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"This is a very powerful test case," said Sharon Gillett, a research associate at M.I.T.'s center for technology, policy and industrial development. "If Utopia succeeds, it will be the first really large-scale deployment of fiber to the home in the United States."
Most people still reach the Internet from their homes through dial-up connections over copper telephone lines, typically limited to delivering data at 56.6 kilobits per second. That speed works well for things like e-mail messages, but it can be frustrating when using graphics-rich Web pages or downloading music and other larger files.
To upgrade dial-up speeds, telephone companies modify their phone lines to offer a technology called digital subscriber line, or D.S.L., which creates a direct connection to the Internet at speeds that vary from 256 kilobits a second to one megabit or so, sometimes more.
Cable companies like Comcast and Cox have been even more aggressive, adapting their systems to deliver Internet services at speeds usually roughly twice as fast as D.S.L. Prices vary, but consumers can pay $30 to $60 a month for high-speed access, whether through cable or telephone lines.
Utah's competitive landscape is similar to those in other states. Comcast's broadband service is available to 80 percent of its residents, and should be available to 90 percent by the end of the year. The company is spending about $350 million to increase the capability to as much as three megabits per second.
For its part, Qwest, the regional telephone company, said D.S.L. service was available in about 60 percent of homes in the region. It is spending $100 million to upgrade its systems in 14 states.
But those delivery systems, as well as the higher-speed direct connections that are commonly used to hook up businesses to the Internet, pale before fiber optic lines. Depending on the kind of equipment used, fiber can deliver data at speeds of 100 megabits a second - even as much as 1,000 megabits under some circumstances - enabling the lines to be used simultaneously to send voice, video, Internet and other data traffic.
As of yet, there are few demands for such capabilities. But Mr. Morris, of Utopia, predicted that it would not be long before promising new applications emerged. For instance, televisions need 6 megabits a second to deliver DVD-quality images over the Internet, and 18 megabits to deliver HDTV. He is counting on residents in the Utopia service area to turn soon to video-on-demand, online video games, Internet and telephone service, all of which consume bandwidth.
The applications are not all here today, Mr. Morris said, but when they are, "you get to 95 megabits pretty quickly." He added: "We built a network that we don't have to change."
The project originated in 2002 after a similar effort by Provo, 35 miles south of Salt Lake City, hit a stumbling block. Provo built a fiber optic network, but it ran into a buzz saw of complaints from private telecommunications companies, notably AT&T Broadband.
The Utah Legislature agreed with AT&T. Following the lead of several other states, it passed a bill making it difficult for government entities to create Internet utilities that sell service directly to consumers. But lawmakers here left the door open for communities to build wholesale networks, which would be required to lease space on the fiber optic lines to companies to provide retail digital services. Following this model, 18 cities created Utopia, vowing to go ahead if they could make the case that the fees paid by consumers and businesses would repay the cost of building the system.
The costs are substantial. Mr. Morris said Utopia would spend about $1,100 a home to run the fiber network by each house in the 18 cities involved, and an additional $1,400 for each home that decided to be connected.
An economic study by DynamicCity in Lindon, Utah, predicted that 40 percent of consumers and residents would sign up after two years. The project was likely to generate enough revenue by its seventh year to cover all expenses, the study estimated.
Mr. Morris said Utopia was arranging financing from a New York investment bank. He said that the cities would be asked to guarantee a portion of the loan Utopia acquires from the investment bank, but that the amount was still being negotiated.
Such a guarantee, while not providing a subsidy in the form of tax-exempt financing, substantially increases the creditworthiness of Utopia, dropping the interest rate to the 6 percent range from as high as 12 percent, Mr. Morris said. But it also puts those cities at risk should the project fail to meet expectations.
Mr. Morris said he expected to secure the financial commitment this month, paving the way for construction to begin next spring or summer.
Some local watchdog groups oppose the venture. Mike Jerman, vice president of the Utah Taxpayers Association, said the government should not be involved in such a fast-changing business. He said that without the taxpayer backstop, Wall Street would be reluctant to give its support. "They were looking at a 12 percent interest rate,'' he said. "That's worse than a corporate junk bond. It's an indication of how much confidence investors have in the project."
Mr. Morris acknowledged the challenge but insisted that Utopia was a golden opportunity to put together a real business to fulfill a genuine public purpose. "This is a major public works project, but it's not like in the era of F.D.R.," he said. "It's not a subsidy. We have a business plan."
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