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Utopia — and Muni Broadband Nirvana

Utopia is today's poster child for fiber-to-the-home dreamers. It is also a potential nightmare for incumbent broadband operators, who disdain municipal providers — or any kind of competitive overbuilder.

The Utah Telecommunications Open Infrastructure Agency — as Utopia is formally known — consists of 17 franchising authorities along the "Wasatch front," a region south of Salt Lake City with 542,000 residents and 19,400 businesses.

Utopia's mission to "accelerate economic development and quality of life … by deploying a publicly owned advanced telecommunications network over the last mile to all homes and businesses" is what drives private providers nuts.

And Utopia's progress is being watched closely by other municipalities.

AT&T Broadband, the dominant cable operator in the region, acknowledges that it is "curious" about Utopia, but has "a great relationship with franchising authorities" and is not worried about the potential FTTH competition.

"We're about halfway done with [installing] fiber optics," said Barb Shelley, AT&T Broadband's spokeswoman in the area. "We plan to finish our upgrade in two to three years."

AT&T: No thanks

Under Utah law, Utopia's municipal entities cannot sell retail services to residential or business customers. Utopia can only sell its facilities wholesale, so it must lease its capacity to content or service providers.

Not surprisingly, AT&T has politely declined Utopia's offer to become one of its lessees.

The retail restriction "is just fine from our view," said Joel Sybrowsky, executive vice president of DynamicCity MetroNet Advisors, a local consulting firm that is managing the Utopia deployment. He contends that legacy carriers have no incentive to provide broadband, but "cities have a responsibility to provide economic benefits" that such an infrastructure would offer.

So far, Utopia has not disclosed any customers for its wholesale network, which will provide 100 megabits per second to 1000 mbps of edge connectivity through 5.6 terabits per second of distributed core-switch fabric.

Sybrowsky and his colleagues are too polite to acknowledge some critiques that outsiders offer openly: Utopia is designed as an attack on the incumbent cable operator and, to a lesser degree, the legacy phone company. No such intent, said Sybrowsky.

The development of Utopia is also a reminder that the several of the most aggressive community broadband initiatives now come from the edges of the telecommunications world, and not from mainstream cable and telephone providers in urban and suburban areas.

Some private broadband assaults come from real estate developers, especially builders of expensive houses. Toll Brothers Inc., one of America's biggest developers of upscale housing, has set up Advanced Broadband, a subsidiary established to pre-wire broadband into new communities.

Like other builders, it is seeking service-provider partners to operate these systems.

High-priced new communities such as The "LPGA-Community" in Daytona Beach, Fla., and Landsdowne on the Potomac near Leesburg, Va., typify this type of broadband-from-the-start construction.

At the other extreme are municipal owners, such as Utopia and Grant County, Wash., which want to speed up local broadband as a facility to attract or keep business in their neighborhoods, as well as retain residents (especially young adults) who rely on high-speed access.

The roster of local-government run FTTH ventures is laden with "entire municipalities" in outlying jurisdictions ranging from East Ottertail, Minn., to Kutztown, Pa., to Roseville, Calif. (the latter, of course, a neighbor of Sacramento).

Strategy swap

During the separate "Intelligent Cities" and the Fiber-to-the-Home Council conferences this month, representatives from both camps — high-end real estate moguls and hopeful public officials — swapped strategies for bringing broadband infrastructure to their communities — with or without the participation of legacy carriers.

"The biggest problem is how to get private enterprise to work with the public sector, which always figures out a way not to do something," lamented Richard Holtz, president of Infinisys Inc., a Florida electronic infrastructure provider, at the Intelligent Cities symposium.

Others point to the money that has become available for municipal broadband development.

For example, the Farm Security and Rural Investment Act, adopted by Congress a few months ago, opens up more than $100 million per year in low-interest loans for broadband deployment in communities with up to 20,000 residents.

Former National Telecommunications and Information Administration chief Greg Rohde noted that the measure's population ceiling was raised from 10,000 residents — despite protests by incumbent providers, who fear that making the loans available to larger towns could eat into their control of such services.

Rohde is now president of e-Copernicus Inc., a Washington consulting firm that helps organizations get their hands on such funding.

In other words, a farm bill could help municipalities accomplish what the Bells insist they need the Tauzin-Dingell legislation to do: wire rural America.

Keeping it level

As Utopia and many of its municipal broadband cousins take shape, the always-edgy relationships between local regulators and operators may take a different slant.

This is not like the ongoing feud between Jacksonville, Fla., officials and AT&T Broadband over contract terms in a shifting ownership environment. Cable-industry defenders insist they only want to assure that the level playing field is maintained — that municipal ventures don't have any advantage over privately owned systems.

Yet municipal broadband providers — and their allies in the high-end real-estate industry —do represent new and competitive approaches to telecom deployment.

As these technical and marketing competitions take shape, it is clear the utopian visions in Utah, Minnesota and Virginia are laden with anti-idyllic realities. Some of the turmoil was made clear nearly a decade ago in Neal Stephenson's science-fiction novel The Diamond Age, set in the late 21st century.

The media impresario character archly named "Carl Hollywood" explains the "media net" of that future era, which was built to replace the "old phone system and its technological cousin, the cable-TV system" — both of which "crashed and burned decades ago [so] we started virtually from scratch. … As soon at the [new] media grid was up and running ... [old] systems got fubared."

Of course, the novel has the luxury of fiction: It doesn't have to explain who actually pays to build and run the infrastructure. That reality is, of course, far from utopian.

Contributing curmudgeon Gary Arlen opines regularly in Broadband Week.

Contributor Gary Arlen is known for his insights into the convergence of media, telecom, content and technology. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the longtime “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports. He writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs. Gary has taught media-focused courses on the adjunct faculties at George Mason University and American University and has guest-lectured at MIT, Harvard, UCLA, University of Southern California and Northwestern University and at countless media, marketing and technology industry events. As President of Arlen Communications LLC, he has provided analyses about the development of applications and services for entertainment, marketing and e-commerce.