An agreement between Sydney-based investment banking firm Macquarie Capital and a consortium of Utah cities will bring a new infrastructure project.
High-speed broadband is coming to Utah, thanks to investments from an Australian banking firm.
The Sydney-based firm, Macquarie Capital, announced in December a new partnership with the 16 member cities of the Utah Telecommunications Open Infrastructure Agency (UTOPIA). The new fiber network is to bring high-speed Internet to 150,000 households and all businesses in 11 UTOPIA member cities.
UTOPIA and Macquarie agreed to a 30-year contract. At the end of the contract, the infrastructure will belong to the cities, and according to Macquarie, the cities will at that time have no new debt. This deal is a response to concerns from communities in the state that the demand wasn’t there to make a municipally-owned network financially viable.
UTOPIA pays for construction costs by pledging sales tax as collateral to secure a bond. Because the cities pledge together, they can use a collective bond rating, and according to Wikipedia, this makes for a low-risk investment and secures UTOPIA a low interest rate.
Macquarie representative Nicholas Hann shared that the model his firm is pursuing in Utah could be scaled to other cities around the nation in new contracts.
“After Macquarie completes the build out for UTOPIA members, I expect neighboring cities that granted the company free access to rights of way will clamor to be next, as will cities along Macquarie’s backbone from Utah to Las Vegas,” Hann said.
Unresolved legislative efforts in Utah will determine whether businesses in cities that are not members of UTOPIA will be allowed to purchase broadband from the UTOPIA network.