PROVO — Stagnant subscription rates, financial shortfalls and the expected withdrawal of its only business partner are causing some fretting about the future of iProvo, Utah's first government-owned telecommunications system.

But Provo city administrators in charge of iProvo are optimistic that iProvo will overcome its slow start and say they are going as fast as they can just to keep up with the demand for services through the city's fiber-optic system.

One warning sign of potential trouble recently flashed when HomeNet, the telecommunications company that has the exclusive deal to provide services through the iProvo network, informed the city it will be withdrawing from the Provo market, according to Councilman Steve Turley.

Reasons for HomeNet's pending departure are not clear.

Turley questions the company's financial stability, which, in turn, could affect people who have signed up for iProvo's "triple-play" services — digital cable, telephone and broadband Internet access.

But Mary DeLaMare-Schaefer, a spokeswoman for iProvo, said HomeNet has received offers from other service providers to buy its share of iProvo.

When reached for comment, HomeNet Vice President Mike Devine said the company is not going out of business — but declined to make any additional comment.

The Utah Telecommunication Open Infrastructure Agency — UTOPIA — is keeping an eye on the status of iProvo.

"We're fellow travelers, so we're obviously interested in their experience," said Roger Black, UTOPIA's chief operating officer. However, he adds that the $340 million UTOPIA project, which plans to build a telecommunications system for 14 Utah cities, is so much larger than iProvo that a direct comparison is not possible.

"The service providers with whom we are dealing are in a different situation that HomeNet," Black said. "They have a much bigger population to serve."

Black said UTOPIA is keeping contact with iProvo, but the outcome of the city's investment will have no impact on his company's plans.

Turley said HomeNet's imminent departure and discouraging revenue figures from iProvo's first full year of operation raise a number of concerns.

"There are some signs that this needs an awful lot more tender loving care," Turley said.

Turley said the biggest problem facing the project is a lower-than-expected subscription rate. As a result, Provo's revenues are far lower than expected.

For the fiscal year that ended June 30, iProvo was expected to bring in slightly more than $1.4 million. Nearly half of that — $683,000 — was to come from projected transport and service-switch fees. These fees are an established percentage of money Provo collects from service providers for each subscription they sell.