Utah bill would stop regional fiber networks from expanding
February 6th, 2014
Article was originally published in Ars Technica on February 5, 2014 by Jon Brodkin
Kansas isn’t the only state considering legislation that would limit the growth of government-funded broadband networks that threaten incumbent Internet service providers.
The latest such attempt we’ve learned of is a Utah House bill called the “Interlocal Entity Service Prohibition,” which would prevent a regional fiber consortium from building infrastructure outside the boundaries of its member cities and towns.
While it would affect any such group, the bill seems to be directed at UTOPIA, the Utah Telecommunication Open Infrastructure Agency, a consortium of 16 cities that operates a fiber-to-the-premises broadband network. The bill explicitly targets fiber only, not affecting cable or other types of networks.
Lobbyist for Comcast, Cox, TWC wrote bill to stifle rivals like Google Fiber.
“It actually is aimed specifically at UTOPIA,” the group’s legislative policy director, Gary Crane, told Ars. Crane is also a city attorney for Layton, one of UTOPIA’s member municipalities. “I think there’s probably a lot of fear in those who hold the monopoly currently in our cities that this model may be a good model for other cities to adopt.”
The bill, sponsored by Republican legislator Curt Webb, “prohibits an interlocal entity that provides telecommunication service through a fiber optic network from constructing infrastructure or providing telecommunication service in locations outside the boundaries of its members.”
We’ve tried to reach Webb by e-mail and phone but haven’t heard back yet.
UTOPIA’s network is open access, allowing private Internet service providers to sell broadband over the fiber.
“Providers include Brigham.net, Fibernet, InfoWest, SumoFiber, Veracity, XMission. Because our network is open, the incumbent telecoms are welcome to join our network, but have elected not to,” UTOPIA says.
UTOPIA service is available in 11 of the 16 member cities and towns. Those wouldn’t be affected by the bill, but the legislation would still harm UTOPIA because “we have fiber connections just about everywhere,” Crane said.
Salt Lake City isn’t a member of UTOPIA, yet there are government agencies and businesses in Salt Lake City and beyond getting Internet service from UTOPIA fiber. The Utah Department of Transportation, the Utah Transit Authority, and the Utah Education Network are all using UTOPIA fiber for government facilities, schools, libraries, and more, Crane said.
The bill has a grandfather clause for any “contract to construct infrastructure or provide telecommunication service that was entered into before the effective date of this bill,” and for construction of “infrastructure necessary to connect the network between its members.”
Even current projects could be adversely affected, though, Crane said. UTOPIA has partnered with one business “to create a fiber ring around Salt Lake City, and that partnership provided that others could connect onto that system to defray costs.” Future connections that require a new contract could be barred. Technically, UTOPIA could get around the bill’s restrictions by adding cities and towns to its member base, but convincing municipal governments to join is difficult, he noted.
Crane said UTOPIA is also worried the bill could disrupt negotiations with investment firm Macquarie Capital, which are aimed at finishing construction of the fiber network.
Webb’s bill was introduced on January 17 and discussed yesterday by the House Government Operations Committee. Crane said Webb seemed willing to investigate UTOPIA’s concerns, but the bill could still hit the House floor for a vote. “I don’t know what his intention is in writing the bill in the first place to damage or punish the UTOPIA cities. It really doesn’t accomplish anything,” Crane said.
Webb received a $250 donation from CenturyLink, which could benefit from limitations on UTOPIA. Christopher Mitchell, director of the Telecommunications as Commons Initiative at the Institute for Local Self-Reliance, pointed out that the bill would prevent housing developments from connecting to UTOPIA even if they were just outside one of the member cities.
“If you were building a housing development a few miles away from [the UTOPIA network], would you want fiber or would you want to rely on Comcast and CenturyLink?” Mitchell told Ars. Mitchell wrote about the Utah bill at Muninetworks.org, and there’s another article on the proposal at FreeUTOPIA.org.
Established providers have been forced to lower prices in areas where UTOPIA offers services, and in Provo where Google Fiber is building a network, Crane said.
Crane lives in a part of Layton that isn’t served by UTOPIA yet and pays Comcast $242 a month for an Internet, TV, and phone package with speeds of less than 10Mbps, he said. In Provo, Comcast is reportedly offering a $120 triple-play package with 105Mbps download speeds.
UTOPIA has suffered money problems, but critics of the bill say it would prevent the organization’s members from recouping costs. “It limits UTOPIA from collecting funds from potentially high take-rate areas outside member cities,” says a fact sheet that XMission CEO Pete Ashdown is sending to legislators. Those funds “could otherwise be used for payback of UTOPIA member city debt,” he said.