Free UTOPIA!

We've all known that the situation at Mstar was dire, but who would have guessed it was this bad? Mstar is reportedly down to a single network engineer to handle all of their operations and technical support issues. The anonymous poster also claims that most of the customer service reps aren't trained to do any kind of basic troubleshooting, leaving that responsibility up to him to tackle. It sounds like the turmoil continues.

h/t: Dirk van der Woude

By a slim 4-3 margin, Provo's Municipal Council approved the sale of iProvo to Broadweave with Sherrie Hall Everett, Steve Turley and Cindy Clark voting against the deal. Now the ball is in Broadweave's court: perform or your name is mud. This puts Provo citizens in a tough bind. If Broadweave fails to meet its financial obligations (which I very much anticipate), the city and its residents get back a network with no providers and may have to pay to buy back the video head-end and any upgrades done. On the flip side, a lack of municipal ownership means citizens aren't as invested in the success of iProvo.

Best of luck to you Broadweave, but few of us regular Joes think you can do it.

(Read more from the Deseret News and Tribune.)

If you're going to inflate your company size, it's best not to leave evidence to the contrary. Broadweave claimed in a press release that the Traverse Mountain community encompasses over 8,000 homes, yet an interview between KSL Radio and Steve Christensen of Traverse Mountain shows the project to be more along the scale of 3,500 homes. This isn't the only instance either. Broadweave claimed before Provo's Municipal Council on Tuesday May 27 that the Sienna Hills area in Washington City would provide them access to over 20,000 residences, yet the entire utility easement encompasses only 740 acres. Unless the developer is looking at cramming more than 27 residences into each acre, the claim is simply absurd. Maybe they're already counting unpromised future contracts in that total. Didn't other companies already try that one?

Online talk radio show CouchCast had Steve Christensen on as a guest to discuss the sale of iProvo. Go ahead and give the show a listen.

A few observations:

• Steve Christensen said himself on the show that Broadweave has been around since 2003, yet this conflicts with his statements to the Provo Municipal Council and the data found on Broadweave's own website. I'm glad that he's finally telling the truth about Broadweave's age, but why lie in the first place when it can be easily debunked?
• Steve played the blame game regarding the phone problems again, saying that the network technology is the problem. (I can only assume he's blaming the portals.) However, he's also blamed the existing providers since they outsource their phone operations and don't own their own phone switches. Which is it? I haven't heard from any UTOPIA customers that report the same voice issues that iProvo seems to have, so I'm not betting any money on the providers as the issue. If it is the portals, why not go with a cheaper TA instead of replacing the entire portal? Sure, it makes sense to switch to another portal for future installations, but it makes little sense to do a wholesale replacement of existing equipment for all customers.
• A central reason why telecommunications sucks so bad is that we've been pumping state and federal dollars into propping up incumbent phone carriers like Qwest while enforcing very few requirements that serve the public interest. A key point of municipal broadband is that if we're going to require public money to provide universal access to telecommunications, we should start demanding public ownership of the infrastructure as well. Steve Christensen correctly points out that public money is required to make it work, but incorrectly assumes that we have to continue this pattern of what Frank Staheli calls the "butt kiss" market to make it happen. It's corporate welfare at its best, insisting that a public good be subject entirely to private ownership but with plenty of public funds.

I've yet to find anything about this deal that doesn't instill a lack of trust and undermine confidence in Broadweave's ability to execute and straight-talk.

Broadweave announced their plan to fix the frequent issues with phone service on iProvo, pointing to deficiencies in the portals provided by World Wide Packets. Their message? An ultimatum to Ciena, the new parent company of World Wide Packets, to fix the firmware in 90 days or they'll start replacing the hardware. The reason? They claim the current portals don't properly support SIP.

Given that portals run about $300 a pop and Provo has 10,250 csutomers, that works up to just shy of $3.1M just on new portals. That doesn't even include the cost of labor to replace and troubleshoot. Seems a bit excessive when a $50 terminal adapter would probably fit the bill just as well. After all, I have yet to hear that anyone using Vonage is having issues with telephony over iProvo.

