Salt Lake Leaves UTOPIA

Salt Lake Leaves UTOPIA

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SALT LAKE CITY (AP) -- Scared off by potential financial and legal liabilities, two more cities have dropped out of Utah's fiber-optic UTOPIA network.

The moves come at the last possible opportunity for cities considering the $540 million project, which stands for the Utah Telecommunication Open Infrastructure Agency. It was originally billed as an agreement between 18 cities to build a lightning-quick fiber-optic pipeline to provide Internet, telephone and television access direct to households.

But as the project has moved further toward completion, several cities have dropped their financial support or chosen to leave entirely -- two of them in the last week. After South Jordan earlier dropped the project altogether, all but one of the 17 remaining cities is making final decisions this week.

After that, the public policy aspects of the proposal, which have been debated for more than eight months, will give way to implementation, said UTOPIA Chief Operating Officer Roger Black.

Despite the backpedaling this week by Payson and Roy, Black says UTOPIA will still get off the ground if the final votes go as he expects.

On Wednesday, the City Council for Payson -- one of the 11 cities that had pledged to share a portion of UTOPIA's construction debt -- voted to withdraw entirely. Their exit will cut about $260,000 from the roughly $8 million pledged yearly to secure the project's debt.

Councilman Larry Skinner said he voted against participating because he doesn't think governments should be in the Internet business.

"The money does have something to do with it," he said. "But more than the money, I don't think it's the place of government."

Citing liability concerns, the Roy City Council decided Tuesday that the city would withdraw from the project entirely instead of remaining onboard as a nonpledging member.

Black said liability concerns were "grossly overstated."

He said because cities can only pledge surplus funds to UTOPIA, the project won't ever push them into debt. He also said they were somewhat legally insulated if UTOPIA were sued because it's a separate entity.

Cities that vote to remain in the project and don't provide financial guarantees can still have the network built locally, but might not get the infrastructure as immediately as paying members. They also aren't allowed to share in the system's profits, if there are any.

In votes on Tuesday and Wednesday, all 13 cities except Payson and Roy voted to stay their previous courses. That includes seven members who have pledged financial contributions and four others signed on without the guarantees.

On Thursday, the city councils for pledging members Brigham City and Layton were scheduled to make final decisions. A similar vote is scheduled June 24 in Perry. The Layton council voted 3-0 to participate.

The Salt Lake City Council voted Thursday night to withdraw, as had been expected, as the city already had pulled its financial support of the project.

Black said Brigham City, Layton and Perry had all been strong UTOPIA supporters, and he expected them to uphold their funding pledges.

"Under that scenario, there's still adequate size and an adequate financial structure to make this thing work," he said.

(Copyright 2004 by The Associated Press. All Rights Reserved.)

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