Wednesday, December 25, 2013

"UTOPIA has been quite clearly identified, currently, as a sub-scale network, with not enough addresses to be self-supporting," .Standard Examiner


UTOPIA inks agreement with Australian company
SALT LAKE CITY -- UTOPIA's secret announcement with some 60 mayors and city council members sworn to silence for two months is a fresh $300 million investor from down under.
The Australia-based Macquarie Capital Group specializes in managing public-private partnerships, according to its vita. It boasts $359 million under management in 28 countries.
The plan is for the Macquarie-organized company, or reorganized UTOPIA, to finish building the UTOPIA dream begun in the late 1990s and pay off the 25-year bonds so many of the member cities are paying out of taxes instead of subscriber fees. Brigham City currently pays $430,000 a year for its UTOPIA bonds, and Layton, $2 million.
For their $300 million Macquarie gets a slice of the subscriber fees to recoup their investment over a 30-year period.
UTOPIA officials had hoped to show Macquarie's UTOPIA project manager Nick Hann around the state to media outlets and some of the fiber-optic company's 11 member cities all day Thursday. But those plans were blown up by the Thursday morning snowstorm that closed the Salt Lake City Airport. Hann, from Macquarie's Vancouver office, didn't get off a plane in Salt Lake until 2:30 p.m., after diverting to Grand Junction, Colo.
The "build-out" UTOPIA is hoping for with Macquarie after more than a decade of disappointment is to reach its projected 153,000 connections, said Wayne Pyle, West Valley City manager and UTOPIA board chairman.
Currently, he said, the figure is 20,000 connections, or subscribers -- homes and businesses paying for UTOPIA's high-speed internet access.
Pyle was among the group escorting Hann to stops Thursday in Salt Lake, Davis and Utah counties. The visit of Hann apparently ends the authority of approximately 60 non-disclosure agreements UTOPIA had most of the 11 member cities sign the last two months to keep quiet until a formal agreement was penned with Macquarie.
"Not that it isn't important, but this is not a particularly large investment for Macquarie," Hann said in a telephone interview from the Salt Lake airport.
"UTOPIA has been quite clearly identified, currently, as a sub-scale network, with not enough addresses to be self-supporting," he said. "What Macquarie hopes to do is bring the capital to build out and deliver core public infrastructure services.
"We take the risk for building the project on time and on budget, and the risk to keep it going ... in this case for 30 years."
The member cities of UTOPIA have no liability for repaying the $300 million, he said. But Hann said he couldn't promise there would never be charges made to the cities.
He also said $300 million is not a cap, that whatever money is needed would be utilized.
"The $300 million figure is a back-of-the-envelope estimate," Hann said. "There are no constraints in bringing whatever capital is needed."
Macquarie works as a "concessionaire," officials explained, forming, financing and managing the company that will finish laying UTOPIA's fiber-optic cable.
Pyle said the build-out is not expected to begin in the spring, actual start-up unclear until certain feasibility studies finish.
Contact reporter Tim Gurrister at 801-625-4238, tgurrister@standard.net. Follow him on Twitter at @tgurrister

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