Google is botching iProvo, but will anyone investigate?

Google_fiber_logoA lot of people tend to turn off the critical thinking the minute Google comes to town with their Magic Fiber Elixir. I’ve already spilled a lot of digital ink on why I think it’s a bum deal, so I don’t need to rehash that here. What does need to be asked is if their slick online marketing campaigns and brand power are being used to avoid any level of accountability from the cities they make deals with. Right now, I think the answer is a resounding yes.

I’ve heard from multiple sources, some of them very close to Google Fiber, that take rates in Provo are not only well below Google’s expectations but below what Veracity had achieved while they still operated the network. The estimates I hear put take rates in the low-20s whereas Veracity had peaked around 30%. That giant plunge would be almost the entirely of the MDUs taking service from the last time those numbers were available. Part of this is to be expected. Google offered up a “free” tier of service for seven years to anyone who paid a pittance of a connection fee. In student-heavy Provo, it shouldn’t be much of a surprise that this ended up being a very, very popular route to getting online.

I know some people are saying “so what? The network is theirs to make flourish or fail.” That’s not quite true, though. If you look very carefully at the contracts, the city has the right of first refusal to get the network back for the $1 that Google paid to use it. The odds of the city not exercising that right are extremely low. Citizens are still paying for the bonds via a utility fee. There is an immense public interest at stake here should Google decide to pull out of the business any time after the end of their seven-year obligation. When the city handed the network over to Google, it was covering operating expenses and the bond. A 25% hit on subscribers means going right back to propping it up from city coffers.

When the city owned and managed the network, there were monthly reports on subscribers and revenues broken down into segments. Once Broadweave came in (and was later acquired by Veracity), most of the numbers were sealed up as company trade secrets and the only public data was if the payments were being made or not. Veracity was more open that Broadweave about take rates and network challenges, but there was still a lot of data left up to speculation.

Once Google came in, the meager data dried up. I have little confidence that either Google or Provo’s elected officials (looking at you, Mayor Curtis) would give anything resembling a direct answer if asked, assuming they gave any response at all. Even worse, it seems that journalists who proudly proclaim to be the public watchdog aren’t going to even ask those kinds of questions, uncritically reprinting each press release as gospel truth.

If you live, work, or have any personal interest in Provo, you should pushing for answers before the city inherits another financial mess.

Is the Macquarie deal really going to be this good? The rumor mill drops tantalizing hints

macquarie_logo_2638While nothing has yet been inked, I’m hearing a lot of rumors from multiple sources about the kinds of terms being discussed with Macquarie. While none of them will be out in the open until Macquarie finishes estimating the cost of network completion, this may give us some hints as to what to expect in the final product. Here’s what I’ve been hearing so far.

No installation fee. The install fee is rumored to be history. The network construction cost will cover getting the fiber to the side of the house. At that point, you’ve got maybe $200-300 in install costs to get it in to the house. Word is that Macquarie may work out the numbers to eat that cost to get people signed up.

Credit for any install fees already paid. You heard that right. If you paid the install fee up-front, that money will reportedly be applied towards the utility fee. Those who paid the install won’t be left swinging.

Construction completed in two years… or less. This one really surprises me. The plan is to complete the build-out of all pledging member cities VERY quickly. That kind of build speed would be incredible.

A free tier of service faster than Google. The utility fee is going to include a baseline level of service. The rumored speed is 6Mbps/2Mbps, better than Google’s current 5Mbps/1Mbps service.

A full build-out of the entire state. I’ve said it before, but it bears repeating. I keep on hearing that Macquarie considers UTOPIA to be getting their foot into the door in the US. Their reported intent is to wire every home, urban and rural, to gigabit fiber. Utah could quickly become the first all-gigabit state and have dozens of providers to choose from.

The cities maintain ownership. Yes, you heard right. When the 30-year deal is done, the cities still own UTOPIA. This provision would supposedly also apply to new cities that join up and maybe even the cooperative I’m working on (which would be the only option in unincorporated areas). That’s a pretty amazing deal.

Some of this sounds like it’s in “too good to be true” territory. Even if half of it pans out, I’ll be pretty impressed.

