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SALT LAKE CITY (AP) -- The proposed fiber-optic network that would link Utah cities with rocket-speed telecommunications service lines was dealt a potentially major setback when Salt Lake City Rocky Anderson recommended the state's largest city not participate.
Anderson said the city should withhold financial support for the $540 million Utopia project, The Salt Lake Tribune reported in a copyright story in Tuesday editions.
In a memorandum sent Monday to council members, Anderson said Salt Lake City already has many of the services Utopia would offer, including an abundance of fiber-optic lines available for businesses.
"There is no reason to think this is the right time for Salt Lake City to undertake a project like Utopia," he said. "You've had some very talented people lose billions of dollars in the telecommunications industry the past few years, and I'm not sure taxpayer money should be put at risk."
The council is scheduled to vote April 13 on whether to set aside $4.1 million in tax revenue annually for 17 years to help Utopia get a lower interest rate on bonds that must be issued before construction can begin.
Utopia -- or the Utah Telecommunication Open Infrastructure Agency -- has come under fire in other cities for using taxpayer money to bankroll services that some deem desirable to only a few people.
Eighteen Utah cities two years ago organized Utopia to explore construction of the large-scale network, billed for its capacity to provide Internet, television and telephone services.
Currently, Utah residents use different ways to jump onto the Internet, from slower dial-up phone connections to faster cable modems to the relatively speedy T1 connection favored by businesses.
What Utopia is proposing would literally blow past these options with fiber that can carry digital data -- for text, images and video -- at 1 million times faster than traditional copper wire, coaxial cable or wireless systems can now offer.
Supporters initially promised it could be built without cities' financial backing. However, proponents have since said participating cities would have to guarantee 39 percent of the network's debt to secure favorable interest rates on construction bonds.
So far, Brigham City, Centerville, Layton, Lindon, Midvale, Murray, Orem, Perry, Tremonton and West Valley City have pledged to back their share of Utopia's debt.
Taylorsville and Cedar City voted to continue to participate without providing financial guarantees; South Jordan pulled out of the Utopia project completely.
Utopia General Manager Roger Black has estimated the network must offer fiber-optic access to about 150,000 households to succeed financially. Without Salt Lake City and the three other holdouts, Utopia would have a potential customer base of about 134,000 households.
(Copyright 2004 by The Associated Press. All Rights Reserved.)
