Egg on Your Face: Rep. Frank and the UTA Play Loose With the Truth

The UTA recently released a report that UTOPIA will be calling on tax pledges this year. They cite an April statement from Murray Mayor Dan Snarr as their sole evidence. “At this point in time, no tax dollars have been used on this project. That may change, and we may need to help pay for some of the operations until there are enough customers to cover expenses.” Rep. Craig Frank was all too willing to quickly attach himself to this report as solid truth. The problem for the UTA (and by extension Rep. Frank), however, is that this is their only evidence, this statement has been repeated over and over since the refinancing (elected officials need to hedge their bets), and there’s no way it would be possible for UTOPIA to call on pledge dollars anytime this year.

The facts are simple. UTOPIA does not have a bond payment due from operating revenue until June 2010. There is absolutely no possible way that they can legally call on the sales tax pledges this year as the UTA asserts. Elected officials have been saying the same thing as Mayor Snarr for the last year to cover their own butts in a worst case scenario. The UTA is just trying to spread fear, uncertainty, and doubt without citing any new or relevant facts. It’s scaremongering, pure and simple.

If UTOPIA is really doing so poorly, how is it that they managed to sign on Integra Telecom, a company that measures its revenues in the hundreds of millions? Don’t you think a company of that caliber (which is likely going to bring in hundreds of thousands or millions in new revenue) would do their due diligence? And how is it that there’s no criticism for city-owner power or the horrendously botched sale of iProvo? Anyone? Anyone? Bueller? Seems like you folks like to reserve your criticism for easy targets.

Broadweave: No Cash for New Subs, Reserve Will Still Be Used for Bond Payments

The Daily Herald quotes Broadweave’s acting CEO David Moon as saying that Broadweave doesn’t have the capital to agressively sign up new customers right now. The money required to hook up hundreds of new customers each month just isn’t there and they plan to continue making bond payments from the reserve fund for the next eight to ten months. This move will end up spending over half of the reserve fund on the bond payments and, unless replenished, puts Provo in danger of picking up the pieces should Broadweave default on any payments when it runs out.

I’m having a tough time figuring out how Broadweave can’t make rent. The price increases of around $5 per month per service would have been enough to break even under city ownership, but Broadweave is also taking in all of the retail revenues. Where is all of the money going? And just how short is Broadweave on making those bond payments with its own money? I’m guessing very far out based on how long they intend to keep on using the reserve fund. Broadweave was given what should have been a slam-dunk sweetheart deal and they’ve somehow managed to bungle it all up. Good luck filling the CEO slot, guys.

Provo Gets Black Eye Over Sale of iProvo

The Society of Professional Journalists gave Provo an award, but not the kind they would want to get. The city received the 2009 Black Hole Award for repeatedly refusing to provide documents concerning the sale of iProvo to reporters from the Salt Lake Tribune. The failure to provide documents prevented newspapers and citizens from being able to review the terms of the sale prior to a vote by the city council. As I’ve repeatedly said, the failure to allow everyday citizens to review the full terms of the sale and the conditions under which it was negotiated combined with the rush for a quick vote was highly suspect. I suppose we all know that now with the multiple bond payments that have been made from a line of credit designed to protect the city should Broadweave fail.

SB205 Text Available, Would Ban RDA Funds for Telecom

The text of SB205 became available a few short moments ago and, as currently worded, would ban the use of RDA funds on telecommunications projects. (See lines 651-3.) The bill is a direct response to Centerville’s attempts to build out fiber optics infrastructure in the city to promote next-generation networks. Given Sen. Bramble’s significant power and influence, it is critically important that each of you contact your state senator and representative to ask that the provision either be stricken or amended to allow use of RDA funds for telecom provided that the infrastructure is open to any provider.

(Update 2/18/09 by Mike Taylor) – Here is the actual text of the bill, the link above shows the status.

Sen. Bramble Looking to Ban RDA Funds for Telecom

Senator Curt “Take My Check, Pizza Girl” Bramble is working on amending RDA laws in Utah to make sure that funds aren’t spent on any telecommunications projects. This is reportedly a direct reaction to Centerville’s proposed use of RDA funds to build fiber-optic infrastructure within the city, even though the proposal on the table allows any network to use it. Sen. Bramble has a well-deserved reputation for being prickly, so be prepared if you decide to communicate directly with him.

