In August, we reported on the results of a report on UTOPIA by the Office of the State Auditor General of Utah. As you will recall, the results were less than favorable and presented more fodder for those opposed to municipal telecommunications infrastructure investment.

The same old arguments often rest on the financial investment in municipal networks - they are considered failures if they don't break even or make money. Pete Ashdown, founder of ISP XMission in Utah, addressed those arguments in the Salt Lake Tribune:

UTOPIA provides broadband service in 11 Utah cities. Today, communication infrastructure is no less critical than transportation, sanitation and clean water. Government is not a business, but the infrastructure it provides contributes to a robust business environment.

Consider how private businesses rely on government funded infrastructure. Why don’t entrepreneurs clamor to build the next generation of roads? Why don’t airline companies get off the public dole and build their own facilities? Why are sewer facilities so rarely handled by anyone else but the state?

Does effective infrastructure cost? Considerably. Does it make a profit? No.

For decades now, public service entities have contended with the argument that if they are "run it like a business" they will be more efficient, productive and even profitable. While lessons from the private sector may contribute to increased efficiency at times, government is NOT a business. Applying business tenets should be done sparingly and not in the case of critical infrastructure like electricity, roads, and yes, access to the Internet.

Gary D. Brown, who lives in Orem, shared a guest opinion through the Daily Herald and drew a similar parallel between UTOPIA's status and the business world:

When UTOPIA was first proposed, I was all for getting a fiber optic connection to every home and business in the at-that-time 17 cities. In my opinion, the original business model was sound; install fiber to each home/business and offer data,...

We brought you news of Leverett, Massachusetts and their decision this spring to pursue a municipal fiber optic network. In April, voters approved a measure to develop the initiative, and this past weekend took the last step toward building the network. The town of 1,851, voted to raise their taxes to pay for a fiber-to-the-home network. The result was a resounding 462 for and 90 against.

The GazetteNET.com covered the story:

"We're expecting everyone in Leverett to have access to this network by 2014," said Peter d'Errico, a member of the town's Select Board and a leading supporter of the municipal fiber-optic system."

"This was clearly a mandate to proceed," said d'Errico. "There was vigorous discussion at every stage of the process and it's a sign that community is ready to take charge of its own services."

The Proposition 2 1/2 debt exclusion override ended in an 83.5% vote to support the project. The result satisfies the 2/3 majority requirement for a planned tax increase, as required by state law.

A little more than 39% of the town's eligible voters cast ballots. According to the assistant town clerk, D'Ann Kelty who monitors voter activity, the turn out was large for a single issue election.

The funding strategy is a 20-year bond measure and is expected to increase property taxes by 6%. Supporters note that a 6% hike in property taxes is less than what households will save in telephone and internet bills. They will be paying less for something far better than they now receive. According to residents, telephone service has been spotty for years, due to old copper wires that have not been replaced by providers. In a recent GazetteNET article before the vote:

"Beginning in 2009 or so, high speed providers decided that they weren't going to upgrade their landline cables in rural areas," said Richard Nathhorst, a member of the Broadband Committee and one of the drafters of the proposal. Though the state issued a court order last year to Verizon Telecommunications, the owner of the current lines, to improve service to rural areas, dissatisfaction remained high in...

Recently, we let you know about the situation in Siloam Springs, Arkansas, population 15,039. The town is now investigating the possibility of building their own fiber network. They have had several community meetings and a "vote of the people" is set for May 22, 2012.

Pamela Hill is investigating the twists and turrns in a series of articles about the vote. In one of her articles, Hill looked into another Arkansas community, Paragould, home of the annual "Loose Caboose" Festival.  This community, located in the northeast corner of the state, has successfully operated their own cable network since 1991. Unlike Siloam Springs, the people of Paragould weren't focused first on generating new revenue for the local government, they just wanted to be able to watch tv for a reasonable price.

Back in 1986, Cablevision was the only provider in Paragould. Hill spoke with Rhonda Davis, CFO of Paragould Light, Water & Cable:

"The public wasn’t happy with Cablevision’s service or rates,” Davis said. “We took it to a public vote and did it.”

Prior to Paragould's decision to build their own network, the City had a nonexclusive franchise agreement with Cablevision. The town was dissatisfied by the service they received and, in 1986, Paragould voters approved an ordinance authorizing the Paragould Light and Water to construct and operate a municipal cable system. Three years later, there was a referendum that authorized the city to issue a little over $3 million in municipal bonds to finance the system.

That same month, Cablevision filed suit alleging antitrust violations, breach of contract, and infringement of first and fourteenth amendment rights. The district court dismissed the antitrust and constitutional claims and Cablevision appealed unsuccessfully. The case attracted attention from lawyers and business scholars across the country.

By 1998, the City had purchased Cablevision's remaining service and began offering Internet service. The City has continually upgraded their investment, which now consists of fiber lines that run to nodes throughout the city. Coaxial cable delivers signal and data...

Leverett, Massachusetts, is one step closer to a community owned FTTH network. The town of 2,000 will have weekly public information meetings until the Annual Town Meeting scheduled for April 28, 2012. If the required $3.6 million funding is approved at the meeting, the city will issue a Request For Proposals to build the network.

The 1 gig network is slated to be an aerial build, except where existing utilities are underground, in which instances, fiber cable will also be placed underground. Leverett plans to use a $40,0000 planning grant, obtained from the Massachusetts Broadband Institute, to hire G4S Technology to design the last mile fiber-optic network to connect to MBI's stimulus-funded middle mile. The middle mile project is scheduled to be completed in June, 2013, and Leverett plans to be ready to connect soon after. The goal is to have every home connected with fiber by 2014.

Whereas most communities explicitly choose not to use tax revenue to pay for a community network, Leverett's present plan is for a slight increase in local taxes to assist in the financing. The town will borrow the amount necessary to build the network and pay it back over 20 years using a combination of tax revenue and revenues from the new broadband service. Peter d'Errico, Chair of the MBI Grant Broadband Committee observes that homeowners' net spending figures will decline once the system is in place. From the article:

A town survey concluded a municipal network could offer better Internet and phone service at far cheaper rates than private providers, he said.

"It will be a little more on their tax bill and a lot less on their Internet bill, so overall they will be pay less," d'Errico said.

According to the Broadband Committee, approximately 37% of households in Leverett use slow, sketchy satellite, 23% use dial-up, 20% are on DSL, 14% use wireless, and 6% of households have no internet access. Some households, although theoretically accessible via satellite, never get a connection because of trees and the picturesque,...