Utopia Information

Why Utopia?

The UTOPIA network delivers light speed services to your door. With UTOPIA, you can connect with friends, family, entertainment, schools, hospitals, and businesses with greater speed and clarity than ever before.

Why Fiber?

Fiber is a future proof technology that allows us to do so much more than the antiquated technologies that are so prevalent today. Imagine downloading a movie in the time it takes to pop a bag of popcorn, speaking with your doctor via video-conference, or significantly lowering your power bill with smart-grid power technology. NOW is the time to take advantage of this life-altering technology.

Benefits of UTOPIA

The fastest internet connection on earth
Freedom to choose your own provider.
Dedicated Connection
Increased property value
Competitive pricing and services

Questions? Contact, UTOPIA at 801-613-3880 I This email address is being protected from spambots. You need JavaScript enabled to view it. or visit them online at http://utopianet.org

Answers to Frequently Asked Questions about UTOPIA and UIA

What is UTOPIA?

UTOPIA is a state-of-the-art fiber optic network built by your city for your community. Your community-owned fiber optic network allows residents to connect to the world in a way they have never experienced before, providing blazing fast Internet speeds, phone, and television services.

How did UTOPIA get started?

In 2002, numerous Utah cities wanted incumbent telecoms providers to upgrade their infrastructure with fiber optics. Some cities even offered to pay for this upgrade. The cities believed that by making advanced high speed broadband a reality for residents, businesses and educational institutions would strengthening economic development and improve quality of life. When the incumbents declined, the cities united as UTOPIA to provide this infrastructure themselves.

How is UTOPIA different?

The UTOPIA network is open access. That means subscribers get to choose the service provider they want. Our open access network promotes consumer choice because any ISP can use it. And if you don’t like your ISP, it’s easy to change.

What are the benefits of fiber optics?

•    Consistent, parallel speeds. That means when you sign up for a 50/50 connection, you’ll get 50 Mbps up- and download.
•    A dedicated line—no sharing. When you get home from work and need to use the Internet, you’ll enjoy all the bandwidth you need, because you aren’t sharing a cable or DSL connection with all the school kids in the neighborhood.
•    “Future proof.” This is a bit of an abstract concept, but the great benefit of fiber optics is that it can handle immense amounts of data, which means it can handle applications we haven’t even thought of yet. Whereas 700 Kbps was once the definition of broadband, these days 5 Mbps is barely adequate. What will our everyday usage require in 2015, 2020, and beyond?

Isn’t optical fiber obsolete?

Until some mechanism is found that can exceed the speed of light, optic fibers—which transmit data using light— are never going to be obsolete. Fiber provides more accurate and reliable data transmission than copper wiring (“cable”), and fiber has a much higher maximum capacity (i.e., “bandwidth”). Wireless is also exciting and will spawn many new innovations, but wireless connections will always be far slower than fiber connections.

What does UTOPIA cost?

How does $65 a month sound for a 50/50 connection? By choosing a UTOPIA lease option, you can pay $30 a month for the infrastructure and $35 a month for 50 Mbps service. Dollar-for-dollar and bit-for-bit, that’s a better deal than Comcast’s or CenturyLink’s non-promotional pricing.

If you want to handle the infrastructure using our ownership-like model, we offer the CUE (Customer Utility Enhancement) connection. Customers can pay for it upfront for $2,750. Or, they can pay $300 down and $30 a month for 10 years, or no money down and $25 a month for 20 years. The ISP will charge for their services as well.

What is UTOPIA?  UTOPIA stands for the Utah Telecommunication Open Infrastructure Agency, a group of 16 Utah cities that joined together in 2002 to build a fully fiber-optic network. 11 of these  16 cities agreed to finance (through bonds) the network’s construction – which connects fiber directly to homes and businesses within their communities. The City joined UTOPIA 26 March 2002

The UTOPIA cities view adequate connectivity, and the seamless ability to expand connectivity as needed, as essential infrastructure. When these 16 Utah cities were unable to get needed speeds and services for their residents from incumbent providers, they decided to build a network that could meet current and future demand. Private-sector service providers use the cities’ network infrastructure to offer Internet, voice, video and other services

Debt: the approval of the first bond took place in the June 15, 2004 Orem City Council meeting, the original bonds were refinanced and additional bonds were issued with restructured pledges in the  May 2, 2008 Orem City Council meeting.  UTOPIA has issued $185 million in bonds and Orem has pledged a portion of its sales tax receipts to pay for UTOPIA debt if revenues from UTOPIA sales are not enough to cover annual debt payments.

