Bonding for Broadband


One of the little noticed bills in the past utah Legislative General Session was Senate Bill 184 which allows the creation of municipal improvement districts for telecommunications. This is the way it works:

  • A group of property owners decide that they want some telecommunications service (like broadband).
  • They petition the city to create a "special improvement district" for that purpose and the property owners are put into that district. They need not be contiguous.
  • The city creates the district, bonds for the capital required to build out the facility, and contracts with someone to do the build-out and someone to provide service.
  • The city charges members of the improvement district a property tax sufficient to meet their bond obligation.

This creates a situation where a group of property owners can more or less take matters into their own hands, with the city's cooperation, to create a viable broadband alternative. The city has a much lower cost of capital since these are general obligation bonds and thus tax free than a private entity making previously questionable project profitable.

This is an interesting development with respect to Utopia. It could be used by non-Utopia cities to provide broadband to their citizens. I've heard of non-Utopia cities who are considering using this bill to do just that. I think there's also a way for Utopia to use it to use general obligation bonds in place of revenue bonds on at least some of the project. Between this, Utopia, and the Utah Valley Community Network (or UVCN) initiative there are at least three very different models that are being tried out right now along the Wasatch Front to deliver broadband. Let a thousand flowers bloom.