Monday, April 21, 2008

Muni fiber growth pains: Utah's UTOPIA, iProvo reconnoiter

Here's a comprehensive account by the Provo, Utah Daily Herald of the challenges that can arise in public-private fiber optic projects designed to bring state of the art telecommunications services to residents and businesses.

Both the Utah Telecommunication Open Infrastructure Agency (UTOPIA), a fiber venture begun in 2003 underwritten by 18 Utah municipalities and iProvo, Provo's muni fiber project, are experiencing cash flow problems due to take rates falling short of projections and a low cost federal loan coming in later and with far less money than requested. The finances of both projects are under review as are a number of options to improve the numbers.

The lessons that can be drawn here for such ventures are 1) Making sure there is a committed base of business and institutional subscribers who are hungry for "big pipe" data-intensive services and making connections affordable for small businesses and 2) Getting good estimates of projected demand in residential areas to help prioritize build out to those where demand is highest.

"The initial model was build it and they will come," Paul Recanzone, UTOPIA's project manager, told the newspaper. "The new model is to let the market tell you where the demand is before building out."

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