Here’s why Utah Gov. Spencer Cox’s family business has become an internet powerhouse

The years since Spencer Cox began his rise from rookie lawmaker to Utah governor have been good for CentraCom, the telecommunications company founded by his family.

The Fairview-based firm has more than doubled the size of its high-speed network across the state in that time, from roughly 900 miles of fiber optic lines in 2013 to more than 2,400 miles today — giving it what is now one of Utah’s largest broadband footprints.

With aggressive strategies for upgrading its equipment, acquiring smaller networks and connecting with other carriers, CentraCom has also expanded to provide business and home customers with telephone, high-speed internet and cable TV services in key new markets, such as Salt Lake City, Ogden, Provo-Orem and Tooele.

That has helped grow CentraCom’s base of residential broadband customers alone from around 8,200 in 2013 — when Cox was appointed lieutenant governor — to more than 20,805 in 2022, according to the company’s annual reports.

CentraCom also delivers network services to a growing number of city and county governments, school districts and smaller public entities as well as the statewide Utah Education and Telehealth Network, earning it a stream of public dollars that has jumped from $2.4 million in 2014 to $3.7 million last year.

In the decade since Cox moved into the executive suite at the Utah Capitol, taxpayers have paid CentraCom and its subsidiaries, helmed by the governor’s father, a total of more than $32.6 million, according to state finance records.

CentraCom’s parent company, New York-based LICT Corp., received federal grants to expand the Utah firm’s reach as the pandemic intensified demand for broadband, and Utahns adapted to remote learning and working from home.

“It is no secret,” a top LICT executive wrote in 2023, “that there continues to be a surge in public funding and a hyperfocus throughout the industry to significantly expand access to high-speed broadband service.”

Cash, including government grants for broadband expansion, drawn from federal, state and local coffers continues to flow to the telecommunications company that Cox once oversaw as a high-ranking executive.

In a statement, the governor’s office said he has nothing to do with the business.

“Gov. Cox has no relationship with CentraCom or any of its affiliates and has had no relationship since the day he was sworn in as lieutenant governor in October 2013,” Cox spokesperson Jennifer Napier-Pearce wrote in an email.

Cox’s political rise and company ties

Cox’s political career began when he was appointed to fill a vacancy on the Fairview City Council in 2004. He became the city’s mayor in 2005 and won a seat on the Sanpete County Commission in 2008.

Cox had been in office as a first-term member of the Utah House for only 288 days in 2013, when then-Gov. Gary Herbert tapped him to replace Greg Bell as lieutenant governor.

In the private sector, before becoming a full-time denizen of Utah’s Capitol, Cox served as vice president of CentraCom, founded by his family in 1903 as Central Utah Telephone, Fairview’s first independent rural phone company.

LICT Corp. bought CentraCom in 2001, but Cox’s father, Eddie, has remained as president of the company. A cousin, I. Branch Cox, is CEO. Spencer Cox, who is also trained as a lawyer, resigned from the firm when he became lieutenant governor.

Neither Cox nor any member of his immediate family owns a stake in CentraCom or its affiliates, Napier-Pearce said, and the Cox family divested all ownership when the company was purchased in 2001.

A review of Cox’s conflict-of-interest filings shows he took no income from any entity outside of his state salary once he became lieutenant governor and governor.

The governor has received campaign contributions from several LICT Corp. executives, including its CEO and chairman, Mario Gabelli, and then-COO James DaBramo. Cox’s spokesperson explained that there was no connection between his father’s position at CentraCom and those donations.

“While CentraCom has never donated to Gov. Cox, several people who worked with him graciously donated,” Napier-Pearce said. “Those donations were never directly solicited and were pleasant surprises to the governor.”

Tracking CentraCom’s growth

Executives with CentraCom, responding to a series of questions from The Salt Lake Tribune, disputed any connection between the company’s growth and access to government contracts and Cox’s own political rise.

“CentraCom participated previously to 2014,” the company said, “and continues to participate annually, as a long-established and respected telecommunications provider to open public competitive bidding procurements sought by those public agencies.”

Company officials added that they’re unaware of any complaints or protests from other companies that participated in the open bidding process, which is subject to rigorous scrutiny.

As CentraCom’s network has expanded, the roster of small local governments, health agencies, school districts and rural service areas in Utah that contract with it for network access has ballooned from 32 in 2014 to 63 last year, according to records on the state’s Transparent Utah website, maintained by the state auditor.

In dollar terms, a sizable share of that government money going to CentraCom comes from the University of Utah. In fiscal 2014, the U. made two payments to Central Utah Telephone and Central Telcom Services, a pair of CentraCom’s subsidiaries, for $1.49 million.

