$25 monthly FTTH tax proposal fades away in Utah

by Steve Blum • , ,

An everyone pays, everyone gets plan to pay for completion of the Utopia fiber to the home network in Utah appears to be dead (h/t to Fred Pilot at the EldoTelecom blog for the pointer). The financing package was proposed by an Australian company, Macquarie Capital, as a way to finish building out the network in participating Utah cities. The deal that was on the table would have every home and business pay a mandatory utility fee of $25 a month – a tax, in other words. In exchange, residents would get what amounted to a lifeline level of service: 5 Mbps symmetrical service with a 20 GB per month cap and an option to pay more to get more.

Only six of the eleven cities that participate in the Utopia project opted to move ahead and negotiate with Macquarie. The talks went on for more than two years and finally ended last month, according to the FreeUtopia blog

For all intents and purposes, it’s most likely not going to happen. There appears to be slow action on a binding public vote and the utility fee was very unpopular (and wasn’t coming down). The board has voted to pay Macquarie what they are due and take [the studies prepared by Macquarie] as valuable information to plan for the future with no further action.

The infrastructure financing model proposed – a public network built with private financing that’s repaid with mandatory monthly fees – is common enough in Europe and Australia, but it hasn’t proved to be popular with U.S. taxpayers so far, at least not for FTTH projects. A similar proposal in Pacific Grove, California by a British company has likewise ground to a halt.