With new model, Utah takes last shot at Utopia

In addition, Utopia is making a series of other changes meant to improve its economics. It has moved to replace Tetra Tech, the partner it used for fiber deployment. It has transitioned to an in-house network operations center from one managed by PacketFront, which acquired Dynamic City, one of the creators of Utopia’s original business plan. Utopia has also hired a third party to help sign up new customers; Network Community Services representatives are going door to door on behalf of all of Utopia’s service providers, explaining to potential customers what their choices are and helping them sign up. The use of a third party is important, since Utah law forbids Utopia, as a public entity, from actually selling retail services itself.

The changes are being implemented by a new management team installed shortly after the refinancing this spring. In May Utopia named as its new executive director Todd Marriott, a serial startup investor and graduate of Utah’s Brigham Young University who left a job as a Wal-Mart buyer in the early 1990s to help grow telephony startup Citi-Link Communications, both by building its customer base and by helping it acquire Denver-based IP Telephony, a provider of business communications products such as voicemail, virtual PBXs and follow-me services.

Marriott said he initially began looking at Utopia as a potential acquisition target, which is not surprising, since Utah’s other well-known muni network, iProvo, was acquired and privatized this year by Broadweave Networks, led by Steve Christensen, another Brigham Young alum who, like Marriott, once played on the Cougars football team.

When Christensen bought iProvo (which was struggling with churn and top-line problems similar to Utopia’s, with some of the same service providers on the network), he vowed to save it by ditching its wholesale-only model, in which many across the telecom industry had begun to lose faith. That model, which Utopia still shares, creates inefficiencies, he said, by separating service provider from network operator. For example, he told Telephony in May, “It’s incredibly onerous to activate a customer on the network because [service providers] don’t have hooks into the network.”

Fibernet’s Livingston said he sees no onerous issues with Utopia’s provisioning systems today, which he said have been improved under new management. “They’ve made great strides,” he said. “I never really was comfortable with my ability to control my customers [in the past] and how things were working. Now it’s more reasonable.”

In addition, Utopia’s pricing models are being revised from their previous basis on the economics of residential broadband to more profitable commercial services. (In the old model, margins for service providers were low – maybe 5%, Livingston said.) And purchasing is also being simplified, he said, with simpler pricing and an online application programming interface for retailers to plug their own platforms into and automate. “There used to be several components,” he said. “Now I can just buy a single piece for a customer.”