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Telecom Competition: Desert Morning News overlooks need for consumer choices
Taken from Utahns for Telecom Choices External Site
Written By Daniel C. Snarr
December 09, 2003

NOTE: If you would like to see high-quality, cost-effective alternatives to current telephone, Internet and cable TV services, please read this message and respond to Murray Mayor Daniel C. Snarr at telecomchoices@hotmail.com.

Dear Friend:

I am writing you in my capacity as a member of the Advisory Board of Utahns for Telecom Choices.

I subscribe to the Deseret Morning News and appreciate their voice in community affairs. That's why Sunday's editorial opinion about the UTOPIA community-owned fiber-optic network was such a surprise.

I'm amazed that the business-minded folks at the News completely overlooked the most important feature of Utah 's community digital pipeline project...

Competition in telecommunications services.

Would the Morning News argue that Utah should be served by only one airline? Of course not. But if airlines had to build their own airports, that likely would be our situation.

A metro area of our size can support the cost of building only one major airport. If we expected the airlines to build the airports, we'd probably have just one. And it would only make sense for that airline to protect its position. We'd be left without choices.

Instead, city governments build airports. This allows several airlines to compete for business on the basis of service and price. The result is affordable, convenient air travel bringing more trade, tourism and better quality of life. The cost of the airport is paid back by fees included in ticket prices paid by the passengers who use the airport. (In fact, the Salt Lake Airport had a cash surplus of $38.6 million last fiscal year.)

Now, here's the crucial principle that the Morning News completely missed:


We can and should take this same competition-enhancing approach to telecommunications, including voice, video, TV entertainment and the Internet.

It's easy to understand how the News overlooked this critical point. Like most people, they think of the network owner and service provider as one and the same.

Historically, once the first company installed a network of copper wires, it wasn't economically feasible for would-be competitors to install their own parallel networks. So we ended up with a network owned and operated by a single regulated monopoly.

Existing networks have physical limitations that make it difficult, even impossible, to offer advanced services or share the capacity among multiple service providers. In short, the limitations of the technology dictated limitations in the business model.


But this is the digital age, and we don't have to think that way anymore.

The enormous capacity of fiber-optic technology makes it feasible for multiple service providers to share a single network delivering high-bandwidth services such as TV, HDTV , video streaming, video conferencing, ultra high-speed Internet access, telephone service.

We can now reject the outdated model in which each service provider has to build its own physical infrastructure. The public can provide a high-capacity digital network and allow multiple private companies to compete across that network, just as multiple airlines compete at the same airport.

Under this model, technology is no longer the obstacle to competitive telecom services. The only obstacle is old-fashioned thinking. I'm frankly disappointed that a newspaper that usually champions free enterprise would oppose a project that fosters competition and consumer choices.


How will the community-owned fiber-optic pipeline promote
competition and bring prices down for families and businesses?

By the middle of 2004, residents in UTOPIA member cities will begin to see more advanced, ultra high-speed Internet access, telephone, TV channels and "video-on-demand" at very competitive prices.

Businesses will also see competitive offerings for everything from a few phone lines to full-blown 100-megabit Internet access 60 times faster than a T-1 and fully capable of live video conferencing with no choppiness or hesitation.

Won't it be great to have choices?

Already, multiple companies are asking to use the network. Within months of launching the community digital pipeline, additional companies will begin offering competing services on the network.

Won't it be great to have choices?

As these new competitors gain ground, all consumers will benefit from the increased competition. We hope, in time, all companies, including the current providers of phone, cable TV and Internet access, will come onto the community network (the current providers have been invited from the very beginning but have so far declined).

Won't it be great to have choices!

How will the Community Digital Pipeline pay for itself?

Here's how the network gets paid for:

  • Residents and businesses subscribe to the services they want
  • They pay private companies for those services
  • The companies pay the network owner (the group of cities) for use of the fiber, and
  • The network owner (group of cities) pays off the bonds.

The Morning News was skeptical whether the network would break even. Here's what has to happen--see what you think:

  • By the fourth year of operation...
  • 30% of households and businesses in member cities have to...
  • sign up for at least one service over the network (phone, TV, Internet, video on demand, etc.).

That's all it will take for the network to pay for itself.

Provo City 's pilot project (not part of UTOPIA but using the same technology) signed up over 40% in the first year alone. Spanish Fork's municipal cable system attracted 45% of residents in its first year.

With those facts in mind, I have to respectfully disagree with the News' conclusion that they "don't hear an overwhelming demand from the public for this" and that "most residents seem satisfied with the Internet and cable services offered" by the current providers.

We hear the demand from citizens, families and businesses.

The city councils and mayors of the 18 cities that are members of UTOPIA talk to the citizens and businesses in our cities. We hear the demand, even if the Deseret News does not.

Cities have been working on this in public meetings over the last 18 months. Businesses and consumers are excited about it. Independently-verified feasibility studies indicate that over two-thirds of residents say they would buy services from competitive providers over the network. As we talk to citizens, even when they understood it involves city loan guarantees, they are virtually unanimously positive about the concept.

If you want more choices in telecom, please say so NOW

We have one crucial step remaining to make the project a reality and give telecom choices to our citizens and businesses. The city councils of the member cities have to take final votes on pledging to financially back a portion of the bonds-essentially "co-sign" on about half of the loan.

Qwest has made it known that they intend to keep the councils from voting in favor of the pledge. They want to kill the project. In other states, the incumbent service providers have used all kinds of scare tactics and threats to confuse the public and weaken the political courage of city councils.

Here's where you come in. This week, we are forming a coalition of citizens, businesses, educators and government leaders to support the concept of the community digital pipeline:

Utahns for Telecom Choices

This coalition is not a governmental entity and will be privately funded. Its purpose is to spread the word about the new model of a community-owned network open to many service providers, and to make sure city councils know that they have the support of the overwhelming majority of the citizens and businesses in their areas.

We'll have a web site up sometime soon with complete information, but meanwhile we need to hear from you. By replying to this email, you can add your name (and that of your organization) as a charter member of Utahns for Telecom Choices.

To add your name to the list, please send a short message to me at telecomchoices@hotmail.com giving your permission for your name to be added to the list of public supporters of the UTOPIA Community Digital Pipeline project.

Please forward this message to everybody you know who may be interested in this project. We need all the help we can get.

Let's make sure our city councils know that we support their efforts to give us more choices in telecommunications services. Bring on the bandwidth!

Daniel C. Snarr
Mayor, Murray City

Advisory Board Member
Utahns for Telecom Choices
telecomchoices@hotmail.com

My favorite predictions about the adoption of new technologies

"This telephone has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us." Western Union internal memo, 1876.

"The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?" David Sarnoff's associates responding to his urgings for investment in radio.

"I think there is a world market for about five computers." Thomas Watson Sr., founder of IBM, 1943.

"There is no reason anyone would want a computer in their home." Ken Olson, president and founder of Digital Equipment Corp., 1977.

"[Fiber-optic's capabilities] are way more than what most consumers need in their home. Why provide a Rolls-Royce when a Chevrolet will do?" Jerry Fenn, Utah President of Qwest, 2003

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