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Possible UTOPIA partnership only in earliest stages
Dec 19, 2013 | 1825 views | 1 1 comments | 7 7 recommendations | email to a friend | print


Associate Editor

CENTERVILLE – Though UTOPIA officials say that a private Internet company is considering joining forces with the struggling fiber-optic network, the potential partnership is still only in the exploratory stages. 

Elected officials serving on the UTOPIA board were asked to sign non-disclosure agreements before being briefed on the situation, but Centerville City Assistant Manager Blaine Lutz said that the information they received was limited. Lutz, who has represented the city on the board for several years, also emphasized that no decisions have been made. 

“It’s something we’re looking at exploring and seeing if it’s the best route to follow,” said Lutz. “There’s lots of information and discussion that will go into seeing if it’s a good idea from both sides.” 

He felt the elected officials were informed of the potential partnership, mostly so they wouldn’t be caught off guard by questions from the press and other groups. 

“No names were given out,” said Lutz. “But they wanted us to have some idea of what was going on.” 

According to Layton City  Attorney Gary Crane, one of Layton’s representatives on the board, the possibilities aren’t limited to just one company. 

“We have a robust system, and it’s attracted a lot of attention,” he said. “We’ve had a lot of interest from outside companies.” 

As for the non-disclosure agreements that have drawn fire from elected officials in other UTOPIA cities, neither Centerville nor Layton representatives were concerned.

 “It’s very typical of private companies,” Lutz said. “We want to get information to people as soon as we can, but there are certain things we need to do to protect the company.” 

UTOPIA officials have been tight-lipped about the private company considering a partnership, describing it only as a major Internet company. Google and Yahoo are currently the only two “Internet giants” heavily involved in U.S. fiber optic networks, and Google is occupied with work in Provo. However, it’s also possible that a new player looking to get more involved in fiber optics would use UTOPIA as an entry into the field. 

“There’s been a lot of excitement about total connectivity in the U.S,” said Crane. “I think it’s of benefit to the 11 cities (of UTOPIA) that Google has raised that interest.” 

Whoever it is, the partnership would likely be structured similarly to others forged between public and private entities. According to Lutz, the private entity often provides equipment and/or financing, while the private entity normally provides the customer base. 

“We’re actually starting to see more and more of that,” he said. 

Even if the partnership doesn’t go through, Lutz said that UTOPIA is doing better financially than in previous years. Centerville has nearly 1,100 connections, which includes both business and about 25 percent of single-family residences. Between 20-40 new Centerville customers usually sign up each month. 

He added that the network as a whole is doing better than anticipated in the five-year projections the company did a few years ago. 

Crane agreed, adding that part of the reason was a drop in operating expenses.

“That was one of our biggest concerns,” he said. “But the new management has turned things around to the point where we are fast closing in on having our operating expenses covered.” 

UTOPIA Marketing Manager Kimberly McKinley confirmed this, but refused to release the actual numbers for either revenue or operating expenses.

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December 19, 2013
Lutz says Centerville is getting "20-40 new customers" each month. How many subscribers drop each month? That is a number UTOPIA has been unwilling to supply when asked for it in the past. The number of new subscribers per month is only part of the equation.

It's great that the UIA is getting close to covering it's operating expenses, but that's also only part of the story. It's taken us nearly 10 years to get to this point. How many years before UTOPIA can cover it's bond payments in addition to the UIA's operating expenses? I have a feeling we'll be covering their debt service for at least another 10 years if not for the full life of the bonds.

That still ties up some of our City funds that we could otherwise use on other projects (such as roads) for up to 27 more years.
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