The Daily Herald quotes Broadweave’s acting CEO David Moon as saying that Broadweave doesn’t have the capital to agressively sign up new customers right now. The money required to hook up hundreds of new customers each month just isn’t there and they plan to continue making bond payments from the reserve fund for the next eight to ten months. This move will end up spending over half of the reserve fund on the bond payments and, unless replenished, puts Provo in danger of picking up the pieces should Broadweave default on any payments when it runs out.
I’m having a tough time figuring out how Broadweave can’t make rent. The price increases of around $5 per month per service would have been enough to break even under city ownership, but Broadweave is also taking in all of the retail revenues. Where is all of the money going? And just how short is Broadweave on making those bond payments with its own money? I’m guessing very far out based on how long they intend to keep on using the reserve fund. Broadweave was given what should have been a slam-dunk sweetheart deal and they’ve somehow managed to bungle it all up. Good luck filling the CEO slot, guys.