Utopia moves ahead on FTTH bailout plan, but the monthly tax bill could go higher

by Steve Blum • , , , ,

A flat monthly fee of $18 to $20 – or, now, perhaps more – to rescue the failing Utopia municipal fiber to the home system in Utah got mixed reviews from the city councils involved, but even so the project’s board of directors voted today to move ahead with negotiating a bailout plan put forward by Australia’s Macquarie Capital Group.

The system encompasses 11 cities in the Salt Lake area (but not Provo, where Google rescued an independent muni FTTH system or Salt Lake City itself). It has struggled financially just to stay in operation and has not been to fulfill an early promise of a 100% buildout.

Last Friday was the deadline for the 11 cities to vote on accepting Macquarie’s plan to impose a monthly fee on residents – whether or not they get service – to get the system onto a firm financial footing (h/t to the Eldo Telecom blog for the heads up). In the end, six city councils voted to move on to the second stage of negotiations, the other five opted out. The proposal was vigorously opposed by a taxpayer group, apparently funded – at least in part – by CenturyLink.

The $18 to $20 fee was based on an assumption that most or all of the 11 cities would sign up for the deal. With almost half saying no and the ones saying yes needing the most build out work, it’s not clear if the monthly tab will go up. It seems likely that it will, but Macquarie has 3 months to figure it out.

By comparison, property owners in Provo got a bargain. They’re forking out about $5 a month each to pay off the bonds used to build the system, while Google takes ownership and operating responsibility.