By John Dougall
For the Deseret News
Most Utahns probably agree that government should stick to essential
government services and stay out of enterprises that are better performed by
the private sector.
Yet, across the country and right here in Utah, more and more governments
are building government-owned internet networks, despite numerous
private-sector providers being available.
The number of government-owned networks is increasing by the day, and
taxpayers, not users, are often footing the bill. Government-owned broadband
networks cost millions of dollars and divert essential funding away from
services that really matter to the public — services such as police and
fire, roads, water and sewer.
Two unfortunate examples of government-owned broadband networks right here
in Utah are iProvo and UTOPIA.
In 2004, Provo launched iProvo to provide broadband internet services to
homes and business. Provo reportedly bonded for $36.5 million to bring
service to every home in the city and wrote off $5.4 million that the city’s
telecommunications fund owed the Energy Department’s reserve fund to finance
the costly deployment. After struggling to make the network viable, iProvo
was sold in 2008. But its buyer failed to fulfill the terms of the sale, and
iProvo reverted back to the city. In 2013, in a desperate attempt to free
itself of the failed venture, the city ultimately sold iProvo to Google for
$1.
Similarly, UTOPIA (Utah Telecommunications Open Infrastructure Agency) was
launched to provide broadband internet services to a consortium of cities.
But UTOPIA has failed to fulfill its promises for more than two decades now.
The project, which started in 2002, was projected to be finished in three to
four years. Fast forward to today, and it is still incomplete. Not only is
UTOPIA incomplete, but the project has racked up $300 million worth of debt.
And despite iProvo’s example of failure, UTOPIA continues to expand.
For years, UTOPIA consistently lost money, expecting taxpayers to cover
those losses. In addition to this, the government-owned network continues to
expand and pull other cities into this trap. What’s more egregious is that
UTOPIA misrepresented its performance as it pitched cities on buying into
the expansion fever. For example, UTOPIA once claimed the network had “no
cost to taxpayers since 2009.” This statement was patently inaccurate.
As your watchdog, I help you to hold your government accountable. My office
investigated this and other claims, then we wrote a letter identifying these
inaccurate statements. We instructed UTOPIA to do the following:
•Discard or destroy marketing materials with misleading statements.
• Ensure future communications more accurately reflect the dependence on
taxpayer support.
•Take steps to remedy the misrepresentations regarding the lack of taxpayer
support to any individual or entity that received the inaccurate
information.
UTOPIA’s shortcomings do not stop there, however. Rather than providing
internet access to the more than 40,000 homes and small businesses that lack
internet access today, UTOPIA, like other government-owned networks, builds
redundant networks that compete with existing private providers, many who
are also regulated by the cities in which they operate.
Unfortunately, iProvo and UTOPIA are no different from other
government-owned fiber networks across the country, which fail financially
about 90% of the time.
When taxpayer money is being diverted from critical services into pet
broadband projects, that money is not going where it is needed most.
Taxpayers expect government to maintain roads, provide safe drinking water
and keep their communities safe. Money spent propping up broadband services
costs taxpayers money, encumbered by decades of debt, and deprives them of
important and sufficient government services they want and deserve. Plus,
higher taxes burden families, many of whom are struggling today just to
provide for themselves.
Government-owned broadband has done enough harm to taxpayers. iProvo and
UTOPIA should be seen as an example for policymakers of what to avoid.
Public officials across the country, and especially here in Utah, should
resist the appealing allure of expanding or deploying government-owned
networks, which allure has been shown to be deceptive, and ultimately
destructive, to taxpayers.
John Dougall is the Utah State Auditor and is a candidate for Utah’s 3rd
congressional district.
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