On July 18, 2006 UTOPIA received approval for a loan from the Rural Utility Service (RUS) of the Federal Government. UTOPIA went forward with work based upon the approval of the loan but the RUS backed out of the agreement. This action caused severe harm to UTOPIA

UIA:  The Utah Infrastructure Agency (UIA) was developed to be the construction arm of UTOPIA. It is a legally separate organization that has the ability to bond, etc. UIA expands the network through agreements with individual homeowners or business owners wherein the owner by contract agrees to repay UIA for the cost of the connection. This connection fee can be paid for all upfront or over time. The City, on behalf of UIA, bills the owner then and remits payment to UIA. This is done to reduce overhead costs for UIA and to reinforce the connection between the City and UIA.

UIA Debt: On October 26, 2010, when the City formally joined UIA the Orem City Council pledged to support a limited initial bond to build out the fiber network. In May 2011, UIA issued a $29.5 million bond. The City has pledged to support 23% of this amount should there not be sufficient revenues from UIA to make debt service payments.

Expanding Network: The method of expanding the network by having a minimum of 25% of  neighborhood residents commit to pay for the connection fee has worked well in Tremonton and Brigham City. This is the same model used by UIA. New sales began in Orem in late April, 2011. And as of early August, over 190 have signed an agreement with over 100 new connections being made and billed. This business model greatly reduces the chance the City will have to make a payment toward the debt service.

What Would Happen if the City Pulled Out of UTOPIA: Due to the difficulties that UTOPIA has encountered in launching its fiber-optic network, some have asked why the City does not simply walk away from the network. Below are reasons the City is committed to UTOPIA and cannot simply walk away:

1) The City has pledged a portion of its sales-tax base towards repaying a portion of the UTOPIA debt. The City is committed to repaying  21.78% of the current UTOPIA debt representing  $40.3 M over the next 30 years. Walking away from a bond has far more serious repercussions to a city than an individual suffers if they decide to default on a loan.

The City's partners in UTOPIA would sue the City to recoup the money the City has pledged to pay.  The likelihood the City would lose this suit is nearly 100%. The City would then, as noted above,  have to pay the pledged amount with no revenue stream from fiber network to off-set this cost.

The City deals with these partner cities almost daily, defaulting on the City's pledge would destroy these working relationships for decades.

2) Walking away from UTOPIA would strand the 3,000+ Orem residents who now have a fiber connection without service. The City would be left without a means of either providing income from the fiber connections to off-set bond payments or means of providing a service provider for these stranded residents.

3) A city that defaults on loan repayments suffers a credit rating down grade, at a minimum,  this significantly increases the cost of future borrowing. Many bond purchasers would become "gun shy" of purchasing any future debt from a city that defaulted on a prior debt. To entice them to purchase an Orem bond, it would have to be sold at a discount--meaning the City discounts the face value of the bond as an enticement to purchase the debt, again significantly increasing the cost of financing. The negative perception of debt from Orem would not be contained to Orem alone, it would likely impact our neighboring cities as well.

What are the impacts of failure to honor bonding commitments? Increased borrowing costs translate to reduced service levels in future years. Increased borrowing costs mean less money is available for day-to-day service delivery and taxes would need to be increased to cover these costs. Either way, a failure translates into a less efficient City, and  residents in the future would not enjoy the same service levels for the cost current residents enjoy.

An argument might be made that the City's savings by not paying the UTOPIA debt would more than off-set the additional borrowing costs. As pointed out in number one above, the City is almost certain that no matter what argument is made, it will have to pay its UTOPIA debt.

4) The City enters into commitments seriously and honors those commitments. The City has worked hard to establish a reputation based on integrity. Honoring financial commitments is a big part of maintaining this reputation.

The bottom line--leaving UTOPIA is not an option that has any hope of producing anything but damage to the City. The option of sticking it out and working to help UTOPIA succeed remains the best option for the City

Orem City

Orem, UT // 56 North State Street // Phone: 801.229.7000


About Orem City

The City of Orem was organized in 1919 and named after Walter C. Orem, President of the Salt Lake and Utah Railroad. Orem is now the commercial and technological center for Central Utah and is one of the fastest-growing metropolitan areas in the United States. Housing, educational, and employment opportunities continue to be in high demand as Orem's population approaches 91,000 residents.

The City of Orem is located on the eastern shore of Utah Lake and extends on the east to Provo and the foothills of Mount Timpanogos. It shares the general location with Provo, and its history is closely related to that of Provo. Its recent explosive development and growth have resulted in Orem's population exceeding 88,000 people, according to 2010 census figures making it the fifth-largest city in Utah.