Last night, Provo Mayor John Curtis gave an update on iProvo and the city’s continuing involvement with the network and it looks like the city finally has an executive who wants to face facts. The reality of iProvo (or more accurately, the network sold to Veracity) is that revenues still don’t cover bond payments and aren’t likely to do so for quite some time. Veracity has already told me as much and that the single-family home business, which is both difficult and slow to grow, is the only thing left. It’ll probably be a while before revenues can cover the bond, and the payments will have to be cross-subsidized. The question, though, is who will do it.
Veracity has already received a break on payments, a break that runs out in just a few months. I’m confident that they can and will (but more importantly, should) continue to cross-subsidize Provo operations from other divisions of the company. Mayor Curtis’ remarks, though, seem to indicate an expectation that the city generally will have to continue to pick up part of the bond payments. I wouldn’t have much of a problem with this if Provo were continuing to operate the network with a wholesale open-access model, but effectively subsidizing a private company gives me serious pause.
I believe that Veracity is a good company and that they’re not out to pull a fast one on anybody. That said, I wouldn’t blame them for negotiating whatever they can get from the city. It’s the same as Google: “don’t be evil” doesn’t mean you should give up your strong negotiating position out of the goodness of your heart. And right now, Veracity is holding all the cards.