramble, R-Provo, said one positive that came out of Wednesday’s meeting was the suggestion that lawmakers form a working group with UTOPIA executives, other entrepreneurs and officials to see if there are solutions to UTOPIA’s financial troubles.

“I would want to see that dialogue before we go forward with any possible legislation,” Bramble said. “There are people who can draw on their experience, and they can put their heads together to come up with something that might work.”

vince@sltrib.com

Google+: +Vincent Horiuchi

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© 2012 The Salt Lake Tribune  Vince Horiuchi. Salt Lake Tribune

Utopia In Debt $120-Million, Legislature Getting Involved

(KUTV) Utopia provides high-speed internet to 11 Utah cities, but it is losing taxpayer money and lawmakers would like to reduce those losses.

Utopia has been approved by local government and by local voters, but now the legislature is getting involved.

The 11 Utah cities receiving Utopia’s offer of “speed-of-light” internet, have promised to pay the company’s debts, but legislatures said on Wednesday that the debt is too high and still growing.

Wednesday, lawmakers heard from their auditors who studied Utopia. They say Utopia is in debt $120-million and losing $19-million a year.

Taxpayers are paying $13-million a year and are committed to pay that much until 2040.

Utopia says that things will get better, but they add the company isn’t a business, but a public utility like a park and is not expected to make money, but to give people a subsidized amenity.

Legislators seemed unwilling to accept open-ended taxpayer losses. “They should have a plan or they should be closing down,” John Valentine says.

Valentine might introduce a bill to limit debt and that might force foreclosure.

Others favor an informal change that would limit the losses.

(Copyright 2012 Sinclair Broadcasting Group)  Kutv.com

UTOPIA explains fee hike in Orem. Todd Marriott. Executive Director of UTOPIA.

UTOPIA explains fee hike in Orem

GUEST OPINION

September 08, 2012 12:08 am  •  Todd Marriott

We want to correct some inaccurate reporting in the Herald's Sept. 7 poll article regarding UTOPIA fees.

First, UTOPIA will not be "out of money" at the end of the month. We are funded through bond proceeds and subscriber revenues. Last year's budgeted funds were expected to last through June 30, 2012, but due to prudent management, UTOPIA has operated well past that date using those funds. As part of our standard operating procedure, on an annual basis, our board approves a scheduled drawdown on a pre-approved bond. This allows transparent oversight by the cities that own the network, including Orem.

Second, the article did not correctly identify which customers would be affected by higher fees, nor the benefits they would receive. The increase in service fees affects "legacy" subscribers only; these are subscribers who joined UTOPIA under a different model and were not asked to pay any infrastructure costs to get the fiber optic service to their house. UTOPIA has never increased prices on those customers before, and we held off as long as possible. The majority of legacy customers subscribe to Veracity Networks and XMission and these service providers may opt to pass along some or all of the fee increase to them.

But, at this time, these companies are also significantly increasing speeds for legacy customers, both up and down. For example, these XMission customers will now receive 50 megabits per second down- and up-stream, while Veracity will offer 60 or 100 MBPS up and down, depending on the subscriber's agreement! By contrast, Comcast offers 20 MBPS downstream/4 MBPS upstream for more than $60 a month. The value for money spent on these speeds provided by ISP's using UTOPIA is significant.

Finally, the Herald inaccurately published that UTOPIA's speeds will slow as more people use the network. While this happens with Comcast's and CenturyLink's networks, it does not occur with UTOPIA because each customer has their own piece of fiber connected directly to the home and does not share bandwidth with their neighbors.

• Todd Marriott is Executive Director of UTOPIA.  Todd Marriott. UTOPIA Executive Director. Guest Opinion. Herald Extra.com

UTOPIA: Why didn’t they tell us? Guest Opinion by Senator Valentine

UTOPIA: Why didn’t they tell us?

GUEST OPINION

September 16, 2012 12:26 am  •  Sen. John L. Valentine

Imagine it's June of 2012, and you are the management of UTOPIA, Utah's largest municipal telecom venture. You're reviewing the final draft of an as yet unpublished but scathing report by the Legislative Auditor General. Your second-largest member city -- Orem -- is proposing to raise property taxes by 50 percnet (later reduced to 25 percent), and they are explicitly blaming your organization.

You are failing to meet your internal goal of 450 new subscribers each month. In fact, you're not even getting halfway to that goal. (You are actually getting only 190 subscribers per month with an aggressive marketing effort.) Your operating expenses continue to exceed your operating revenues. You can't pay your interest expenses without borrowing more money. You are effectively paying your mortgage with a credit card.

Lastly, you have less than six months of operating capital left.

What would you do?

Because it's now September 2012, we don't have to imagine what UTOPIA's management did, and didn't do. We know ... They didn't notify their member cities of the impending cash crunch ... They didn't notify the Legislative Auditor General of the impending cash crunch ... They did not tell the taxpayers of the need to borrow more money just to operate.

Instead, they hired Wilkinson Ferrari, a PR firm, to help them through the audit's PR debacle. And then they waited until Tuesday, Aug. 28, to tell Orem City that UTOPIA would be out of operating capital by September 30. UTOPIA consciously decided to wait until two weeks after the Truth in Taxation hearing where hundreds of Orem residents filled city hall to protest Orem's UTOPIA property tax hike before announcing that they'll need to pony up more money, increase their debt and do it immediately!

The city council agendas of Layton, Payson, Lindon, West Valley City and Midvale (all UTOPIA cities) did not include a UTOPIA presentation in August. My guess is that city council members in the other cities didn't know about UTOPIA's impending cash crunch either.

UTOPIA's solution? They want their member cities to authorize ten million dollars in additional debt without even adopting a written public plan to get them out of this mess. UTOPIA is soon to be out of money; it does not earn enough to pay its day-to-day operating costs even if someone else (the taxpayers) pays off all of the debt! UTOPIA's long-term solution for its member cities? Borrow more money for operating costs because "we can build out of our debt."

It's possible that UTOPIA's management didn't deliberately wait. Under that scenario, UTOPIA's management suddenly discovered after the public hearings that their operating cash is all but gone. They tell us that we should be glad that the money did not run out in June. As bad as it looks for them to have waited, assuming that they waited is much better than assuming that they just didn't know.

In either case, it's clear that the longer they operate, the deeper they dig the financial hole. Taxpayers should not have to backstop this financial failure any further ... nor should they stomach UTOPIA's lack of transparency. Come on, at least tell us in a timely manner what is going on. If you are not even going to tell your member cities, then the time has come for the city councils of the UTOPIA cities to reject UTOPIA's latest bailout scheme. Please ask your city officials to not authorize an additional $10 million in debt just to dig a deeper grave for UTOPIA.

• John Valentine represents Orem, Lindon, Pleasant Grove, American Fork and Cedar Hills in the Utah Senate. He is chairman of the legislature's Business and Labor Committee.  Senator John Valentine. Guest Opinion. Heraldextra.com

Are A-frames and even dancing people waving pizza signs or tax preparation notices Ugly?

Orem city's beautification commission and members of the city council at Tuesday's council meeting discussed the beautification aspects of state street in Orem.  Members of the beautification commission voiced their concerns that current proposals interfere with their beautification goals and blocks some of their projects.i n Orem and whether the numerous banners by Orem businesses detract from the beauty of Orem.

Herald Extra.com