Veracity and Broadweave merger is off

PROVO — Veracity Communications won't be merging with Broadweave Networks, but it intends to stay on the iProvo network as a service provider.

And some fear that will plunge the system back into the bifurcated model that caused profuse financial bleeding.

Provo Mayor Lewis K. Billings said Broadweave has the same obligations to Veracity as iProvo did. That means, he said, Broadweave will remain a wholesale provider of connectivity for retail providers like Veracity.

"They will take over the role we play," Billings said.

Although Veracity's decision to remain independent changes the dynamics of the network's future, it does not affect the city's deal with Broadweave, he said.

"Veracity is a good player," he said. "They bring value whether they bring it as a retail provider or as a part of Broadweave."

Veracity President Drew Peterson said the merger agreement the company had with Broadweave was scheduled to close June 30 with the closing of the sales agreement between Provo and Broadweave.

"The deal was supposed to close on the 30th and it didn't," he said.

From an operational and financial standpoint, Peterson said, Veracity's board of directors decided to opt out of the merger.

"We felt that the timing at this point is to focus on continuing on the path that we have been going rather than to wait 60 more days," he said.

Veracity plans to continue servicing its commercial customers on iProvo. He also said they wish Broadweave the best in their future endeavors, and the two entities will continue their working relationship.

Peterson said Veracity's departure from the merger agreement shouldn't affect the final sale of iProvo to Broadweave because the merger was not included as a part of that anticipated transaction.

Broadweave CEO Steve Christensen also said in a prepared statement that the purchase of Veracity is not an integral component in the purchase of the network, and Broadweave looks forward to working with Veracity on iProvo's commercial customers.

City Councilman George Stewart said he's disappointed the merger didn't pan out, because the move was supposed to create a single entity that would manage the network and provide services.

"I feel that having a single provider ... is the best," he said. "That's the retail model."