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Utah's Utopia Tries To Stay Afloat
Decides to focus on small businesses

Just a few years ago, Utah was on the cutting edge of community-driven fiber networks, laying claim to two of the nation's largest municipal fiber builds. But last May, one of those networks (iProvo) was sold to Broadweave for $40 million. The other, Utopia, has so-far underperformed, with fewer subscribers than expected despite carriers offering 50Mbps fiber (a 100GB cap) for $39.95. Ed Gubbins of Telephony Online says Utopia is taking one last shot at the wholesale muni-model with a new business model, new management, and a greater focus on business lines.

quote:
Key to Utopia’s new focus is a move to redirect network deployment toward businesses rather than residential customers. Though the project was initially conceived as a way to bring universal broadband to underserved residents, critics say that model isn’t lucrative enough. And so in recent months, Utopia began connecting its fiber to underserved office parks in Utah County, the area just south of Salt Lake County that includes Provo and houses more than 10,000 businesses.
The shift mirrors similar moves by ISPs like Speakeasy, who found themselves focusing on small business customers (see our interview on this with their CEO) instead of residential users to stay alive. In Utopia's case, they weren't helped by Qwest, who sued to prevent the project from using utility poles -- delaying Utopia by eighteen months before they even had a chance to compete.

Back to Broadweave and iProvo, the Salt Lake City Tribune states that there were multiple parties interested in acquiring the iProvo network, including ISPs MStar and XMission, as well as Dynamic City, the firm that runs Utopia. However, there seems to be some debate over how transparent the city of Provo was about selling the network, with some locals claiming that MStar was double crossed by Broadweave during their efforts to acquire the network.

Most recommended from 43 comments



RadioDoc

join:2000-05-11
La Grange, IL

2 recommendations

RadioDoc

A race you don't want to win

The residential broadband market is a race to the bottom. Despite the advertised bitrate puffery the real driving force is price. Unless you can subsidize your losses in competitive markets like the cable companies do, or subsidize your residential customers with your business customers like the phone companies do, you end up losing money. Put another way, 'we lose money on every sale but make it up with volume".

The only way a stand-alone can survive is to position itself as a quality, business-oriented service. Residential-only broadband is a dead-end.
dynodb
Premium Member
join:2004-04-21
Minneapolis, MN

2 recommendations

dynodb

Premium Member

And another one down...

And another one down, another one bites the dust...

How many more munis have to fail (usually with the taxpayer left holding the bill) before it's recognized that it's a bad idea? Why would anyone expect government to be the paragons of efficiency delivering broadband that they fail to in nearly every other endeavor?

Seems to me it would be cheaper and a lot quicker to provide incentives of some sort such as tax breaks to locally serving providers (be they ILEC, CLEC or local ISP) to expand or improve deployment.

And yet the next time a municipality proposes a pie in the sky fiber muni project with some fly by night outfit that's doomed to go overbudget and way past deadline before eventually failing, 90% of the BBR crowd will think it a great idea.