UTOPIA's chief operating officer Roger Black said project managers are reworking the construction schedule for the massive $350 million fiber-optic project and completion of West Valley City's portion of the system may get pushed a bit farther down the list in favor of several smaller cities such as Centerville and Tremonton.

The reason: the U.S. Department of Agriculture has launched a new loan program to help small communities build up their telecommunications infrastructure. And that mean UTOPIA must act fast on behalf of its smaller city members to take advantage of the new funding opportunity.

"When we set the original (construction) schedule we hadn't anticipated the availability of those federal loans," Black said. "Their availability, though, may be of immense benefit to the whole project since we are anticipating the take rate (or the number of households signing up to receive services over the UTOPIA system) will be higher in the smaller communities."

And the would mean that UTOPIA's cash flow in the critical early years of operations will get a welcome boost.

West Valley City councilman Joel Coleman said he was surprised to learn that the construction schedule may be revised. Yet he also understands the need for UTOPIA to generate as much cash as necessary to ensure that the participating cities will not have to pony up any money to make sure the project can make its debt payments.

"It's a little disappointing because some of us were really looking forward to getting hooked up in the near future," Coleman said. "And I believe I'm among those who now are going to have to wait. But if waiting can help reduce the financial risk then that's okay with me."

UTOPIA should know within the next several weeks whether the loans have been secured. "If not, then we'll go back to the original schedule," Black said.

He pointed out that to date about 17 percent of the West Valley system has been completed under Phase 1 of the construction schedule. Phase II, which will take place this summer, called for about 35 percent to 45 percent of the system to be completed.

Under the revised schedule, Phase II will see about 25 percent of the system built in West Valley City, Black said.

The good news is that take rates among resident and business customers on that portion of the system that has already been built in West Valley City is above expectations, Black said.

Supporters of the UTOPIA system in Centerville are delighted with the new turn of events.

"Originally, we were supposed to see about 50 percent of the system constructed under Phase II," said Blaine Lutz, Centerville's assistant city manager. "If this new funding source comes through that it looks like we'll see the entire system built here all at once."

UTOPIA, short for the Utah Telecommunications Open Infrastructure Agency, was born in 2002 amid a sense of frustration by community leaders that the state's leading private telecom providers were not moving fast enough to bring the benefits of high-speed broadband services to their cities. At that time, 18 Utah municipalities organized under the UTOPIA banner to explore construction of a fiber-optic network that would serve all the homes and business within their cities.

Eventually, 11 communities stepped forward to financially support the development of the system by pledging city money, if necessary, to partially back the millions in bonds that would be needed to finance construction of the network.

Black noted that construction of the entire network was expected to take three to four years. "We're now one-and-a-half years into it."

soberbeck@sltrib.com