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Mayor calls iProvo sale a good deal
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Its about time | 5:44 a.m. May 7, 2008
What? No mention about Billings goint to West Jordan with Broadweave Networks?
Monopoly? | 5:57 a.m. May 7, 2008
Ashdown must be dumbing down the term monopoly because this "monopoly"
will be competing against Qwest, Comcast, and wireless. Counting the
"monopoly" itself, that's four companies.
Fiber | 7:10 a.m. May 7, 2008
No other technology can compare to fiber. There is now only one company who can
provide that service in Provo.
Comments continue below
mstar customer | 7:17 a.m. May 7, 2008
I'm a current Mstar customer that takes advantage of the iProvo network.
We pay $40/mo for 15 mbs download and upload speeds (the upload is rarely that
fast, though, as i regularly check speedtest.net). Our telephone services are
completely Skype-based (we bought Skype handsets, so it's like have a
normal phone). What happens to my service? I thought this was an
infrastructure that different providers could take advantage of. Now, it's
going to be handed over to someone that, according to their website, offers 10
Mbps downloads and 1 Mbps uploads. I regularly get faster than that on my
'basic' service already (if I'd've lived in Orem, Mstar
would've given me 50 Mbps for the same price, but iProvo restricts what
speeds are allowed). So what do I do now? I'm going to lose my provider
and, on the same network, pay more for less. Thanks, Provo.
Sammy | 8:02 a.m. May 7, 2008
Provo got "worked" on that one. Nice job building it to do a back
door deal on the sale for the same amount. Just announce it's for sale to
the highest bidder and see what happens. Where's Bernie Ebbers when you
need him?
Re: Fiber and Monopoly | 8:10 a.m. May 7, 2008
"There is now only one company who can provide that service in
Provo."
Well, there was only one company before! iProvo was the only fiber optic network in the city, and it still is. In fact, the reason the city built iProvo is that private companies wouldn't do it. If this is a monopoly, then Qwest and Comcast deserve it. They should have hopped on board before, rather than fight agaisnt superior technology.
Well, there was only one company before! iProvo was the only fiber optic network in the city, and it still is. In fact, the reason the city built iProvo is that private companies wouldn't do it. If this is a monopoly, then Qwest and Comcast deserve it. They should have hopped on board before, rather than fight agaisnt superior technology.
S Miller | 8:13 a.m. May 7, 2008
If this is the first time Xmission has heard of the sale, this was not a public
sale. Why not? Are they trying to "cut and run" quickly and quietly,
to avoid further criticism of public money used badly. And here we go again. My
guess is Provo got far less than it might. Why didn't they open it up for
public bidding, getting the best price possible? They made a big mistake in
putting in the system at tax payer expense, and will not admit it. And now they
have sold it without competing bids to get the best price, a terrible mistake to
hide their first mistake.
iProvo customer | 8:19 a.m. May 7, 2008
The ONLY reason I have stayed with iProvo this long is the upload speed. If
Broadweave is going to change that model, I'm going right back to Comcast.
They had more reliable phones anyway.
I will be watching for the "announcements" in the coming weeks regarding the offering that Broadweave will be presenting to the good citizens of Provo.
The reason iProvo was built was to offer the citizens of Provo a choice. Now that Provo city Utilities has mismanaged this pig to the point that they have to sell it to a private company that will NOT offer a choice, I may have to rethink the whole fiber to the home issue. Why didn't this get sold to UTOPIA? They just refinianced...and they could have afforded it? At least by selling it to UTOPIA we would still have choices.
THIS IS A LOSE LOSE DEAL AND BILLINGS SHOULD BE RECALLED OVER THIS DEBACLE! (actually the only one that appears to win is Billings because the council will finally be off his back)
I will be watching for the "announcements" in the coming weeks regarding the offering that Broadweave will be presenting to the good citizens of Provo.
The reason iProvo was built was to offer the citizens of Provo a choice. Now that Provo city Utilities has mismanaged this pig to the point that they have to sell it to a private company that will NOT offer a choice, I may have to rethink the whole fiber to the home issue. Why didn't this get sold to UTOPIA? They just refinianced...and they could have afforded it? At least by selling it to UTOPIA we would still have choices.
