February 7, 2004 Saturday

Deseret Morning News (Salt Lake City)

Supporters of a government-backed, high-speed data network suffered a defeat Friday as a Senate committee approved a bill many say telecommunications firms backed to prevent the system’s construction.

Several city mayors appeared at the Capitol to support the Utah Telecommunication Open Infrastructure Agency, a $540 million fiber-optic network that promises to offer data speeds 10 times faster than current broadband services. But telecommunications companies argued that government has no business in their business.

SB66, sponsored by Sen. Bill Hickman (R-St. George), would prohibit the use of tax revenue or city general funds to go toward telecommunications networks. The bill would allow such projects to be funded only through a revenue-stream bond, in which the bond debt is guaranteed through projected income. Such bonds would not only come with higher interest rates, but would require a vote of the public, as opposed to a city council vote as drawn up in UTOPIA’s plan.

Mayors have accused broadband companies, such as Qwest and Comcast, of dragging their feet in establishing high-speed Internet service throughout Utah.

Layton Mayor Jerry Stevenson said cities like his are in “drastic need” of broadband service, not just for residents, but for budding businesses. Stevenson, who himself owns a small business, said he watched as Qwest brought in DSL service about 100 yards from his office. “I waited 2 1/2 years for Qwest’s promise for DSL,” which never happened, Stevenson said.

Mayors from Provo, Taylorsville and West Valley also expressed opposition.

Representatives of Qwest and Comcast argued it would be unfair for tax dollars to be used to build a network that would compete against them.

Jerry Fenn, Utah president of Qwest Communications, pointed out that Qwest paid the state $10.4 million in sales tax and another $11.3 million in other local taxes. Fenn argued that money should not be used to put his company out of business.

The Senate Transportation and Public Utilities and Technology Standing Committee sent the bill to the Senate with a favorable recommendation. Committee Chairman Sen. Sheldon Killpack (R-Syracuse) did express concern that because of the technical nature of the issue, state senators may become confused with high-tech terminology.