iProvo, Broadweave nearly close deal

PROVO — Late into Monday night, city officials scrambled to bring the city's municipally owned telecommunications venture to a close.

Mayor Lewis Billings and Broadweave officials were slated to sign contracts Monday to officially turn iProvo — which provides citywide phone, Internet and video services — over to South Jordan-based Broadweave Networks. But as of print time Monday night, Provo spokeswoman Helen Anderson said they're still working out the details.

"We're moving forward and we're trying to get it all done," she said.

Broadweave representatives did not return multiple requests for comment Monday. But a message on their Web site, anticipating the closing of the sale, welcomed iProvo customers to their system, stating "you can expect Broadweave's highest commitment to service satisfaction and prompt service."

Under the terms of the agreement, the city would receive a $40.6 million payment for the network by taking out a loan. Broadweave will then make monthly payments of $277,000 for the next 19 years to pay off Provo's bonds, plus interest, for a total of about $63.2 million.

Provo would also pay Broadweave $300,000 annually for dedicated capacity on the system to connect government agencies such as city, school and county facilities — a service valued around $1.5 million to $2.5 million.

City Councilman Steve Turley said he had mixed emotions Monday. On one hand, he was glad someone was taking iProvo off the public's shoulders. But he said he thinks the public shouldn't have had to carry the burden in the first place.

"Time has proven that Provo should not have dabbled in that business," he said. "I wish we would have never been there."

Since the city launched the first line of its venture into the municipally owned telecommunications network, the project registered sluggish subscriber growth and consistent financial losses. Initially, the city expected to have 10,000 subscribers — the financial break-even point — on iProvo by January 2004, but that mark was later pushed back to August 2007. Later, city officials said the system would need a take rate of 16,000 to 18,000, more than 50 percent of the city's residences, to break even.