THIS IS A LOSE LOSE DEAL AND BILLINGS SHOULD BE RECALLED OVER THIS DEBACLE! (actually the only one that appears to win is Billings because the council will finally be off his back)
drjonessays | 8:21 a.m. May 7, 2008
What was not announced is that this sale is financed by the owner (Provo City).
Provo gets to keep the bond as is. So far, every entity that has entered a
contractual relationship with Provo has at one point in time failed to meet
it's financial obligations to the city. Homenet, Atlantic Engineering
Group, Mstar, Veracity have all had their "low moments." Nuvont has
never has a contract with Provo City and therefore has never had to meet
it's financial obligations, because it never had any.
All this just means that when Broadweave fails to make payments to Provo, Provo is back in the telecom business.
All this just means that when Broadweave fails to make payments to Provo, Provo is back in the telecom business.
badfiberbeaver | 8:25 a.m. May 7, 2008
Does Broadweave know that they are buying bad fiber? There are miles of fiber
on the network that just quit working when it gets cold. Provo tried a band-aid
approach for the last couple of years to mitigate this. Poorly manufactured
fiber was poorly installed. Bad combination. Bonus phrase of the day: fiber
attenuation
to mstar customer | 8:34 a.m. May 7, 2008
as a network engineer the "desperation attempts" by mstar and any
other providers to give a googalbit connection to the web is unrealistic. Mstar
did all other service providers in the United States a major injustice by trying
to provide speeds that were so astronomically pointless, they thought people
would jump in their boat, obviously that didnt happen. There is a reason why
qwest and comcast are still actually "OPERATING", its because they are
realistic....as a network engineer who does this for a living and knows what the
equipment is capable of, I also know there are very basic business fundamentals
that citizens need to recognize and understand in this type of industry. 50 Megs
to the web is like giving you a Dodge Viber to climb the Timpanogos Mtn trail.
mstar customer... | 8:47 a.m. May 7, 2008
The speed tests might show very high speeds, both up and down. But, the reality
is that you only get 300k-1mb per second. It's very rare that you really
get to use 10mbp/s in real life.
Pete Ashdown is showing his liberal nature by all the whining he's doing. If he didn't understand the rfp, too bad for him. I doubt that xmission would have succeeded on iprovo, anyway. I certainly wouldn't have subscribed to it. I'm very glad that he's not the new owner of iprovo.
Pete Ashdown is showing his liberal nature by all the whining he's doing. If he didn't understand the rfp, too bad for him. I doubt that xmission would have succeeded on iprovo, anyway. I certainly wouldn't have subscribed to it. I'm very glad that he's not the new owner of iprovo.
Jesse Harris | 8:51 a.m. May 7, 2008
Good job, Mayor Billings. You lied to the residents of Provo for months while
the city continued to do nothing to fix the network. This gross mismanagement of
city assets to reach a pre-determined conclusion is shameful at best. Not only
will you abandon iProvo's guiding principle of creating a new competitive
platform for multiple telecommunications companies, you're also going to
sell the network for a lot less than was paid for it. Good job, mayor, for doing
what was politically expedient instead of what was right for the city. I can
only hope that you and the council will pay for it in 2009.
Provoite | 9:13 a.m. May 7, 2008
Ashdown is a sore loser. His conflict of interest makes him a poor critic.
littlebroadweave | 9:35 a.m. May 7, 2008
drjonessays,
Why would you doubt Broadweave's viability. They are a huge company with a strong history in telecommunications. Oh wait, no they're not.
They're actually smaller than any of the previous iProvo providers. They are not yet profitable. They only survive on venture capital money. They only have a handful of customers in north Lehi, and a tiny group in St. George. Sounds like Homenet, Mstar, Nuvont, (but worse).
Keep in mind, they aren't paying 40M, they're just agreeing to start paying the bond payments towards the 40M. When they fail, Provo will have to bail them out and take over the rest of the debt. This seems like a short sighted attempt by Billings to get re-elected.
Why would you doubt Broadweave's viability. They are a huge company with a strong history in telecommunications. Oh wait, no they're not.
They're actually smaller than any of the previous iProvo providers. They are not yet profitable. They only survive on venture capital money. They only have a handful of customers in north Lehi, and a tiny group in St. George. Sounds like Homenet, Mstar, Nuvont, (but worse).
