Free UTOPIA!

Last night, Provo's municipal council heard presentations from Broadweave, Veracity, the energy board and the telcom board on the proposed sale to Broadweave. There was a bit of new information and a lot of council skepticism. I don't have a play-by-play so much as some random thoughts.

• Both the energy and telcom boards are eager to cut and run as fast as they can. Energy doesn't want to be forced to cross-subsidize from their own funds in the face of an increased need for additional power generation capacity. Telcom, it seems, is unconvinced that the city can effectively run the network and expressed frustration that their suggestions and feedback were rarely translated into action. While I can understand the position of the boards in terms of their own self-interests, I don't necessarily agree with them.
• MSTAR is seriously cheesed off about the lack of an open RFP and made some not-so-vague intimations that it planned to sue to stop the sale should it be approved. They also expressed a lot of frustration that their own proposal to lease the network as the wholesale operator was turned down despite having lined up financing sources to bring them current and provide a significantly larger chunk of surety. One of the reasons MSTAR was denied was concern over not maintaining the open nature of the network. Irony much?
• Broadweave plans to raise prices. Most triple-play and Internet customers can expect a $10-15/mo bump in pricing to maintain their current level of service. This is something I've previously suggested at the wholesale end to be passed on to the retail customer. The annual shortfall of $2M annually worked out to around $200 annually per subscriber, a difference that would have been easily made up for with a small bump in pricing. I don't get why Provo didn't seek to increase fees until the network was solvent, then ease up again later. I don't see how private ownership is the only way to make this happen.
• Broadweave plans to offer new tiers of service. Their PowerPoint showed off about 6 different Internet packages from 3M/512K for $20/mo to 60M/60M for a waller-busting $180/mo. Again, something I've been suggesting for months now, that there be a value tier for grandma to increase subscriber units and a power user tier for folks willing to pay for more bandwidth. Again, I don't see how Broadweave's plans are any different from any other smart network operator.
• Broadweave is buying the Eagle Broadband network in Houston. They plan to pay a scant $274K to pick up the fiber connected to 4000 homes. That might sound like a deal at under $65/household, but that's fiber only without franchise agreements, a NOC, transport rights and so forth. It's also a seriously distressed asset that left a bad taste in users' mouths after suddenly disappearing without notice. The existing customers will be hesitant to sign up for services after an experience like that and it will take a significant investment to make those assets useful again, most likely through expensive network expansion. Building a NOC with a phone switch and video head-end will easily run in excess of $3M.
• Both Comcast and Qwest have concerns about the fairness of this deal. Both companies submitted letters to the city council expressing concern that Broadweave could get more favorable tax and right-of-way treatments under this deal, though neither is in opposition to a sale.
• Broadweave is projecting that triple-play wholesale costs will drop from $43 to $15 per month. I don't know how this would even be possible. It's common knowledge that cable TV providers barely eke out a profit on television alone, a product that retails at $40+ per month. Anyone with more experience on transport costs care to chime in?
• Broadweave was spooked by a lot of what I uncovered. Steve Christensen dedicated a slide of his presentation to "addressing" many of the concerns and irregularities that I've brought up in various venues. He failed to refute their lack of business licenses (something I noted to the council during my public comments), downplayed the investment required for the network in Houston and didn't have much of a rebuttal beyond "gimme a break" on the HomeNet comparison. Christensen also tried to downplay the involvement of his father in Traverse Mountain while failing to note that at least one uncle, possibly two are also principles in the project.
• Members of the council are very skeptical of this deal. Steve Turley, Sherrie Hall Everett and Cynthia Clark hit hard with lots of questions and doubts about the terms of the agreement and the RFP process. Cynthia Dayton also said that she wouldn't consider it without a close look at Broadweave's financial statements even if it took an NDA to do so. Alarmingly, she has been requesting this information for weeks without any action. Cindy Richards seemed to agree with me that pursuing networks across 6 or more states means that the council should make sure that the financial backing is there. There's also a lot of concern at the pace this project is proceeding at with Mayor Billings trying to force this through on a tight timeline. My personal prediction is a 5-2 vote against the sale with George Stewart and Midge Johnson voting in favor.
• The RFP may have been made vague so that customers didn't get spooked and bolt. Both Kevin Garlick and Mayor Billings brought up the fiber network in Marietta, GA that sold for 30% of its initial price claiming this was because the project was advertised as being for sale. While I can see this point, it wouldn't have been an issue had a provision of the sale been to maintain an open network and honor contracts with the existing providers. Once the sale became public, many other interested parties came out of the woodwork with better terms. Too bad that the city is obligated to treat Broadweave's offer with exclusivity through September.

My takeaway is that this deal is that the council recognizes that Broadweave is getting in way over its head despite the planned acquisition of Veracity and doesn't feel confident extending long-term financing under the current proposed terms. Some folks are as skeptical as I am, others are more optimistic. With all I've seen and heard, it's obvious to me that Broadweave should stick to what it knows, greenfield developments and exclusive service areas.

