Mayor calls iProvo sale a good deal

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  • Ticked
    May 13, 2008 7:16 a.m.

    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.

  • Safe to say...
    May 8, 2008 8:27 a.m.

    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.

  • been there, done that
    May 7, 2008 11:40 p.m.

    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.

  • revi
    May 7, 2008 6:36 p.m.

    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.

  • fr1nk
    May 7, 2008 4:13 p.m.

    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.

  • Broadweave is very small
    May 7, 2008 2:23 p.m.

    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...

  • Amazed at Billings!
    May 7, 2008 1:34 p.m.

    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?

  • Who is Broadweave?
    May 7, 2008 12:19 p.m.

    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.

  • Out of the technology business?
    May 7, 2008 12:11 p.m.

    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.

  • They did the right thing
    May 7, 2008 11:43 a.m.

    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.

  • Ticked
    May 7, 2008 11:32 a.m.

    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.

  • Broadweave
    May 7, 2008 10:43 a.m.

    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?

  • littlebroadweave
    May 7, 2008 9:35 a.m.

    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.

  • Provoite
    May 7, 2008 9:13 a.m.

    Ashdown is a sore loser. His conflict of interest makes him a poor critic.

  • Jesse Harris
    May 7, 2008 8:51 a.m.

    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.

  • mstar customer...
    May 7, 2008 8:47 a.m.

    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.

  • to mstar customer
    May 7, 2008 8:34 a.m.

    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.

  • badfiberbeaver
    May 7, 2008 8:25 a.m.

    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

  • drjonessays
    May 7, 2008 8:21 a.m.

    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.

  • iProvo customer
    May 7, 2008 8:19 a.m.

    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)

  • S Miller
    May 7, 2008 8:13 a.m.

    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.

  • Re: Fiber and Monopoly
    May 7, 2008 8:10 a.m.

    "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.

  • Sammy
    May 7, 2008 8:02 a.m.

    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?

  • mstar customer
    May 7, 2008 7:17 a.m.

    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.

  • Fiber
    May 7, 2008 7:10 a.m.

    No other technology can compare to fiber. There is now only one company who can provide that service in Provo.

  • Monopoly?
    May 7, 2008 5:57 a.m.

    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.

  • Its about time
    May 7, 2008 5:44 a.m.

    What? No mention about Billings goint to West Jordan with Broadweave Networks?