A Performance Audit of the Utah Telecommunication Open ...

plan did not anticipate the difficulty UTOPIA would face in resolvingright-of-way disputes. These mistakes were costly and contributed tothe delayed completion of the project.We believe an underlying problem throughout UTOPIA’sexpansion is the lack of a carefully prepared development plan andpolicies to guide the construction of the network. When we asked tosee the original planning document for UTOPIA’s expansion, staffwere unable to produce one. They said the planning of the networkwas initially carried out by UTOPIA’s contractor, Dynamic City, andthat they may or may not have had a written plan. However, if itexisted, no copy was on record at UTOPIA’s main offices. We wouldfind it alarming if a government entity attempted such a highlycomplex and expensive construction project without drafting a formalwritten plan approved by a governing board. However, board minutesmake no mention of the board ever reviewing and approving such adocument and staff report that no such document is on file.The Decision to Build in Many Cities Simultaneously Was aMistake. UTOPIA board and staff commonly identified as onemistake the decision to attempt a “ubiquitous build.” That is, theagency attempted to build at least a portion of its networkinfrastructure in each of its member cities at the same time. Thisapproach to construction led to partially completed sections ofnetwork in multiple cities at different locations that are still incapableof producing revenue.At first, UTOPIA intended to complete construction of thenetwork in a few construction areas or footprints at a time. Inaddition, the initial strategy focused on locations that were expected toprovide a high initial return on investment. Once an area wascompleted, UTOPIA could enroll subscribers and immediately begingenerating the revenue needed to build in other locations.Citing politicalpressures, UTOPIAleadership altered itsbuild strategy toappear moredemographicallyinclusive.One consultant, who worked with UTOPIA from the beginning,told us that political pressure led them to adopt the strategy wherebythey would build portions of the network in many differentcommunities at once. In 2007, a year after the agency completed itsfirst phase of construction, UTOPIA was accused of abandoning itscommitment to universal service. Instead, its critics said, the agencywas focused exclusively on wealthier neighborhoods and was “cherrypicking” the high-end subscribers.- 24 -A Performance Audit of the Utah Telecommunication Open Infrastructure Agency (August 2012)