There's going to be a large number of meetings on iProvo popping up over the next two weeks for you to ask questions and voice your concerns. Here's the schedule:

• Monday May 12 from 4-6PM: Open house at the iProvo Network Operations Center, 744 N. 300 West. Rumor has it representatives from Broadweave will also be there.
• Tuesday May 13 at 7AM: iProvo Review Committee Meeting, 351 W. Center St. They didn't allow public comment last time and may not feel a need to do so this time either, but they are highly informative.
• Tuesday May 13 at 5:30PM: Municipal Council Study Session on iProvo, 351 W. Center St. This meeting will likely accept public comment.
• Tuesday May 20 at 7PM: Municipal Council Meeting, 351 W. Center St. The council will likely take a vote on the impending sale to Broadweave.

I'll try to make as many of these meetings as I can to make sure the opposition is heard. Make sure you get friends and neighbors to show up to these and contact members of the council and the mayor to voice your opinion.

After more waffles than you'd see in an Eggo plant, Payson has decided that they need to rethink their vote on the new UTOPIA bonds after being the lone hold-out. The city council will meet Monday May 12 at 6PM to reconsider backing the new UTOPIA bonds, a move that's eerily reminiscent of their "no we aren't, yes we are" vote on joining in the first place. The meeting will be held at 439 W. Utah Ave. and it's unknown if additional public comment will be heard. For good measure, supporters in the area should do their best to show up anyway.

I 'll be there, though it's going to be back-to-back with the iProvo open house the same night so I could be a few minutes late.

h/t: Jens Dana from the DMN. Had he not said anything to me on the phone tonight, I might not have heard about it until I was on my way to Zion Nat'l Park for a well-deserved vacation.

Less than 2 hours ago, Brigham City voted in favor of the new UTOPIA bonds with Ruth Jensen casting the lone dissenting vote. They made their vote conditional upon approval by the remaining two pledging member cities, Orem and Murray, in a move similar to Centerville. With this vote, UTOPIA moves one step closer to securing the new financing and being able to move forward with its plans to continue construction in the RUS cities.

The title pretty much says it all. Instead of a meeting closed to public comment, the Centerville City Council will accept additional public comment during tonight's meeting. If you're able to make it and speak in favor of UTOPIA, please do so!

I've received updated meeting times for the rescheduled UTOPIA meetings as follows:

• Brigham City: Thursday May 1 at 7PM
• Centerville: Tuesday April 29 at 7PM
• Murray: Monday May 5 at 6:30PM
• Orem: Friday May 2 at 9AM
• Payson: No re-vote

The addresses should be the same as the prior meetings and can be located on the sidebar. Payson has decided to not reconsider approving the new bonds for UTOPIA and will likely start paying from its pledges on the original bond arrangement. All other hearings will not be accepting any further public comment since they've already had significant public input. I'd encourage you to attempt to make as many of these meetings as you can and take the time to write to city council members.

I've just gotten word that the Woods Cross City Council will be discussing UTOPIA membership once again at their next meeting tomorrow, Tuesday March 18th at 6:30PM. The City Council has been waiting for announcements concerning UTOPIA's new model before deciding on any action and hasn't heard anything from them since they took the issue up in late 2007. I'd encourage supporters of UTOPIA in Woods Cross to be at the meeting to provide input and see what happens.

(h/t: Tyler Shaw for forwarding the agenda to me) 

An employee of UEN, Utah's education television network, is working to try and put together a pitch for KUER's UtahNOW public affairs program to talk about UTOPIA and has asked for our help on putting it together. Cruise on over to the open wiki article he's started to help flesh out the arguments so we can get some increased media exposure for the project. It's a bit of a harder sell to the programming directors since UTOPIA is a local solution to a national problem, but I'm sure some of you can contribute something to it.

UPDATE: The point is to sell them on it being a worthwhile story, not necessarily on the merits or demerits of the project.

And speaking of wikis, John Havey has been doing a great job at fleshing out WikTOPIA, our own wiki for tracking information on UTOPIA. If you've already registered an account, it's been approved and you can start adding to it at any time. The more of us that work on it, the better. 

I was recently contacted by someone from Sandy who's planning on getting a group of friends and neighbors together to have Sandy to reconsider UTOPIA membership. They'll be taking advantage of the public comments period at the City Council meeting on Tuesday January 8 at 7PM. If you're interested in meeting other UTOPIA supporters and getting the project moving in Sandy, I highly recommend you go to this meeting. (I'd normally be there myself, but work has me going to Winnipeg this week.)

The event on Monday turned out to be a public meeting to discuss where iProvo is going and what it plans to do to shore up operations. The scuttlebutt (that every single paper missed) is that Mayor Billings setup the meeting to try and sway the city council in general and Councilman George Stewart in particular to give more iProvo money, either as subsidies or loans. Given the intent, the goal was to show what iProvo has learned and what it's currently doing to try and turn this one around financially.

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