It’s very important that you write, call or speak with your senator or representative to make sure they know how you feel about this change. UTOPIA cities are working to make sure that the language will allow for it so long as it is vendor-neutral, but your voices are much, much louder.

Broadweave Misses Another Again Uses Reserve for Payment Despite Claiming Sharply Increased Revenues

The Daily Herald reported today that Broadweave failed yet again to make their payments to Provo from their operating revenues, dipping into the reserve fund for the third month in a row. This is despite claiming revenues that have increased 20% in the last 6 months and adding 400 more subscribers since last month. Some back of the napkin figures from a telecom professional I know shows that Broadweave may need to add as many as 5,000 new subscribers at an ARPU of nearly $65/mo in order to make that bond payment.

Because of the weather, new installs are challenging at best. Trenching the frozen ground isn’t much of an option right now which would force new installs to lay fiber across their lawn until the trench and conduit can be put in. Odds are that a lot of the new subscribers are incoming college kids for the winter semester, the ones that are predominantly Internet-only subscribers and disproportionately heavy users.

Since the only data we have is pre-Broadweave or heavily filtered, all we have to go on are best guesses. So far, though, it’s not looking too good. If they experience a sudden drop in subs in May-June, we’ll know for sure that the student population is making up a large proportion of the subscribers.

More Local Retransmission Fights: ABC 4 and CW 30 Picking Fights with Broadweave, Union Cable

If you’re already sick of the fight between DirecTV and KJZZ 14, you won’t much care for this. The station owners of ABC 4 and CW 30 have announced that their retransmission agreements with both Broadweave and Union Cable, a Wyoming cable company, will expire on January 31 and that no new agreement has been negotiated. Odds are that the stations, like so many others, are probably asking for a hefty increase in retransmission fees to make up for sagging ad revenue, a cost that either the service provider has to eat or pass on to you. The broadcaster is urging viewers to call both companies to “encourage” them to sign new agreements.

Personally, I think it’s kind of silly for stations to be picking these fights. Viewers still signed up for satellite before they carried local channels and just used an over-the-air antenna to pick them up. Most viewers now also have the option of using their high-speed Internet connection to catch up on their favorite shows, usually with fewer (or no) commercials. Most of these fights, however, end up in service provider capitulation and higher bills for all of us. I hope Broadweave and Union Cable have their best negotiators on this one.

Qwest Threatens New UTOPIA Lawsuit, Wants to Block Centerville RDA Funds

Qwest’s business model should be “If you can’t beat ’em, sue ’em.” The Davis County Clipper reports that America’s least competent incumbent is threatening Centerville with a lawsuit if they decide to move forward with their plan to use RDA funds to build out UTOPIA. Qwest’s accusations are, natually, light on specifics and big on puffery. Maybe Qwest should take some cues from Comcast and try competing instead of litigating its way to success.

Broadweave Fails to Make November Payment

The Salt Lake Tribune reports that Broadweave has failed to make its November payment to Provo City, instead having to rely on the security deposit. CEO Steve “we’re meeting our financial goals” Christensen and Mayor Billings both tried to gloss over the missed payment while Steve Turley, predictably, has called it bad news. Of course, if Broadweave is unable to bill their customers, that might account for coming up short. This will most certainly be a major issue during Provo’s upcoming municipal elections.

Rumor Confirmed? Subscriber Says That Broadweave Isn't Billing

One of the allegations from the Broadweave insider is that they don’t know who their customers are until they call in for support. A commenter recent confirmed this saying that they had been installed in August but have yet to receive a bill for any service and says that a neighbor is in the same boat. The question, of course, is if Broadweave can back-bill these customers successfully or not. It’s the customer’s responsibility to notify a company if they aren’t billed for services rendered, but good luck trying to keep the customers happy when you do it.

Anyone else getting service from Broadweave without being billed? Sound off in the comments.