Provo lashes iProvo critics

City says report is 'fatally flawed,' lacks objectivity

Published: Friday, Dec. 29 2006 10:02 a.m. MST

The city projected it would break even when it reached 10,000 subscribers, but subscriptions lagged after problems with original service provider HomeNet. The city projects current service providers Veracity and MStar will reach 10,000 subscribers by July, but the break-even point is now considered to be somewhere between 12,000 and 15,000 subscribers because fewer customers are buying "triple-play" packages — phone, Internet and video — than anticipated.

The City Council approved loans this year of $3.1 million from another city fund because, while the project is covering costs, it is unable to make its payments on the bonds.

"The project is on track, is growing and is now fully covering all of its operating costs and contributing significantly to its capital costs," the white paper said.

Titch called it a weak answer.

"This is essentially what they've said really for the past year and a half. It did get built on time, they do have subscriber numbers near what they wanted, but they still don't have the revenue numbers they need. Contributing significantly to capital costs? What does that mean? They don't say. They haven't answered with a lot of hard facts. They have not challenged the report's conclusion that they will have trouble covering costs as time goes by and the deficit will continue to widen."

The white paper provides a history of the iProvo project and much of the city's rationale in building it. It also provides a lengthy rebuttal of the Reason report's conclusions about price comparisons between iProvo providers Veracity and MStar and iProvo's competitors, Qwest and Comcast.

The two reports can be found at www.reason.org/ps353.pdf and www.provo.org/downloads/util/building_a_digital_community.pdf.

E-mail: twalch@desnews.com

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