Rumor: Google Fiber is looking at SLC to block out a possible UTOPIA expansion

Sourced from Wikipedia

Still thinking that Google Fiber is your only gigabit option in SLC? Think again. I’ve heard from several reliable sources that Salt Lake City got on Google’s short list for a new round of expansion because of fears that UTOPIA would beat them to the punch (and possibly go into Provo as well). Macquarie is reportedly interested in expanding UTOPIA across the entire state and has particular interest in Salt Lake City since it’s the largest and most visible municipality. UTOPIA already has several fiber rings within the city it could use to fuel the expansion. If this rumor is true, it could mean that Utah would soon be not only the first gigabit state, but one with 17 separate companies competing for your business.

I’ve also heard rumors about details of the Macquarie deal that make it an even better deal that I possibly imagined. Once I get confirmation on some of the details, you’ll be the next to know.

Brace Yourselves: Gigabit is Coming

Earlier today, UTOPIA posted a cryptic message on Facebook and Twitter that they’d be announcing something on Monday September 16. Obviously, such a vague message has sent the speculation engine into overdrive, but a little birdie told me it has something to do with gigabit.

The likely possibility is that gigabit plans are likely to get a whole lot cheaper. Right now, they’re in the $300/mo price range. Google Fiber is planning to do gigabit for $70 in Provo. It’s possible that we may see a large price cut to make gigabit a much more appealing product in UTOPIA areas. I’d be surprised if it dropped to the same price as Google Fiber, but a price at or under $100/mo would be quite appealing.

Of course, we’ll have to wait until Monday to know for sure and get the details.

UTOPIA Adds New Service Providers; Another on the Way?

I popped on over to the UTOPIA website today and found that they’ve added two new service providers: 1Wire Communications and InfoWest. I don’t know a lot about 1Wire, but I do know that InfoWest is a well-regarded CLEC in the St. George area. Both companies will be providing voice and data services to business customers. 1Wire also offers a hosted PBX service similar to Telesphere. It would be nice, though, if more of these companies would open up to residential customers. It seems like it’s been a while since a new residential provider busted onto the scene.

That may change, however. I heard a rumor that Beehive Telephone, a rural ILEC in Utah and eastern Nevada, is considering joining UTOPIA to extend their reach. I remember that they’ve previously had some harsh words for UTOPIA, so this would be a major turnaround for them. Personally, I think it’s a smart move for any ILEC, rural or not, to use UTOPIA to extend their reach without having to invest in more network. You may remember that Emery Telecom was considering joining iProvo many moons ago but later backed out.

Where's Nuvont?

I used to have a contact at Nuvont, but he went unresponsive about a year ago leading me to think that maybe he’s no longer with the company. I figured the company went through some downsizing after the sale of their customers on iProvo, but this link that popped up in my Google Alerts doesn’t exactly bode well.

Now granted, this page doesn’t appear to be accessible from any link on the site, but its existence is disconcerting given how dreadfully quiet the company has been. Anyone from Nuvont want to chime in?

The Non-Story of UTOPIA and Lawsuits

Today’s Deseret News ran an article about UTOPIA’s preparation for some pending litigation, but it’s not really much in the way of news. We all know that UTOPIA and RUS aren’t on each other’s Christmas card lists and that UTOPIA incurred some significant expenses as a result of the incompetence of that federal agency. Negotiations with RUS broke down months ago and UTOPIA was still left holding the bag. At this point, they really don’t have much of a choice but to go after RUS in court since a settlement could not be reached and the damages are in the tens of millions.

UTOPIA obviously can’t confirm nor deny anything at this point, but it’s not hard to read between the lines. The question, though, is why this is being cast in some kind of sneaky and sinister light. Only an idiot would openly discuss pending litigation in a public meeting, much less with members of the press. It’s also not uncommon to have internal agency meetings that don’t require public notice. I would bet that every city, county, state agency, and interlocal agency has done the same.

That said, I can understand why someone would be heavily suspicious. UTOPIA has always struggled with putting information out for public scrutiny. It isn’t helped when the incumbent guns-for-hire Utah “Taxpayers” Association regularly takes what information is public and distorts or outright fabricates negative information about the project.