In fiscal 2023, the U. paid those two companies $2.66 million. Payments from the school to CentraCom companies total more than $21 million over the past decade.

Most of those payments were made by the U. on behalf of the Utah Education and Telehealth Network and the U.’s hospital system, to which CentraCom provides broadband internet service.

CentraCom’s network covers much of the central, northern and western portions of the state, including many hard-to-reach rural areas, which UETN contracts to use as an administrative branch of the U.

UETN, according to its website, “provides critical broadband infrastructure and services to education, health care and broadcast sites” around the state.

Spencer Jenkins, UETN’s executive director and CEO, said via email that CentraCom first signed a service contract with CentraCom subsidiary Central Utah Telephone in 2003.

The firm, Jenkins wrote, is “one of more than a dozen internet providers from which UETN receives and manages these network services for schools, libraries, universities and many telehealth locations throughout the state.”

UETN submits its network service contracts to a formal bidding process yearly in compliance with state procurement laws and rules, Jenkins said. “The formal competitive bid process is fair and open, allowing UETN to select the most cost-effective provider based on its bid evaluation factors.”

Other government funding sources

CentraCom is one of several companies receiving funding through the Universal Service Fund, a surcharge on cellular telephone bills established in the 1990s to help provide telephone service for rural customers.

The Utah Public Service Commission is responsible for distributing those funds, which subsidizes phone service for low-income residents and those in regions where phone service is more costly, as well as rural health care providers and schools and libraries.

“Companies submit their annual reports, which are then audited by the Department of Commerce,” Thad LeVar, Public Service Commission chair, said. “Based on those reports, the department makes recommendations for how those funds should be distributed.”

In 2022, CentraCom received $209,521 from the Utah Universal Service Fund. The next year, the Department of Commerce concluded the company did not qualify for UUSF funding, recommending its payments be reduced to zero.

For 2024, CentraCom is set to receive $42,836 in UUSF payments.

Even though UUSF funds are public money, the annual reports submitted by the companies to the Public Service Commission are kept confidential because they may contain information that could be used by competitors to gain an advantage.

An open records request for the annual reports submitted by CentraCom and Skyline Telecom submitted by The Tribune was declined.

More broadband expansion

In 2022, an arm of the Governor’s Office of Economic Opportunity known as the Utah Broadband Center awarded $839,708 in federal grants to a CentraCom subsidiary, CentraCom Interactive, aimed at widening broadband access in unserved and underserved rural and economically distressed areas.

The cash was part of $10 million given in grants to CentraCom and another rural telecom, Kamas-based All West Communications, as well as Box Elder County and two utility districts in rural Utah. That money came from the federal American Rescue Plan Act, passed in 2021 to assist homes and businesses affected by the COVID-19 pandemic.

Along with $279,903 in matching funds, CentraCom Interactive used the grant to connect a high-speed fiber network to 473 households in Millard County, according to GOEO.

LICT Corp. also drew on similar grants in 2022 from the U.S. Department of Agriculture and has applied for additional USDA funds, Stephen Moore, its vice president for finance, wrote in 2023.

Post-pandemic, many state officials view broadband access as increasingly integral to rural Utah’s vitality as well as GOEO’s efforts to boost economic development in those areas. Now a much bigger infusion of federal money for broadband is headed the state’s way.

The Utah Broadband Center is currently absorbing public input on its approach to doling out $317.4 million in competitive grants for network expansions and improvements to widen broadband access under the Broadband Equity, Access, and Deployment program. That’s part of the $1.2 trillion Infrastructure Investment and Jobs Act, passed in fall 2021.

The latest goal from the federal government on high-speed internet access, said Rebecca Dilg, director of GOEO’s Utah Broadband Center, “is 100% access. They’re calling it universal service. It’s a huge task.”

The center, according to Dilg, is refining maps for areas defined as “unserved” — with download speeds below 25 megabits per second and uploads below 3 Mbps — as well as those that are “underserved,” with downloads below 100 Mbps and uploads below 20 Mbps.

That inventory of areas in need and the state’s scoring criteria for awarding grants are subject to approval by the federal National Telecommunications and Information Administration, she said, which is expected in the coming months.

Dilg added the center expects to start receiving applications and allocating the $317.4 million in BEAD grants later this year.

CentraCom and other internet service providers in Utah are seen as likely to apply for those grants to extend their broadband networks into unserved and underserved areas, while ensuring they will keep internet access affordable for rural customers.

“We need them,” Dilg said of ISPs. “We can’t do it without them.”