UTOPIA Fiber, a consortium of 16 Utahan cities operating an open-access network, has revealed data showing its subscribers' aversion to incumbent telecom companies.
Through its partner ISPs, UTOPIA offers three service tiers—250 Mbps, 1 Gbps and 10-gig—enabling those providers to compete with the likes of Comcast and Lumen’s CenturyLink, two major incumbents in the area. In this year's annual survey UTOPIA subscribers reported their communities have improved significantly (71.55%) due to “municipalities’ wise decisions to invest in fiber.”
A decisive number (78.79%) of residents chose UTOPIA Fiber based on a “dislike of large telecom companies,” the customer survey showed. Though that’s not to say its subscribers don’t care about the routine factors for choosing a broadband provider. Almost all respondents (97.76%) said speed played into their decision, with similar attention on reliability (97.53%) and price (91.71%).
When asked how they heard about UTOPIA Fiber, a majority (80.40%) said that they learned about it either from their city or municipality or through a friend or neighbor. Those sources ranged from the initial project announcement to positive word-of-mouth recommendations, or in some cases, “a sense of pride in choosing a locally owned, community-focused company over larger incumbent providers,” according to UTOPIA’s report.
UTOPIA CMO Kim McKinley said the overall feedback from the survey “suggests community engagement is an essential element in the success of building fiber networks.” Running a community engagement effort is a combination of working with the cities themselves and showing up at local events, McKinley told Fierce.
"We're residents of Utah and we're talking to other residents of Utah, and sometimes with big telcos that's not the case," she said.
Some cities UTOPIA works with have put up displays or used utility bills to tell residents that the company’s broadband services are available in their area.
“I think it's a misconception that people don't believe their city officials. A lot of people live in those cities because they believe in the community, and they trust the community and they think that those city officials are out there for their wellbeing and the betterment of the community,” said McKinley.
“When we see a city come out and fully support this, you see take rates that are higher.” Among respondents, around 70% emphasized the importance of UTOPIA Fiber being co-sponsored by their city.
Amid expanding public partnerships, UTOPIA earlier this year hit 55,000 subscribers, and McKinley said the company is “ahead or on track" for all its projected partnerships and buildouts.
“Well over” 300 of UTOPIA’s residential customers are now on its 10-Gig service tier, she noted.
UTOPIA hasn’t released the specific markets in which its looking to expand yet, although in May executives said it is continuing to add cities across Utah, Idaho and Montana. Last year, the company completed fiber builds in 14 cities across its existing three-state territory and struck a deal with California’s Golden State Connect Authority to boost rural broadband. Executive Director Roger Timmerman has said UTOPIA is also eyeing potential growth in Arizona, New Mexico “and some other states in that area.”
With broadband infrastructure projects expected to boom as a cascade of funding hits the market, more municipalities are stepping up to the plate. Not just with UTOPIA, McKinley said, but also other providers with other models, “because they realize that if they don't get into this game now, they'll be left behind.”
A map from Community Networks shows more than 600 communities in the U.S. are served by some form of municipal network, and hundreds more by cooperative networks.
That said, there might be some hurdles for municipalities trying to tap into funding programs.
Utah is one of 16 states that has laws hindering municipal broadband in some form. According to BroadbandNow, one restriction is that municipal entities are limited in their use of municipal bonds to fund broadband projects.
There is also much-disputed letter of credit (LOC) rule for the $42.5 billion Broadband Access, Equity and Deployment (BEAD) program to contend with, as well as the program's requirements that entities have operational experience before a network project is approved — which many municipalities don’t.
While the National Telecommunications and Information Administration (NTIA) has been “open and listening” to the feedback on the program’s structure, McKinley said “a lot” of municipalities will likely build without money from BEAD because they don't qualify.