High placed sources, speaking on condition of anonymity, have confirmed that Veracity has pulled out of the merger with Broadweave and that Sorenson Capital may have withdrawn financial backing as a result. The 60-day delay cited by Broadweave in the papers is rumored to be buying time to find new backers. The loss of Veracity combined with the iProvo NOC employees who have left means that video experience is almost non-existent and staff resources will be stretched dangerously thin. This may account for anonymous commenters who have reported issues reaching customer service over the last several days. When asked about these details, Provo City employees involved in the deal were unaware of the failure of the merger.
This puts Provo in a terrible situation. Broadweave purchased Mstar's customer list using the debt they were to assume from the city. If the purchase fails and they no longer have that debt, they may find themselves in a sticky sitation, having a customer list that they didn't really pay for. Veracity also has a year and a half left on their contract and has no intention of selling their customer list to Broadweave at this point.
Provo is also looking at a greatly decreased sell price since the customer base has been thrashed and they have proven so eager and willing to sell. We're also left with a lot of unanswered questions. If Broadweave has to pull out of the deal, will Mstar resume operations and take back their customers? Will Broadweave continue to provide services to the Nuvont customers they bought? More importantly, can the network rebound after throwing the existing providers under the bus?
I submit that it can, but it requires one thing: join UTOPIA. In addition to getting back Mstar, they would add XMission and up to 17 new providers. Rumor has it that 8, not 4 as previously reported, are within months or weeks of offering services on the network. One of the key points that both Franklin Court and CCG made was that adding new providers was critical to the success of the network. Provo could attempt to find service providers on its own, but its trashed reputation would impede negotiations even starting. Joining UTOPIA would immediately bring on new providers and regain those 4 lost NOC employees. (C'mon, who didn't guess that the iProvo NOC employees had moved to UTOPIA?)
I honestly expected that this deal would fail, but certainly not before the ink dried on the paper. The spectacular nature of this collapse could prove very damaging to Mayor Billings and Kevin Garlick, Energy Director for Provo. The Mayor negotiated this deal and Garlick was instrumental in pushing it. The City Council could also see some serious problems for members who voted to approve the deal. All three who voted against it cited feeling rushed and it appears that their hesitancy was well-founded.