Do or Die: iProvo May Be Cut Off By the City Council

According to a source familiar with Provo politics, the city council will not extend any further funding to iProvo from this year's budget to cover bond payments. The city's fiber optic network has been experiencing steady losses as revenues have failed to completely cover the bond payments. When combined with the failure to fill up to 4 high-level management positions within the agency and declining sales tax revenue growth as the economy cools down, the city council sees further investments in the network as a losing proposition.

When combined with some recent news articles (see the Trib and DMN), the picture becomes clear: leadership's priority is to charge city agencies enough for the services provided to them to cover up any loans not granted by the city council. While it's obvious and clear that any services rendered to the city should be paid for, it certainly can't be enough to cover the kinds of shortfalls that iProvo has been experiencing. With the city council finalizing the budget numbers in June, it will be critical to know what direction the project plans to head. The oft-delayed reports from the consultants need to be completed sooner rather than later or we'll end up with a lot of poorly-made decisions regarding the future of iProvo.

One thing that's puzzling, however, is what exactly the city council thinks will happen should iProvo default on the bond payments. After all, this bond was guaranteed with city tax money and letting it default would be a credit rating disaster for the city. It sounds like a lot of posturing with no real substance. As much as the city council may be losing patience with the red ink, they certainly can't opt to stop paying the bills. They should be focusing on how to turn things around and make the best of the situation.

As I've stated previously, iProvo's long-term success depends on having as many telecommunications providers as possible competing on the network. Many current and former users have expressed frustration and anger with MSTAR and Nuvont/Veracity over shoddy service and frequent outages and would be more likely to give the network another shot if more options were open to them. While there was a lot of talk about several new providers back in December, there's been exactly zero movement in getting those companies onto the network. With all those leadership posts sitting vacant, I have to wonder if and when iProvo will get it together.

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4 Responses to Do or Die: iProvo May Be Cut Off By the City Council

  1. Andrea says:

    If city departments are going to be billed, they should be billed accurately.

    – Billing should be based NOT on iProvo’s cost to provide the service but on the cost that the city department would have to pay to provide this service themselves or through another city department or through a private provider.

    – if iProvo is providing a “service” that the city department would otherwise not purchase with its own budget, then the cost billed to the city department should be zero.

  2. Jesse says:

    For once, Andrea, we agree. It doesn’t do any good to convert the loans from the city council into “unloans” by charging inflated rates. While billing city departments appropriately is a good component of the solution, I certainly object to it being the solution in and of itself.

  3. Rich says:

    I live in Brigham City. do you have any Idea how long it will be until residence have access to Utopia? Right not the only other provider for wireless internet besides qwest, is charging an arm and a leg for the install and over 50 per month for internet.



  4. Jesse says:

    My understanding, based on what I've heard, is that Brigham City's build-out will be completed sometime this fall.

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