A Performance Audit of the Utah Telecommunication Open ...

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will be funded through UIA financing. Both UTOPIA and UIA areoverseen by separate boards of directors comprised of administratorsor elected officials from their member cities. Figure 1.1 lists theUTOPIA member cities and those which have formed the UIA.Figure 1.1 UTOPIA and UIA Network Membership. UTOPIA has 11pledging Utah cities. Eight pledging cities went on to form the UIA, whichraised the additional funds needed to complete construction of thenetwork.Member Cities 1 UTOPIA UIABrigham City X XCenterville X XLayton X XLindon X XMidvale X XMurray X XOrem X XPayson 2XPerryXTremontonXWest Valley X X1. UTOPIA non-pledging cities: Cedar City, Cedar Hills, Riverton, Vineyard, and Washington.2. Non-pledging UIA member.UTOPIA Offers Advanced Speed throughA Fiber-to-the-Home NetworkUTOPIA was created tobring high speedtelecommunications tomember cities.UTOPIA is a fiber-to-the-home (FTTH) network, meaning that itemploys fiber-optic cable throughout the entire network to speed thetransmission of data. UTOPIA’s network has three main sections: (1)the Network Operations Center (NOC) and other centralinfrastructure (lines running from city to city), (2) the middle mile orlocal level infrastructure (e.g. fiber-optic lines running downneighborhood streets or electronics shelters), and (3) the last mile,which represents the fiber-optic line extending from the street curb tothe customer premise (normally much shorter than an actual mile).Currently Provo, with its iProvo Network, is the only other Utahcity to attempt a municipal FTTH network. Spanish Fork alsooperates a municipal telecom network that employs fiber-optics to aneighborhood node from which coaxial cable lines extend the serviceto the home.- 2 -A Performance Audit of the Utah Telecommunication Open Infrastructure Agency (August 2012)
UTOPIA Believes It Offers aPublic Sector Solution to a Local NeedUTOPIA’s critics question whether a public entity should provideservices already offered by private industry. However, UTOPIA’sfounding members believe that advances in entertainment, business,medicine, and education are increasing the demand for highbandwidth communications. The private sector, they say, is reluctantto replace its existing copper wire and coaxial cable technologies withthe more advanced fiber-optic technology required to meet thatgrowing need. In fact, the leaders of several UTOPIA member citiesreport that the lack of advanced communication services makes itdifficult to attract new businesses to their communities and retainexisting ones. For this reason, they believe that UTOPIA is addressinga vital community need that is not being addressed by the privatesector providers.Member cities reportthat private industrywas unwilling toprovide theircommunities withadvancedcommunicationsservices.State Law Prohibits UTOPIAFrom Offering Retail ServicesUtah Code 10-18-101 et seq. limits head-to-head competitionbetween the public and private sectors by requiring municipalbroadband networks to offer services on a wholesale basis. Unliketheir private networks, governmental agencies are prohibited fromselling telecommunications services directly to consumers. As a result,both UTOPIA and iProvo must rely on retail service providers todirectly engage the customer. Retailers offer bundled or stand-aloneservices. For example, they may provide their own proprietary videoservice in combination with high-speed internet connection. Someoffer a “triple play” package which includes data, video, and voicecommunications for a single monthly fee. Provo City’s iProvo networkalso operates under the same legal constraints as UTOPIA. Incontrast, Spanish Fork created its broadband network before therestrictions were put in place. For this reason, the Spanish Forknetwork is allowed to offer network services directly to city residents.Audit Scope and ObjectivesMembers of the Utah Legislature asked for an audit of UTOPIAso residents of UTOPIA member cities might know how theorganization has used its funds. Legislators also asked for a review ofOffice of the Utah Legislative Auditor General - 3 -
Page 1: REPORT TO THEUTAH LEGISLATURENumber
Page 5: DigestA Performance Audit ofUtah Te
Page 9: Table of ContentsDigest ...........
Page 14 and 15: the organization’s general manage
Page 16 and 17: UTOPIA Did Not Reach Its Goal to Bu
Page 18 and 19: UTOPIA did notachieve its goal toco
Page 20 and 21: Figure 2.4 Summary of the Agencies
Page 22 and 23: efinancing, the maximum amount pled
Page 24 and 25: One consequence of the slow growth
Page 26 and 27: factors in deciding where to build.
Page 28 and 29: completed in a timely fashion and h
Page 30 and 31: Figure 2.10 Seven Years of Operatin
Page 32 and 33: Figure 2.11 By 2010, UTOPIA Had Spe
Page 34 and 35: plan did not anticipate the difficu
Page 36 and 37: end of 2010, 3,698 former subscribe
Page 38 and 39: Uncollected revenuesfrom retail pro
Page 40 and 41: agreed to provide UTOPIA with a $66
Page 42 and 43: As problems mounted, the board deci
Page 44 and 45: The data in Figure 3.2 shows that,
Page 46 and 47: As stated previously, two possible
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Page 50 and 51: UTOPIA Has a New Development PlanAi
Page 52 and 53: Centerville and in its legacy areas
Page 54 and 55: UTOPIA shouldidentify specific area
Page 56 and 57: e applied. Not surprisingly, we fou
Page 58 and 59: act in its entirety. Also, the agen
Page 60 and 61: Manual, which describes how local a
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in public, the executive committee
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separate public body that must comp
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public entities that are subject to
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This Page Left Blank Intentionally-
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- 62 - A Performance Audit of the U
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Five‐Year Plan Summary 2Agency (U
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Five‐Year Plan Summary 4cities’
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