American Fork, which has been operating its own independent municipal broadband service since 2002, has agreed to lease and sell portions of its beleaugered AFConnect service to PacketFront Inc. The city will retain ownership of the fiber network but will place operations in the hands of the Swedish company with stipulations that they maintain the contracts with current vendors. It already sold a portion of the fiber capacity to UTOPIA back in December.
What does this mean for American Fork residents? PacketFront plans to drop $8M on upgrading the network to support phone and TV service, something the city couldn't find the funding to do. As opposed to sell off the network entirely, the city council chose to make a deal that lets them keep a vested interest in the network without having to shell out for the expensive upgrades.
This is an important lesson for cities who want to strike it out on their own. By opting out of UTOPIA, American Fork shrugged off the benefits of pooled risk and got stuck in a situation where they needed significant capital improvements to make the system profitable, but because it wasn't profitable, they didn't have the capital. It wasn't very forward thinking of the city to not roll out "triple play" service and now they have to pay the price for it.
