Sent: Monday, August 07, 2017
From: "Chuck McCown" <ch...@wbmfg.com>
To: af@afmug.com
Subject: Re: [AFMUG] OT Municipally funded ISPs
iProvo sold out (gave the system away) to Google. Still substandard.
-----Original Message-----
From: fiber...@mail.com
Sent: Sunday, August 06, 2017 11:01 PM
To: af@afmug.com
Subject: Re: [AFMUG] OT Municipally funded ISPs
That's interesting. Can you share more details about being a service
provider on the iProvo and AF networks? In what way we're they
substandard?
Jared
> Sent: Monday, August 07, 2017
> From: "Sterling Jacobson" <sterl...@avative.net>
> To: "af@afmug.com" <af@afmug.com>
> Subject: Re: [AFMUG] OT Municipally funded ISPs
>
> I agree with that.
>
> The numbers never added up. iProvo never added up, Utopia never added
> up,
> Amercian Fork system numbers never made any sense.
>
> I was a network provider on iProvo and AF networks for a while and sold
> them off since they were always substandard and profit was driven to
> minimum.
>
>
> -----Original Message-----
> From: Af [mailto:af-boun...@afmug.com] On Behalf Of ch...@wbmfg.com
> Sent: Sunday, August 6, 2017 10:46 AM
> To: af@afmug.com
> Subject: [AFMUG] OT Municipally funded ISPs
>
> Here is an editorial in the Deseret News today. It is just an opinion.
>
> And I know Roger has been a reader of this list (Roger runs UTOPIA).
>
> But I have always been against municipal ISPs on principle. Some things
> the government is good at, some things they are not good at.
>
> Roads and Streets == OK
> Police and Fire == OK
> EMS = OK but there are private providers that are OK too.
> Water and Sewer = OK but there are many private systems Power and Gas =
> Meh - I work in a city that has sold off their power and gas to
> private
> because it was not a revenue center and they had lots of power
> distribution problems.
>
> Telecommunications != OK
>
> They almost always seem to be problematic. And they compete with all of
> you
> (us) folks that can do a better job. (Sorry Roger, but that is my
> opinion).
>
>
> BY BILLY HESTERMAN
>
> FOR THE DESERET NEWS
>
> A longstanding principle of the Utah Taxpayers Association is if a
> service
> can be found in the yellow pages, then government shouldn’t be providing
> it.
> We have seen far too many times where government attempts to compete
> with
> the private sector and ends up wasting taxpayer money. One prime example
> of this is the failed UTOPIA boondoggle that continues to plague the 11
> cities that created the entity.
>
> On Aug. 14, the Utah Infrastructure Agency, which was created in 2011 to
> give UTOPIA more borrowing capacity, will vote on taking out a $13
> million
> bond to further build out the UTOPIA network in hopes of making the
> whole
> effort profitable. The vote will likely pass but the effort to make
> UTOPIA
> and UIA a success for taxpayers will never be realized.
>
> This attempt to continue to send money after a bad idea has to stop.
>
> The private sector is already providing the same service that can be
> obtained through UTOPIA and it is past time that the local governments
> that created this mess find a way out.
>
> Recently, the University of Pennsylvania released a study that examined
> 20
> municipally owned fiber networks from across the nation; UTOPIA was
> included in the study.
>
> The report found that a majority of these networks struggle to recover
> the
> costs that were incurred to build them. It went on to show that of the
> 20
> projects, only nine have had a positive revenue stream but that of those
> nine, five are generating returns so small that it would take more than
> 100 years for the project costs to be recovered. Only two of the 20
> networks are expected to earn enough to cover their project costs during
> the useful life of the networks.
>
> The Penn report went on to state that these government-owned ventures
> struggle to ever make a profit and put taxpayers in danger of seeing
> their
> local government increase debt, lose bond rating status and elected
> officials becoming distracted from other important issues because they
> are
> solely focused on the government’s fiber business. The report found that
> if UTOPIA continues in its current state, that the project will likely
> never turn a profit. It observed in a five-year span from 2010-2014 that
> the network only obtained 11,000 subscribers and that with a low
> subscription take the network was realizing less than $30 in revenue per
> household in the cities that make up UTOPIA. That is well below the $446
> per household benchmark achieved by other projects that the report
> looked
> at.
>
> I am often asked why the Utah Taxpayers Association cares so deeply
> about
> the UTOPIA issue. One statement from the Penn report sums up why we have
> taken the position we have as the report states, “Many cities managing
> these projects have faced defaults, reductions in bond ratings, and
> ongoing liability, not to mention the toll that troubled municipal
> broadband ventures can take on city leaders in terms of personal turmoil
> and distraction from other matters important to citizens. City leaders
> should carefully assess all of these costs and risks before permitting a
> municipal fiber program to go forward.”
>
> The risks and consequences are too much for taxpayers to shoulder.
>
> UTOPIA and UIA officials should vote against the upcoming $13 million
> bond
> and start looking for new directions to take the network that will be
> beneficial for taxpayers instead of continually investing money into a
> sinking ship that will never be sea-worthy.
>
> Billy Hesterman is the vice president of the Utah Taxpayers Association.
>
>
