Bountiful issues $48 million bond to build city-owned fiber internet network

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BOUNTIFUL — Fiber optic internet has spread throughout Utah in recent years, and Bountiful is banking on faster internet after the city council voted unanimously Tuesday to allow Murray-based service provider UTOPIA Fiber to build a city fiber optic network.

To fund the network build, Bountiful is issuing a $48 million bond.

While the network will be owned by the city, it will be operated entirely by UTOPIA Fiber, which will lease the fiber to other ISPs in an open-access structure.

This type of structure creates a competitive market in which ISPs “need to compete for customers and have incentives to innovate, rather than simply shutting out competitors with a de facto monopoly,” according to the Institute for Local Self-Reliance.

“The purpose of the city’s commitment to fiber is to create a competitive market for internet service providers through an open-access network,” Bountiful city manager Gary Hill wrote in a letter to the city council. “Resident desires and moods… show that the city needs to make a commitment to provide adequate, competitive and reliable broadband services.”

The debt service for the bond will be paid from system revenues, the letter said.

“Based on UTOPIA’s conservative estimates of decline rates, Bountiful Fiber should have enough customers to generate a profit in excess of debt service by year five,” Hill said.

The road to bringing fiber internet to Bountiful has taken years.

It began in 2020 when, at the request of residents, the city began studying the need, demand, and desire for fiber-based internet services.

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“The COVID-19 pandemic had recently forced residents to seek more online services such as education and remote work access. Elected officials and city employees were increasingly hearing from concerned citizens about their frustration and difficulties in getting reliable and quality Internet service in Bountiful,” the letter said.

In February 2021, the Bountiful Mayor and City Council directed city officials to begin evaluating options to “provide fiber optic internet service to all homes and businesses in Bountiful.”

Then, in April 2021, a request for information was sent to fiber providers, which led to the interviewing of four potential providers. Four months later, in August 2021, the results of the request were shared with the mayor and city council, who then directed Magellan Advisors to conduct a feasibility study, the letter said.

Good policy usually aims to best serve people by providing a solution to a problem. Many of us here…believe that building a city-wide fiber optic network is just good strategy for Bountiful residents. –Cecilee Price-Huish, generous councilwoman

After a nine-month feasibility study, the city council again tasked city officials with submitting a bid for a fiber optic provider to build and operate a city-owned fiber optic network.

“The ideal partner would have experience in both areas and a track record of delivering cost-effectively and quickly. Over the next few months, city officials worked with partners Keller and Heckman to develop the (tender). It was released in November . 1. 2022,” the letter said.

In December, two “qualified companies” were interviewed by an internal review team. After hearing the results – which were shared with the council in January – the council directed staff to begin contract negotiations with UTOPIA Fibre.

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On Tuesday, the city council unanimously approved the expansion of the fiber optic network.

“Good policy is usually something that aims to best serve the electorate by providing a solution to a problem,” Councilor Cecilee Price-Huish said during Tuesday’s session. “Many of us here today … believe that building a city-wide fiber optic network is simply good policy for Bountiful residents.”

The initial contract period is 10 years, construction of the network is expected to take two to three years. According to the letter, customers in certain areas will have access to fiber within 18 months of the start of construction.

An 81-page report providing a deeper dive into the Bountiful-UTOPIA Fiber deal and providing more details can be found here.

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Logan Stefanich is a reporter at covering southern Utah community, education, business and military news.

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