PROVO Broadweave Network representatives downplayed allegations their attempt to buy iProvo is an "inside job" Monday while fielding some tough questions from concerned residents.
Executives of Broadweave a South Jordan-based company that offered to buy the city's fiber optic telecommunications network for $40.6 million met with Provo residents at the Network Operation Center at 744 N. 300 West on Monday to answer their questions. Broadweave CEO Steve Christensen denied assertions that the deal with the city is an inside job.
"We got the same, exact (request for proposal) everyone else got," he said.
According to a copy of the RFP, the city sent out requests April 18, 2007, seeking "qualified companies to submit proposals to provide telecommunications services and business opportunities on the iProvo Network."
According to its response to the RFP, Broadweave a company that provides voice, video, data and other communication services responded to the RFP stating it was open to numerous proposals.
"Broadweave seeks to explore any and all business opportunities related to the iProvo network including, but not limited to, becoming a service provider," the response states. "Broadweave would welcome the opportunity to explore in-depth various opportunities, including ... offering network management services to full takeover of the maintenance and operation of the network."
The city and Broadweave then entered negotiations that eventually led to the agreement in which Broadweave would assume payments for the bonds taken out by the city to build the network. In exchange, Broadweave agreed to grant the city dark fiber for future projects, dedicated capacity on the system valued between $1.2 million and $2.2 million for $300,000 per year and guarantee up to 3 megabytes of bandwidth to every business and residence in Provo.
While many city officials have welcomed the deal, some outside city government don't think the transaction is completely on the level. Pete Ashdown, CEO of Internet service provider Xmission, said the public should be concerned because the process was carried out away from public scrutiny.
"This was done behind closed doors," he said.
Ashdown also called the validity of the RFP into question because it didn't specify bids to privatize the system.
Provo spokeswoman Helen Anderson said the language in the city's RFP was broad and not limited to any particular proposal. She also said Broadweave wasn't the only entity talking shop.
"The RFP led to some proposals to privatize the network," she said.
Jay Cobb, legal counsel for Broadweave, balked at the notion the company received special treatment, saying the city followed its due diligence with it as well as the other entities that made bids.
"Whoever they were talking with, they kept it secret," he said.
Broadweave executives fielded some other hardball questions from local residents. Jesse Harris, a software implementer, asked Christensen about Broadweave's efforts to buy OEN another fiber network, in Houston, saying he thinks Broadweave is spreading itself too thin.
Christensen said he couldn't comment specifically on that situation. "We're under a (nondisclosure agreement)," he said.
But Christensen did ask residents to give Broadweave the benefit of the doubt and wait for the dust to settle.
"The only time we venture into a new market is when it's financially compelling," he said.
Residents also asked what would become of current service providers MStar and Veracity, as well as what new services and package deals they could expect from Broadweave.
A letter from iProvo consultant Doug Dawson, of CCG Consulting, appeared to offer insight on what will happen to the service providers, stating "(Broadweave) wants to be the sole provider on the network." Harris said such a move would contradict the initial purpose of iProvo to provide competition among service providers.
But Christensen brushed aside the statement, saying he's never spoken with Dawson.
"He's just assuming," he said.
Christensen did say Broadweave intends to announce its plans for service providers on Thursday.
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