SANTA CLARA — The Santa Clara City Council unanimously approved an agreement for a high-speed, fiber-optic network to every home in Santa Clara.
The approval by all five council members Wednesday night at Santa Clara Town Hall came after representatives from internet providers TDS and InfoWest made a last effort to convince the council to reject the agreement and give them a chance to provide the network.
Under the agreement, Santa Clara will provide back-up funding to a bond by the Utah Infrastructure Agency (UIA) that will see UTOPIA Fiber build an open-access, fiber-optic internet network to just about every address in the city. Those lines will then be leased out to between five to 15 internet service providers initially and open to any other internet service providers that wish to provide service on the network
Council member Jarett Waite, who led the effort to bring a fiber-optic network to every house, told the council that with the approval, the construction of the network should begin by spring. And while UTOPIA has provided a two-year timetable for the network to be completed, Waite said it could be finished as soon as the end of 2022.
While again expressing appreciation to the TDS and InfoWest representatives for their previous efforts, he said Santa Clara residents are done waiting for the providers to follow through on previous assurances to boost internet speeds and access in the city.
“The last few months, we met with TDS and InfoWest. We came away from those meetings that no clear timeline could be established,” Waite said during the council meeting. “Our residents clearly stated that they want this now.”
Should the Santa Clara UTOPIA network be completed, it would be the first time a Southern Utah city would have fiber-optic internet access to every home.
South Central Communications committed in 2019 to privately build fiber-optic internet to every address in Cedar City, though at this point that has not been completed.
Waite and representatives from UTOPIA have previously said that no additional fees will be charged to residents unless they choose to sign up with one of the providers on the network. According to the agreement, the city won’t be taking out the bond and will only provide payments to it as a loan if UTOPIA falls short.
Santa Clara City Attorney Matt Ence said he concurs with the conclusion that the city won’t be on the hook if UTOPIA ultimately is unable to fund the network.
“I read the agreement. It appears consistent to what has been presented,” Ence said. “I have no issue with it.”
But differing with that conclusion is Rusty Cannon, president of the Utah Taxpayers Association, which has previously opposed efforts by other cities in Utah to partner with UTOPIA Fiber.
“Despite what supporters are saying, city taxpayers could very well be on the hook for the project in the future. By backing the debt with city tax revenues, if subscriber uptake is not high enough initially or fall off in the future, tax revenue from the city can be called upon and likely would be,” Cannon told St. George News. “The UTOPIA financials show that the 11 member cities have had to send tens of millions of dollars to UTOPIA over the last 10 years. UTOPIA has been a massive money-losing project for those original 11 cities.”
Waite and representatives have acknowledged that when it was first created in a partnership with 11 cities in 2004, it had a rocky start where cities initially took on debt. However, they say since 2010, UTOPIA has restructured the way it creates agreements, and since the initial cities have finished their internet networks, they are no longer incurring debt on them.
“It’s important to recognize that what we’re proposing tonight is very different than those who have failed,” Waite said.
Making a plea against the network in person in the council chambers was Kelly Nyberg, president and CEO of InfoWest. He compared Santa Clara backing UTOPIA Fiber’s network to the city backing a competitor to Frei’s Fruit Market.
“What if the city decided one day that the market wasn’t good enough? They needed to bring in a bigger, better fruit market,” Nyberg said. “How would that impact Frei’s Fruit Market? Now it would be in city’s best interest for Frei’s Fruit Market to fail.”
Waite acknowledged it will be in the city’s interest for the UTOPIA Fiber network to be successful, but said that UTOPIA will actually operate and maintain the network with the Utah Infrastructure Agency. And council member Leina Mathis also noted providers will be free to join the UTOPIA network themselves as providers.
“The difference is we don’t own the system. Everyone in Santa Clara will benefit whether they join the network or not. This will boost competition.”
Before the meeting, TDS Senior Vice President of Corporate Affairs Andrew Peterson issued a statement asking the council to allow TDS to offer an alternative plan. TDS repeated an offer it made in August to offer all customers in Santa Clara 1 Gbps service. It also offered to partner with the city to provide fiber to the entire community at half of the cost as the UTOPIA partnership.
“If competition is what is driving this decision, we want a chance to compete and partner with Santa Clara,” Peterson said.
At the meeting in person, Brenda Cody, a local field manager for TDS, reiterated the offer.
“If you’re willing to work with us, we believe we can overbuild here quicker,” Cody said, noting that TDS’s lowest rate for fiber internet service starts at $30 and with a $30 starting monthly rate just to pay the UTOPIA maintenance fee, the rate on the citywide network will increase.
Waite noted that he is a TDS customer and after the problem of the initial rate, customers see their rates rise after the promotion ends.
“One of the biggest concerns is yes the rate starts at $30 but where does it go from there. After the teaser rate, I’m paying $65 now,” Waite said.
The council member also noted another comment during the meeting from resident Charlie Walker, who had recently retired from CenturyLink and spoke against the agreement saying the city would be picking winners and losers.
But Waite said: “I think if we partner with TDS, that is picking winners and losers. This is something that has to be open.”
Council member Wendell Gubler said ultimately, his decision to vote yes came down to advice from his son, a computer programmer, who has lived in two Northern Utah cities that already have citywide fiber-optic networks built by UTOPIA Fiber.
“He just swears by UTOPIA. It’s so much faster,” Gubler said. “With more people working from home, it’s more important for people to have that speed and access.”
First power rate hike in three years
The council unanimously approved, 5-0, the city’s first power rate increase since 2018.
The city’s Power Supervisor Gary Hall told the council residents they will see an average monthly increase of $3, and the increase is needed to keep up with the cost of generating power.
Resident Tina Taylor spoke out to the council against the rate increase.
“It’s not so much the $3. It’s the fact it’s going up again,” she said, then asked why the city didn’t just switch to a private power company like Dixie Power. “I don’t understand why Santa Clara is more expensive. I wish I could go two blocks.”
Mayor Rick Rosenberg said he understands Taylor’s feelings, but that Santa Clara is doing more diversification of power that will in the long term keep it from being caught in the lurch as more coal resources go offline.
“Dixie power is 100% coal. Santa Clara has diversified its portfolio based on what’s happened to coal. Some coal, natural gas, wind, solar, geothermal,” Rosenberg said. “Based on what we’re paying for those resources, if you don’t keep up with increase of costs, you lose from your city reserves. We’re obligated to keep up with the rising cost of power.”
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