Mayor calls iProvo sale a good deal

PROVO — The city's announcement that iProvo — the fiber optic network that has registered financial losses since its inception — will be sold for $40.6 million should not be interpreted as cut and run, Mayor Lewis Billings said Tuesday.

"This isn't about unloading it and walking away," he said.

News of the city-owned fiber optic network's pending sale to Broadweave Networks, a fiber optic service provider based in South Jordan, comes after numerous calls from a think tank, the Utah Taxpayers Association and other critics to sell the system. Several City Council members have also voiced their support of privatization, but Billings said that didn't factor into the city's decision to sell iProvo. The city has always been open to the private sector taking over, he said.

"If the private sector would step up and the private sector could step up, then city government should let them step up," Billings said.

Now is the time to pass it on, he said.

The city sent out requests for proposals April 2007 seeking qualified companies to offer options to provide telecommunication services and business opportunities on iProvo, and Broadweave appeared to be the pick of the litter, Billings said.

"If I were the pretty girl waiting to go to the prom, (Broadweave) would be the most popular guy in school," Billings said.

Steve Christensen, CEO of Broadweave, was equally complimentary to the iProvo network at a press conference Tuesday afternoon.

"It's an amazing accomplishment," he said of the system at the Network Operations Center on 744 N. 300 West.

The iProvo system, originally touted as a moneymaker, has cost the city $7.5 million since 2003, despite signing up 10,400 subscribers. It's on track to cost another $2 million this year. The city also initially bonded $39.5 million to construct the system, but, with interest, the total bond payment would have been around $64.3 million by 2025.

But the network has matured, Billings said. The iProvo system is said to be one of the largest municipally owned fiber-to-the-premises networks in the country, reaching all 36,000 residences and businesses within the city.

While the technology offers high speed and great reliability, Christensen said, the business model was hedged up by laws that prohibited the city from being the network operator and the service provider.

"There are inefficiencies with the model that the city could not solve," he said.

During the acquisition, Christensen said they will continue to maintain competitive pricing levels, and customers won't feel any heat as the city passes the torch to Broadweave.

"It's going to be a smooth transition for (customers)," he said. "We're gonna take an already great service and add to it."