Keep in mind, they aren't paying 40M, they're just agreeing to start paying the bond payments towards the 40M. When they fail, Provo will have to bail them out and take over the rest of the debt. This seems like a short sighted attempt by Billings to get re-elected.
Broadweave | 10:43 a.m. May 7, 2008
Let's see. I get to take over this business that borrowed money at
government rates, is finished with the buildout, and has over 10,000 customers.
I don't have to refinance in my own name. I just have to cover a $2M
annual shortfall until I can figure out how to make it profitable?
How long until those retailer contracts are up? 1 year? And then I can refuse to renew and get the customers for myself? Hmmm - total pricing power.
And if I screw up I didn't put any real skin in the game - the city has to pick up the pieces and keep paying the debt.
Nobody else knows about this deal, right? Any chance we can sign the papers before the press release?
How long until those retailer contracts are up? 1 year? And then I can refuse to renew and get the customers for myself? Hmmm - total pricing power.
And if I screw up I didn't put any real skin in the game - the city has to pick up the pieces and keep paying the debt.
Nobody else knows about this deal, right? Any chance we can sign the papers before the press release?
Ticked | 11:32 a.m. May 7, 2008
Another back door deal, negotiated in secret. Is this the only way Provo can do
business? What about public input? What about an open and fair bidding process.
This is just more stench. Go away Billings and Garlick. What about the several
million lost in subsidized operational budgets for iProvo. They lost over $10
million dollars for the city in addition to the $40 million still at risk. Now
they cannot even pay for a cost of living raise for their employees.
Talk about bad management! They should hide there head in shame.
Talk about bad management! They should hide there head in shame.
They did the right thing | 11:43 a.m. May 7, 2008
They did the right thing selling the business. We elect people to govern the
city, not to be on the Board of Directors of a technology company. It's a
whole different skill and interest set.
Government should not be running businesses on the side.
Government should not be running businesses on the side.
Out of the technology business? | 12:11 p.m. May 7, 2008
I'm sorry, but with this deal Provo isn't getting out of the
technology business. Provo is handing over the upside of a technology business
to private individuals, while keeping the downside for itself. In return it
doesn't even get a vote on the board of directors.
This is like selling my house to someone after I worked to fix it up by letting them pay on my mortgage. They can sell the house and keep the profit, or trash the house and walk away. Either way I'm screwed.
Why is Provo doing this? iProvo has been a political nightmare. The politicians just want the media to stop beating them up. Anything to stop the pain.
This is like selling my house to someone after I worked to fix it up by letting them pay on my mortgage. They can sell the house and keep the profit, or trash the house and walk away. Either way I'm screwed.
Why is Provo doing this? iProvo has been a political nightmare. The politicians just want the media to stop beating them up. Anything to stop the pain.
Who is Broadweave? | 12:19 p.m. May 7, 2008
I'm really curious to know how big Broadweave is. From what I can tell
it's not exactly a big player. Does this purchase double their customer
base or more? This sounds a lot like HomeNet to me.
Remember how great HomeNet was? They were an "established player", but iProvo was such a big deal for them that they moved headquarters to run it. Then they crashed and burned.
Of course, Broadweave has big money behind it. It's totally different. Never mind that the big money isn't putting up any cash for this deal. Big money knows how to jump at a no-risk opportunity.
If XMission wants to get in on the same terms, I'd give it to XMission. At least they're a truly established company. They actually make money.
Remember how great HomeNet was? They were an "established player", but iProvo was such a big deal for them that they moved headquarters to run it. Then they crashed and burned.
Of course, Broadweave has big money behind it. It's totally different. Never mind that the big money isn't putting up any cash for this deal. Big money knows how to jump at a no-risk opportunity.
If XMission wants to get in on the same terms, I'd give it to XMission. At least they're a truly established company. They actually make money.
Amazed at Billings! | 1:34 p.m. May 7, 2008
I can't believe that Provo's Mayor can act this way! First, he sneaks
out a deal behind closed doors without letting some major potential buyers know.
