Salt Lake City and other Utah cities are looking to build the largest ultrahigh-speed digital network in the country. Excellent.
- Construction on the project is scheduled to start next spring – if the cities can raise the money to pull it off. The network would be capable of delivering data over the Internet to homes and businesses at speeds 100 times faster than current commercial residential offerings. It would also offer digital television and telephone services through the Internet.
With a $470 million price tag, the project is considered one of the most ambitious efforts in the world to deploy fiber optic cables, which carry data in bursts of light over glass fibers. Though it has not received much attention outside the area, the project has raised questions here about the role of government, particularly from telecommunications companies, which are starting to complain about the prospect of competing against a publicly sponsored digital network.
The cities involved argue that reliable access to high-speed data is so important to their goals of improving education and advancing economic growth that the project should be seen as no more controversial than the traditional public role in building roads, bridges, sewers and schools – as well as electric power systems, which are often municipally owned in the Western United States.
Data infrastructure “is not a nicety,” said Paul T. Morris, executive director for the project, which he has named Utopia, a stylized acronym for the Utah Telecommunication Open Infrastructure Agency. “It’s an essential economic growth issue,” he added. “The best network in the U.S. will be in Utah – not in New York, not in Chicago, not in Los Angeles.”
Its advocates say that Utopia will give participating cities a leg up in attracting sophisticated companies and highly educated, technology-minded individuals. The network is expected to be available to 723,000 residents in 248,000 households and 34,500 businesses. Prices would vary considerably depending on the service, though basic high-speed Internet access is expected to cost about $28 a month.
….”This is a very powerful test case,” said Sharon Gillett, a research associate at M.I.T.’s center for technology, policy and industrial development. “If Utopia succeeds, it will be the first really large-scale deployment of fiber to the home in the United States.”
….Depending on the kind of equipment used, fiber can deliver data at speeds of 100 megabits a second – even as much as 1,000 megabits under some circumstances – enabling the lines to be used simultaneously to send voice, video, Internet and other data traffic.
As of yet, there are few demands for such capabilities. But Mr. Morris, of Utopia, predicted that it would not be long before promising new applications emerged. For instance, televisions need 6 megabits a second to deliver DVD-quality images over the Internet, and 18 megabits to deliver HDTV. He is counting on residents in the Utopia service area to turn soon to video-on-demand, online video games, Internet and telephone service, all of which consume bandwidth.
The applications are not all here today, Mr. Morris said, but when they are, “you get to 95 megabits pretty quickly.” He added: “We built a network that we don’t have to change.”
….An economic study by DynamicCity in Lindon, Utah, predicted that 40 percent of consumers and residents would sign up after two years. The project was likely to generate enough revenue by its seventh year to cover all expenses, the study estimated.
Mr. Morris said Utopia was arranging financing from a New York investment bank. He said that the cities would be asked to guarantee a portion of the loan Utopia acquires from the investment bank, but that the amount was still being negotiated.
Such a guarantee, while not providing a subsidy in the form of tax-exempt financing, substantially increases the creditworthiness of Utopia, dropping the interest rate to the 6 percent range from as high as 12 percent, Mr. Morris said. But it also puts those cities at risk should the project fail to meet expectations.
Mr. Morris said he expected to secure the financial commitment this month, paving the way for construction to begin next spring or summer. [NY Times]
This is indeed “infrastructure” and is exactly the kind of thing public funds should support – build it and the content to utilize the capacity will come.