Orem rejects Macquarie proposal for UTOPIA

Orem city council members voted 6-1 to reject the proposal from Macquarie to create a public-private partnership with UTOPIA on Thursday night. The decision came in the evening before the deadline with Macquarie and Orem will join four other cities that have also opted out of the proposal.

Orem Councilwoman Margaret Black voted for the proposal, all other council members voted against.  All involved cities had a deadline of June 27 to make a decision. Payson, Lindon, Murray and Centerville have also voted against the deal.

Orem’s options for UTOPIA now are to sell (Digital First has expressed interest but has yet to publicize the proposal), pull the plug (which would cancel the accounts of the existing users, risk litigation, eliminate revenue and not erase the debt), or continue as they have been.

Orem city leaders met with Vivint at a special city council meeting on June 24 to discuss fiber network alternatives. Vivint has been testing its own 50 Mbps wireless broadband service.

At the two previous public meetings, Orem citizens had expressed both support and concern over what to do with UTOPIA.

Katie Patty, an Orem citizen and supporter of the Macquarie deal, asked if Macquarie would let Orem and the other cities who declined the offer back in if they changed their minds, and if those cities would be treated differently.

“Yes, they’ll be treated differently. They can come back if it’s a good enough deal. It’s not a free option and no one wants to waste their time. If we don’t have a deal to scale, we’ll leave you all alone. Opting in and opting out and opting in and opting out isn’t fair to anyone,” said Duncan Ramage, a representative from Macquarie.

Macquarie will still forge ahead on their proposal with the cities that agreed to proceed to milestone two, Perry, Brigham City, Layton, Midvale, Tremonton and West Valley City. Milestone two furthers the discussions and solidifies details of technical aspects and the divisions of revenue.

The Utah Taxpayer’s Association has been campaigning against the mandatory utility fee of the proposal. They cited the mandatory utility fee as their reason for disapproval of the proposal and concern for  residences who cannot afford the fee or are not interested in connecting to the internet.

The Macquarie-UTOPIA public-private partnership proposal would complete the fiber-optic infrastructure and provide internet access to all citizens in cities that join the public-private partnership. A monthly utility fee of an anticipated $18-$20 will be assessed to all residences for 30 years, whether they choose to get online or not ($9-$10 for multi-dwelling units and $38-$40 for businesses). Everyone will receive 3 Mbps and usage caps out at 20 GB, with the option to upgrade to faster internet through ISPs. The six participating cities are counting on those upgrades to bring in money to pay off the UTOPIA debt.