Basically, there’s nothing to see here that you haven’t already heard through the grapevine. When there’s real news, they’ll probably put out a press release.

Connected Lyfe, Hangman, and the UTOPIA Headend

There’s been a whirlwind of speculation since last night when a press release came out announcing that Connected Lyfe, one of UTOPIA’s newer providers, was being acquired by a then-unknown company called Hangman Productions. This wasn’t helped when an 8-K filing with the SEC came to light that showed Connected Lyfe as the purchaser of UTOPIA’s new video headend. It was pretty easy to assume the worst that the white-label video product would end and it might be a small step towards selling the network. After doing some digging and talking to both Todd Marriott and Chris Hogan at UTOPIA, it looks like that’s not the case at all. In fact, this is probably a really good thing all around.

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Rumor: Broadweave on UTOPIA?

I received word from a reliable source at a service provider that Broadweave may be considering joining UTOPIA. This information was passed along from a company that both of them do business with. According to this company, Broadweave has stepped up its outsourced call center operations in preparation for adding new customers on UTOPIA’s network.

UTOPIA and Broadweave have had an acrimonious working relationship in the past stemming from the entanglement between UTOPIA and iProvo regarding the head-end assets. This was no doubt hurt further by ex-CEO Steve Christensen’s forceful and demanding management style. The question is if the upending of upper management is enough to mend the relationship to the point where this rumor becomes fact.

If true, this would be a really good (and smart) move for Broadweave. They’ve hit a brick wall with adding customers on iProvo and are under a “do or die” deadline of February when the reserve runs out of cash. The rumors that they will soon be booted from Traverse Mountain also persist, though nothing new has developed. Getting access to the tens of thousands of UTOPIA homes passed and preserving some of their Traverse Mountain customers could give them the revenue needed to pay off the iProvo bonds and better leverage their head-end and NOC facilities.

Of course, we should also ask if Broadweave would be good for UTOPIA. Customer service complaints still persist and the company may not have the cash available to market to new customers unless EsNet makes additional investments. Broadweave has also failed to deliver video to Traverse Mountain despite the acquisition of a head-end, something I understand to be one of the main reasons for that development’s discontent. There’s also the matter of going from a geographically condense market to one spread over a 120-mile stretch, something that could drive their install costs up.

We should also wonder if Broadweave joining an open network like UTOPIA would signal that they’re ready to give the wholesale model another shot in Provo. Apparently closing the network wasn’t enough to staunch the flow of red ink as they claimed it would. Outside providers have money to spend on snapping up new accounts while Broadweave is charging around $600 for installs (and, I should note, not offering a discount on monthly service as a result). It’s entirely possible that a reciprocity agreement with UTOPIA providers to give them access to the network could result in higher overall revenues even at the expense of retail customers. Research from The Yankee Group suggests that an open provider model generates more revenue than adding lots of extra services, revenue that Broadweave needs.

So what do you think? If this happens, will it be good for Broadweave, UTOPIA, both, or neither?

Rumor: Broadweave to Be Booted From Traverse Mountain As Soon As This Week

A reliable source passed along a rumor that Broadweave’s troubles in Traverse Mountain are about to come to an end, but not in the way the company would like. Residents, after years of not getting video and being required to purchase phone service that many don’t use, are reportedly about to have the HOA sever the contract with Broadweave for data and voice services. Given the amount of griping I’ve seen on the Traverse Mountain Community forum, it’s not surprising to see this happen. I find it ironic that Broadweave cited high customer satisfaction in TM as a reason they were well-suited to operate iProvo.

Of particular interest is that the HOA is also rumored to be negotiating with several new service providers to replace Broadweave, including UTOPIA. If UTOPIA is being considered and ultimately wins the contract, residents would get immediate competition and triple-play services. (Side note: the administrator of the TM forum is apparently a UTOPIA employee who left iProvo.) It’s anyone’s guess as to if the rumor is true or not, but it makes sense given UTOPIA’s relationships with existing service providers and backbone proximity to the community.