PROVO Two consultant reports released Thursday on iProvo outline blunt observations and a laundry list of recommendations to bring the fiber-optic network's finances back into the black.
Among recommendations, Doug Dawson of CCG Consulting and Scott Chandler of Franklin Court Partners suggested the city start billing its departments for the use of the system. Notably, Dawson also said iProvo's telecom employees need an attitude adjustment when it comes to dealing with retail providers MStar, Veracity and Nuvont Communications.
"Almost to a person, your staff seems to believe that the retailers aren't doing things the right way and they seem to resent them," he wrote. "This resentment carries forward into the relationship between your employees and the retailers."
Last year, the city hired the two consulting firms to analyze its fiber-optic telecommunications network, which provides Internet, phone and television/video services. Since its inception in 2004, iProvo hasn't lived up to growth expectations, and instead of being a cash cow as promised, it continues to drain city coffers. (See related chart on B2.)
According to Provo's comprehensive annual financial statements for the past five years, iProvo has cost the city about $7.5 million, which does not include the $39.5 million the city bonded to construct iProvo's backbone. City officials estimate the system will cost the city another $2 million by this year's end.
In his report, Dawson noted iProvo's telecom employees have a very poor working relationship with retail providers. Dawson said the telecom team needs to remember that in a wholesale model, they only have one customer the retailers, and the customer is always right.
"You need to find a way to get employees to realize that their job is simple," Dawson wrote. "To keep the retailers happy."
Dawson also said the city has not been charging city departments for use of the iProvo system, and that should change.
"Each ... city department can be considered to 'own' a part of the city-owned fiber network," Dawson wrote, "and should pick up a cost of the network so that the network is there for them in the future as they need it."
Roughly 10,000 customers occupy 25 percent of iProvo's existing network, Dawson said, and the long-term plan is to expand that network to 20,000, which leaves half the network available. With 15 percent reserved for engineering purposes, there is another 35 percent of the network available for use by the rest of the city.
Dawson then said the city could charge departments annual fees totaling about $2.9 million for the system.
In his report, Chandler complimented Provo on its telecommunication network. He said phone companies such as Qwest are struggling with the costs and complexity of upgrading their existing networks to be comparable to iProvo. But he said the city could utilize the system further by implementing new technologies, including an advanced metering infrastructure a system to measure, collect and analyze electric and water usage.
He said the AMI would save the city millions of dollars.
City Councilman George Stewart said the city has been contemplating three courses of action, including privatization, charge-backs to city departments for their use of the system or bringing on additional retail providers. He said he prefers privatization and is hesitant about applying charge-backs.
"When iProvo was sold to the council, the city departments were to be benefitted at no cost because the network would be profitable," he said.
Since profitability hasn't been the case, he said the only way he'd consider charge-backs to the city departments was if taxpayers helped out.
"It would take $2 million from various city departments to close the gap," he said. "That would necessitate a rate increase got to pay for it somehow."In a letter accompanying the draft consultant reports, Mayor Lewis Billings said the consultants will attend the telecom board meeting Monday at 1 p.m. in the Provo City Library to field questions from city staff.
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