Bountiful Issues $48M Bond To Build City-owned Fiber Internet Network

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BOUNTIFUL – Fiber Internet has spread throughout Utah in recent years, and Bountiful is now on track for faster internet after the City Council voted unanimously Tuesday to approve the construction of a fiber network in the city by Murray-based service provider UTOPIA Fiber.

To finance the construction of the network, Bountiful is issuing a $48 million bond.

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

This type of structure creates a competitive market where Internet service providers “must compete for customers and have incentives to innovate rather than foreclose competitors with a de facto monopoly,” according to the Institute for Local Self-Reliance.

“The purpose of the city’s involvement in fiber is to provide a competitive marketplace for Internet service providers through an open access network,” Bountiful City Manager Gary Hill wrote in a letter to the council. “Resident requests and sentiment … demonstrate a need for city involvement to provide adequate, competitive, reliable broadband services.”

The debt service for the bond will be paid for using system revenue, according to the letter.

“Based on conservative take rate estimates provided by UTOPIA, Bountiful Fiber should have enough customers to generate a profit above debt service beginning in year five,” Hill said.

The journey to bring fiber internet to Bountiful was years in the making.

It began in 2020 when the city began investigating the need, demand and desire for fiber-based internet services following requests from residents.

“The COVID-19 pandemic has recently forced residents to seek more online services such as education and access to remote work. City elected officials and staff have begun to hear more from concerned citizens about their frustrations and difficulties in obtaining reliable and high-quality Internet services in Bountiful . . ,” the letter said.

In February 2021, Bountiful’s mayor and city council directed city staff to begin looking at options to “provide fiber internet services to all homes and businesses in Bountiful.”

Then, in April 2021, a request for information was released to fiber providers and led to interviews with four potential providers. Four months later, in August 2021, the results of the request were shared with the mayor and council, who then ordered Magellan Advisors to conduct a feasibility study, according to the letter.

Good policy is usually something that is intended to best serve the constituency of people by providing a solution to a problem. Many of us here today … believe that deploying a citywide fiber network is simply good policy for Bountiful residents. –Cecilee Price-Huish, Abundant Board Member

After a nine-month feasibility study, the City Council again directed city staff to issue a request for proposals for a fiber provider to build and operate a fiber network in the city.

“The ideal partner will have experience in both areas and a track record of cost-effective and rapid deployment. Over the next several months, city staff worked with partners Keller and Heckman to develop the (request for proposals). It is on Released Nov. 1, 2022,” the letter said.

In December, two “qualified firms” were interviewed by an internal review team. After seeing the results — which were shared with the board in January — the board directed staff to begin contract negotiations with UTOPIA Fiber.

On Tuesday, the City Council unanimously approved the expansion of the fiber network.

“Good policy is usually something that is intended to best serve the constituency of people by providing a solution to a problem,” Councilor Cecilee Price-Huish said at Tuesday’s meeting. “Many of us here today … believe that deploying a citywide fiber network is simply good policy for Bountiful residents.”

The initial contract term is 10 years, and construction of the network is expected to take two to three years. Customers in certain areas will have access to fiber within 18 months of construction starting, according to the letter.

An 81-page report that looks deeper and contains more details about the contract between Bountiful and UTOPIA Fiber can be found here.

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