Broadweave seems to have some trouble spending lavishly on features that a company its size simply can't afford, like their supposed carrier-grade phone switches. Also remember that they plan to spend around $1.8M upgrading set-top boxes for MPEG-4 PLUS the costs for a new head-end to support the encoding. Can anyone else smell dot-com style crash-and-burn in the distance?

Broadweave has repeatedly hammered on the existing providers on iProvo for not owning their own phone-switching equipment. According to their statements, the breakdown in call quality and reliability comes from iProvo, the retailer and the outsourced voice provider all pointing fingers at each other. It's funny, then to hear that Broadweave currently outsources its video operations in Sienna Hills to a company called Avail Media. I wonder what happens when video problems pop up for the 20 or so customers down there?

This means that Broadweave truly has zero experience operating a video head-end or delivering a video product on their own. How will they do so for the 6,000 or so existing video customers on iProvo? The odds are certainly against them. 

Broadweave has repeatedly insisted that the only way for iProvo to work is if it becomes a closed network with one provider operating both the retail and wholesale operations. Perhaps, then, they can explain why it is that they agreed to "provide access to alternate service providers for a fee" as part of their utility easement in the Sienna Hills subdivision near Washington City? (See SITLA Meeting Minutes of October 6, 2005, pg. 7) If such an arrangement were not economically viable, wouldn't Broadweave have walked away? It's a tacit admission that open networks can work financially.

It's also telling that as a part of their easement in Washington County, Broadweave also wanted to be awarded automatic contracts to develop telecommunications systems throughout the School & Institutional Trust Lands Administration's future projects. The board was rightfully spooked by this implication and voted against granting such a restriction. (See SITLA Meeting Minutes of October 20, 2005, pg. 25)

In their report to the city, CCG noted that there were a significant number of HR issues leading to the deteriorating customer service situation at iProvo. They noted that "almost universally the telecom employees dislike or distrust the retailers" and observed that telecom employees were also at each others throats on a regular basis and to resolve it would "require management directive". Certainly neither retailers or their customers were served by this rivalry both within the NOC and towards retailers.

So how then is it possible that Broadweave plans to take these same people who caused this problem, the telecom employees, and force them to work both with each other and employees from a retailer, Veracity, without significant operational headaches? It seems to be that the old rivalries with each other and this retailer will continue to manifest themselves, likely moreso since, according to my sources, a majority of iProvo's employees are strongly opposed to this sale.

It's especially concerning since we hear a lot about the executive team and almost nothing about the management team; we have absolutely no idea how long Broadweave will be dysfunctional as it deals with these HR problems. During that time, customers and reputation will be lost, the latter of which takes significant time to regain. I do not think a company so young and small has the experience to successfully handle this kind of integration; even giants like HP and Sprint have failed at this task.

I received a response from the Utah Division of Corporations regarding the original filing for Broadweave Networks and Lucy, they've got some 'splaining to do. According to the original filing, the company did not file articles of incorporation until June 4, 2003. (See original document.) Their website, however, indicates that the company obtained their first contract in 1999. (Link to website, screenshot in case they change it.) How can a company that doesn't exist have functioning contracts?

It's amazing that Provo's brand of "due diligence" doesn't disclose these kinds of irregularities.

Broadweave announced today that they plan to go one step further than buying out the customer lists and acquire Veracity as well. Veracity has over 10,000 clients but only a handful are on UTOPIA or iProvo. Most of Veracity's customer base is in T-1 lines or DSL services as well as business voice communications. This means that Broadweave plans to grow overnight from 1100 to over 20,000 subscribers. I seriously doubt they can handle all of that growth.

It's worth noting that Nuvont, which is still a provider on UTOPIA, buys all of its services from Veracity. XMission also has a deal to buy VoIP services from Veracity. It will be interesting to see if Broadweave will remain on UTOPIA and continue these contracts for services or pull an AT&T on us.

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