[1st-mile-nm] UTOPIA Article

[Steve Ross]

We've done many favorable stories on UTOPIA, and on the 
separate iProvo system with which UTOPIA shares a headend. 
It is clear that local customers benefit by the actions 
private network operators in the area have had to take to 
compete -- lower prices and better service for all.

But it is also clear that UTOPIA has problems. Its take rate 
is around 16%. It needs somewhat more than that to break 
even -- 20-25%. It had projected more than 40%, which we 
always felt was high for the short term -- the pattern is 
that private incumbents will artificially lower prices and 
improve services to match the public entrant, reducing the 
need for customers to change providers. Nimble network 
operators have been able to get 40% and even 50% or better 
take rate under these circumstances, but it is not a 
slam-dunk. They can't know for sure what the private 
operators will do, but the private operators can come to the 
public operators' open meetings!

Also, under state law, UTOPIA cannot offer retail services 
of its own, so it is somewhat limited to the providers it 
can "rent" bandwidth to.

Finally, satellite video is cheap and easy to implement in 
Utah, reducing the number of potential customers.

For comparative stats, see

http://www.broadbandproperties.com/2007issues/november07/CoverStoryRender.pdf


Steven S. Ross
Editor-in-Chief
Broadband Properties
steve at broadbandproperties.com
www.bbpmag.com
SKYPE: editorsteve
+1 781-284-8810
+1 646-216-8030 fax
+1 201-456-5933 mobile

Richard Lowenberg wrote:
> Utah's 'open service provider' fiber network, UTOPIA, has been the subject
> of numerous (biased vested-interest) position papers and articles of late,
> as it goes through some restructuring and growing pains.   Pro-incumbent
> parties are opposed to UTOPIA.   The following article, though biased in
> favor of UTOPIA, provides a fairly good update on the project.
> rl
> -----
> 
> www.sltrib.com/opinion/ci_7890855#
> 
> UTOPIA detractors don't see the big picture
> 
> By Warren Woodward
> Salt Lake Tribune
> 01/05/2008
> 
> In nearly 15 years of being an Internet service provider in Utah, we at
> XMission have never seen a level of excitement among our subscribers like
> that generated by the UTOPIA fiber-to-the-home project.
>     This is a groundbreaking effort we are tremendously excited to be a
> part of, and we are intensely proud of Utah for growing it right here in
> our own backyard.
> 
>     Early in UTOPIA's existence, it was decided that in order to maximize
> fairness among service providers, advertising should be limited to only
> those specific homes and businesses where UTOPIA was available.
>     The unfortunate side effect of this strategy is that because
> advertising and education was isolated to these spotty areas, wider public
> knowledge of the project suffered. We find that, despite the excitement of
> some subscribers, the vast majority of the Utah public has no idea what
> UTOPIA is and how it can benefit our state.
>     This, sadly, left Utah vulnerable to the hyperbole of the many UTOPIA
> detractors, a trap The Tribune itself has fallen into this week with both
> its news article ("UTOPIA: Could high-speed fiber optic end up
> cyber-paradise lost?" Dec. 30), and an editorial ("Utopian nightmare,"
> Jan. 3).
> 
>     To clear some misunderstandings, UTOPIA is not in direct competition
> with existing telecommunication providers, not any more than the Salt Lake
> International Airport is in competition with Delta or Southwest. It is
> infrastructure only, and any business capable of offering service over
> fiber is encouraged to do so.
>     Second, it is equally vital that people understand what exactly UTOPIA
> provides this community. Detractors who say that "no one needs fiber"
> don't see the big picture. This isn't just an amazing access network for
> today's public, it's a "future-proof" network that will support the
> telecommunication needs of Utah for decades to come, long after the
> existing switched-copper network has crumbled into obsolescence.
>     The only question remaining is: How can we replace our copper with
> fiber? UTOPIA's solution to this is unique and visionary, and, despite
> stumbles, it's working.
> 
>     Some people seem to think that incumbents will eventually build this
> network themselves. By this reasoning, they would believe that GM or Ford
> would eventually have built Interstate 80. Does anyone really believe the
> interstate highway system would have been built by private enterprise with
> a profit margin in mind? It has never turned a penny in profit, but surely
> everyone recognizes its economic necessity. This is the exact same issue.
>     Contrary to claims, there is no existing business plan that will bring
> ubiquitous fiber to this state, and by the time one arrives, the financial
> reality of our population density dictates that Utah will be long behind
> the curve. Instead, UTOPIA puts us on the forefront of the new century of
> communications. Which position is better for Utah?
> 
>     Perhaps UTOPIA's most significant mistake was its failure to
> adequately predict the severity of illegal opposition from incumbents, a
> sad necessity in a corporate age more prone to litigation than service. It
> is very important that the people of Utah understand that the delays in
> UTOPIA have been largely the effect of extensive legal obstructions by
> incumbents.
>     While these maneuvers ultimately failed, they did succeed in causing
> lengthy and costly delays.
> 
>     Make no mistake, where available, UTOPIA is operating as promised. Our
> UTOPIA subscribers are already getting speeds 10 times faster than most
> cable modem users for less money.
>     People who call this superfluous today are ignoring the reality: It
> will be necessary tomorrow, and there is no plan outside of UTOPIA to
> bring it to Utah. Utah needs UTOPIA, and XMission is proud to be part of
> it.
> 
>     ---
>     * WARREN WOODWARD has managed broadband service at XMission for eight
> years, including UTOPIA service operations for the past three.
> 
> 
> ------------------------------------------------
> Richard Lowenberg
> P.O.Box 8001, Santa Fe, NM 87504
> 505-989-9110,  505-603-5200 cell
> 
> 1st-Mile Institute
> New Mexico Broadband Initiative
> www.1st-mile.com
> ------------------------------------------------
> 
> 
> 
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