Broadweave buys out iProvo providers
Broadweave, the company that plans to buy the city's fiber-optic telecommunications network for $40.6 million, announced this morning they've reached separate agreements with Mstar Metro and Nuvont Communication to acquire and service the two companies' Provo-based customers.
Broadweave will also acquire Veracity Communications in a cash and stock transaction. Under the terms of the agreement, Broadweave and Veracity will merge operations and combine companies. Two of Veracity's owners will join the executive ranks at Broadweave. Kevin Mayberry will become a member of Broadweave's board of directors and Veracity President Drew Peterson will become Broadweave chief of sales officer.
Mstar will continue to provide services on UTOPIA, Broadweave CEO Steve Christensen said. Nuvont CEO Brandon Grover will become a long-term customer of Broadweave when he launches Viapath, a new company selling VoIP services across the country.
Christensen said they came across Veracity, which provides voice and data services over the iProvo and Qwest, and they were impressed with the company's business model, but the wholesale model iProvo is based on wasn't benefiting them or anyone else in the network.
Veracity is one of the only service providers on the iProvo network that was turning a positive cash flow while Provo's fiber optic network struggled. Initially, Veracity executives Drew Peterson and Kevin Mayberry hoped to continue to be providers on the iProvo network, but said they were surprised when Broadweave offered to integrate operations with them.
"Sometimes, when you're not looking, the best opportunities present themselves," Peterson said.
Broadweave and Veracity executives declined to discuss the exact amount of the transaction in cash and stock. Christensen said there will be no layoffs in the transaction.
The city's history with service providers contracted to operate on iProvo has been rocky. Initially, Provo awarded the iProvo contract to HomeNet in July 2004, entrusting the $40 million public project to the company.
The deal gave HomeNet a period of exclusive access to the city's network of fiber-optic cables, granting the company a head-start on future companies expected to join the network and compete to win subscribers among city residents.
But those hopes soured when city officials' concerns over HomeNet's cash burn rate and business approach prompted them to cut ties with the company. HomeNet later filed for bankruptcy in Washington state in August 2005.
Recent comments
So what happens now? The city has acquired a long-term debt that...
Taxpayer | May 21, 2008 at 7:07 a.m.
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Dorothy | May 16, 2008 at 5:48 p.m.
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