Tue 13 May 2008
This morning, an inside source disclosed the fate of the existing iProvo retailers. According to this source, Broadweave plans to announce on Thursday that they will be buying out the customer lists from MSTAR, Veracity and Nuvont to become the sole retailer on the network. This move comes as MSTAR has been found to be about $950K in arrears to Provo for their use of the network, only $75K of which is expected to be paid prior to the transition. As part of the acquisition, Broadweave will assume the remainder as a debt due to it from MSTAR.
Between this debt load and their recent layoffs, there is serious concern that MSTAR could fold in the very near future leaving UTOPIA without a triple-play provider. This comes as Todd Marriott announced at the Payson City Council meeting that some new triple-play providers are on-deck to join the network and increase competitive choice, no doubt a result of his experience in the telecommunications field. Since the sale of iProvo to Broadweave looks likely to close and the deadline for sale in June 30, there's little time left to pick up the pieces if MSTAR's financial condition rapidly deteriorates.
May 13th, 2008 at 2:52 pm
If broadweave goes south and drops the network back on provo what are the chances that any retail providers would sign up to do services on iprovo again? I would think slim to nil?
Why isnt UTA against this sell, it greatly increases the risk to the provo tax payers. I thought that was UTA’s purpose is to reduce the risk of more/higher tax’s to utahs tax payers.
May 13th, 2008 at 4:41 pm
This doesn’t strike me as a big surprise. If I were a service provider, I wouldn’t like the idea of being in competition with my wholesale provider. I know this for Qwest and other phone companies, but that’s because they’re regulated all over the place as to what kind of wholesale services they must provide. Broadweave won’t be subject to such regulation, so they will be in a position to make business very difficult for any remaining retailers.
May 13th, 2008 at 6:12 pm
luminous: This wouldn’t be the first inconsistency of the UTA, though they have yet to state many other opinions since their initial reaction. I would hope they’d say “find another seller” after they take time to evaluate this deal.
May 14th, 2008 at 1:48 pm
luminous: I am certain that your comment was made tongue in cheek. For all its rhetoric, UTA does not care for or represent the interests of Provo City or the Provo taxpayer. It represents the interest of its business members, and more particularly those who have paid “supplemental dues” to have extra help on an issue. I’m sure you can guess which UTA members would benefit from iProvo’s failure and the cautionary tale that would be told to other communities contemplating taking on the telecommunication infrastructure challenge. If iProvo ends up back in Provo’s hands, and because of its dealings with previous providers cannot find anyone to ride its network again, UTA will have an even better tale to tell.
There’s another possibility that could actually be a win all the way around, except for the incumbents. Here’s a scenario that I think is a distict possibility: Broadweave defaults after a couple of years trying to make a go of it, and Provo gets the network back. With the current administration out of the way, Provo has a new attitude toward cooperation with its neighbors. Having righted its ship and demonstrated the validity of its business model, UTOPIA offers a merger with iProvo. Provo becomes a UTOPIA city, (which it would have been smart to have been way back when), Provo residents get access to a truly open network with multiple service providers, UTOPIA has an “overnight” increase in its available subscribers, and both UTOPIA and Provo benefit.
I sincerely hope that Broadweave can be successful, because in the end it’s better to have more choices than less, but as a former Provo resident recently said, there’s good, better, and best. My UTOPIA scenario seems to me to be best. Let’s hope.