Bill Review: HB60 could dismantle municipal fiber networks

Curt WebbRep. R. Curt Webb recently introduced HB60, a bill that would place very strong limits on municipal fiber optic networks in Utah. An analysis of the bill shows that it is squarely targeted at the UTOPIA fiber optic network, an interlocal agency that counts 18 Utah cities as members. While it’s not unusual to get a bill attempting to further limit expansion or creation of municipal fiber networks, HB60 goes much further by preventing the networks from doing things they are currently allowed to do, apparently with no grandfather clause.

The meat of the bill is to prohibit UTOPIA from expanding or building anywhere outside the incorporated limits of its member cities. Given that Utah spans cities from Tremonton to Washington, this would force them to disconnect non-contiguous cites from each other, creating small islands of fiber scattered across the state. It would also disconnect multiple ISPs from the network who do not have a physical presence within the cities. They also wouldn’t be able to serve any city without building their own connection to it. This would effectively dismantle the network as it exists and potentially torpedo the deal with Macquarie to make a $300M investment in building fiber. Member cities would also be handed back a much more highly distressed asset with almost no revenue.

So what prompted this? It could be businesses who paid to connect to the network. UTOPIA has been allowing companies near the network to pay the full cost to connect, even if they aren’t in a member city. This has helped them meet or exceed all of their financial targets over the last four years. Making this change wouldn’t just prevent businesses from getting access to this critical service; it would also disconnect all of the customers who have already paid for access.

This bill has already been making a lot of noise. Pete Ashdown, founder of XMission, posted an open letter signed by fellow ISPs SumoFiber, InfoWest, and Fibernet, all local companies. An employee of Reddit also appears to have signed on. The story has been picked up in Ars Technica and Slashdot, both major international sources of tech news, and telecom industry publication Broadband Communities. Kansas went through this same thing last week as a bill designed to kill Google Fiber was found to have been sponsored by cable industry lobbyists. Disclosure reports filed with the state show that Rep. Webb has taken donations from CenturyLink ($250.00 on 9/24/2012) and the Utah Rural Telecom Association ($250.00 on 11/25/2013). This does beg the question as to if lobbyists for the telecom industry are behind this bill as well.

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