It makes you wonder if he got something under the table. Also, to claim that the
pressure from all sides to privatize didn't factor into the decision to
sell iProvo is just an outright lie! Billings resisted forever selling his
iProvo project but finally saw the light. I'd like to see the final number
on the loss of funds that Provo residents had to pay for this blunder! This
Mayor has been nothing but a disappointment to Provo. He does whatever he wants
and can't admit when he makes a mistake. Why does Provo continue to put up
with him?
Broadweave is very small | 2:23 p.m. May 7, 2008
Broadweave has a total of 5-7 employees, and this way more than doubles their
customer base. Probably close to a factor of 10 (I doubt they have more than
1000 current customers).
Good luck provo residents...
Good luck provo residents...
fr1nk | 4:13 p.m. May 7, 2008
I cant help but think that this back room deal is a big mistake. It couldnt have
happened to a more poorly run city unless that city was Sandy.
revi | 6:36 p.m. May 7, 2008
Well, now you see Lewis's greatest achievement becoming his worst failure.
Sad, but he could have stopped this long before it started. See, he understood
the assumptions that the business model and costs for I-provo were built upon.
The citizen's committee that worked on this did too--and it wasn't
based on a city providing a wholesale network to retail providers. They based
it on being able to be both wholesaler and retailer of the product. But the
state legislature caved in to Qwest and comcast and said no to cities retailing
product. But Lewis never bothered to take i-provo back to the citizens
committee, or explain to the council how the change in law would change the
finances. He was too emotionally invested to stop it. Then problems start
popping up right and left, the competitors (wisely) react by lowering prices,
and Lewis's great legacy becomes his albatross. He can't hang this
one on the Council or anyone else. It was all his ego.
been there, done that | 11:40 p.m. May 7, 2008
This is not the first, second, or even the third time that Lewis has
"partnered with the private sector" with disastrous results.
He was first of all, "emotionally invested" in getting an Olympic venue. The resulting deal gave Max Rabner control over a publically-owned, SLOC-built, recreation facility.
The "partnership" with US Steel at Ironton, and now ActionTarget, again funds public infrastructure for private gain.
Larry Mendenhall, of Million-Air, has a virtual monopoly on the city-owned airport.
Two different companies have attempted to run, and profit from, the municipal golf course.
Lewis keeps making these deals, and touts them as good for the city. But they are, in fact, a form of corporate welfare.
Lewis has to realize that these are bad ideas, IN PRINCIPLE. Government is not in business, it's in service. And if he must raise taxes to adequately fund public services, then so be it. These "deals" never work out.
He was first of all, "emotionally invested" in getting an Olympic venue. The resulting deal gave Max Rabner control over a publically-owned, SLOC-built, recreation facility.
The "partnership" with US Steel at Ironton, and now ActionTarget, again funds public infrastructure for private gain.
Larry Mendenhall, of Million-Air, has a virtual monopoly on the city-owned airport.
Two different companies have attempted to run, and profit from, the municipal golf course.
Lewis keeps making these deals, and touts them as good for the city. But they are, in fact, a form of corporate welfare.
Lewis has to realize that these are bad ideas, IN PRINCIPLE. Government is not in business, it's in service. And if he must raise taxes to adequately fund public services, then so be it. These "deals" never work out.
Safe to say... | 8:27 a.m. May 8, 2008
I think it's pretty safe to say that Lewis Billings job is on the line over
this debacle. I will be amazed if this guy gets re-elected next time around.
The good old boy network is alive and well in Provo. It's time for a change of the guard in Provo. The council could use a good cleansing too.
The good old boy network is alive and well in Provo. It's time for a change of the guard in Provo. The council could use a good cleansing too.
Ticked | 7:16 a.m. May 13, 2008
Now Billings is saying Broadweave is the most qualified of those who offered to
buy iProvo. How ridiculous is that. They have less than 1000 cutomers. They have
less than 30 video customers. Their customers are compelled to use them by HOAs.
They don't have any competitive experience. The word is that one of the
offers came from Dynamic Cities who operates the Utopia network. I guess the
mayor sees that as a lesser experience, but that is completely absurd. So on
goes the absurdity of Provo City leadership. Come on council. Reign this in
before it is too late.
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Jens Dana, Deseret News
Provo Mayor Lewis Billings, center, announces the city will sell iProvo to Broadweave Networks. Broadweave board member Fraser Bullock is at left; CEO Steve Christensen is at right.
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