Op-ed: Stop investing taxpayer dollars on a failed project

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Optic cable connected to a single patch panel.

A longstanding principle of the Utah Taxpayers Association is if a service can be found in the yellow pages, then government shouldn’t be providing it. We have seen far too many times where government attempts to compete with the private sector and ends up wasting taxpayer money. One prime example of this is the failed UTOPIA boondoggle that continues to plague the 11 cities that created the entity.

On Aug. 14, the Utah Infrastructure Agency, which was created in 2011 to give UTOPIA more borrowing capacity, will vote on taking out a $13 million bond to further build out the UTOPIA network in hopes of making the whole effort profitable. The vote will likely pass but the effort to make UTOPIA and UIA a success for taxpayers will never be realized.

This attempt to continue to send money after a bad idea has to stop. The private sector is already providing the same service that can be obtained through UTOPIA and it is past time that the local governments that created this mess find a way out.

Recently, the University of Pennsylvania released a study that examined 20 municipally owned fiber networks from across the nation; UTOPIA was included in the study. The report found that a majority of these networks struggle to recover the costs that were incurred to build them. It went on to show that of the 20 projects, only nine have had a positive revenue stream but that of those nine, five are generating returns so small that it would take more than 100 years for the project costs to be recovered. Only two of the 20 networks are expected to earn enough to cover their project costs during the useful life of the networks.

The Penn report went on to state that these government-owned ventures struggle to ever make a profit and put taxpayers in danger of seeing their local government increase debt, lose bond rating status and elected officials becoming distracted from other important issues because they are solely focused on the government’s fiber business. The report found that if UTOPIA continues in its current state, that the project will likely never turn a profit. It observed…

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