iProvo Sale and RFP

Over a year ago, Provo City put out an RFP titled, “Request for Proposals for Partnership Opportunities with Telecommunication Service Providers on the iProvo Network”. This was a public invitation to companies like XMission to provide services to the citizens of Provo over the fiber network installed by the city. You can read the full text of the RFP on the Provo city website.

XMission was excited to respond to Provo’s request. This was in fact, the first time we had been invited to participate at all. The process that Provo originally engaged in to select their disastrous first Internet provider, HomeNet, and then subsequent providers was never extended to XMission. This in spite of the consistent calls from Provo residents to iProvo to allow us to participate on their network.

After responding to Provo’s request, XMission had a number of meetings with iProvo which were welcoming and positive. The last meeting we had with them was in December when we were told that we were on track to be a participant and some wholesale pricing was reworked. Yesterday, iProvo held a press conference where they announced the sale of the network to a company named Broadweave.

I attended the press conference and asked a simple question of the mayor, “Do you think the sale of a public asset should be done through a public process?” His response was that it was done in a public fashion and that I only needed to read the RFP to understand that the network sale was a possibility. The RFP title states, “Partnership Opportunities with Telecommunication Service Providers on the iProvo Network” with the keyword being “on”. Later in the document the “goals and design for the Network Project” are laid out, with the first being, “To provide the citizens of Provo a full range of competitive choices for telecommunications services and applications.” How exactly does selling the network to a business which will lock out out all other businesses meet this goal of the RFP? As recent as two weeks ago, Mayor Billings was claiming there were offers, but “due diligence” had prevented a sale. If this is the same “due diligence” that selected HomeNet, an out-of-state company which used forged documents to prop up its financials, then it would have been enlightening to see how Broadweave was selected.

Unfortunately, none of the proceedings in selecting Broadweave are public. Provo officials have handled the public trust much like a private entity in signing “non-disclosure agreements” and not being fully clear that iProvo indeed was for sale. Although the claim is made that Broadweave is paying $40 million for the network, they are simply assuming the bond debt, which will fall back to Provo City if they can’t sustain their business model and Sorenson Capitol backs out of the transaction.

I wish Provo the best success in their efforts, others have been more critical. Some have claimed my comments to the press are so much “sour grapes”. Let me be clear, my interest in iProvo since its inception was being a provider on an open-competition network. I believe there is a very good reason private interests worldwide are not building ubiquitous fiber networks — the payback is beyond 20 years. There is no doubt in my mind that if Qwest, Comcast, and all data service providers were restricted to providing service over one municipal fiber network, it would not only succeed, the public would see cheaper rates and superior service. The lack of proper RFP for the sale of iProvo hands the network over to a single private interest that will control rates and service.

I have been told that there were other national and international companies who expressed interest in purchasing iProvo. Would they have kept the network open to service provider competition? Would there have been a better deal instead of just assuming the bond debt? Without a proper RFP process in place for the sale, the public will never know.

Since the beginning of iProvo, XMission has wanted to help the network succeed. Instead, we have been inexplicably stonewalled and blocked at every turn. What is certain now is that there will be no open competition on the iProvo network. Eventually this country will realize that fiber infrastructure is not a luxury that can be sustained by a business model, but a necessary investment in our economy. Sadly, it is going to take another decade of mismanagement and lost promises by the private sector before that is realized.

15 thoughts on “iProvo Sale and RFP

  1. Mayor Billings’ lack of transparency and “we’re not selling it, whoops we are” switcheroo are reason enough to know that there’s something rotten in the state of Provo. Even if Broadweave shoots the ARPU way up to $55 (which is totally unrealistic given the performance of other FTTH networks at similar price points), they’ll still be hard-pressed to finance operations and the bond. He’s hoping to capitalize on the initial wave of relief washing over the municipal council before they realize this deal is not the end of their problems.

  2. Any chance of Xmission buying Broadweave in the future? If they do end up failing spectacularly, then it could make for an easy way to get into iProvo.

  3. I know a good attorney that will stop this in their conflicted tracks. This sale needs to be open to everyone, not a bunch of Republican business insiders.

  4. I have some questions to ask Provo officials. First, after working so hard and sacrificing so much to pioneer something new, are you willing to throw it all away and loose many of the originally sought benefits? Didn’t you create your own network because the telecom incumbents weren’t taking the initiative to do it themselves? Didn’t you decide back then that the lack of a truly free market in telecom was what caused poor service offerings in your city in the first place? Are you willing to sacrifice those principles just to get rid of the network? If the answer is yes, then I have one more simple question for you…

    Why doesn’t the city put an open invitation for any company to purchase the network? Wouldn’t the public and city interests both be best served by an open invitation for buyout bids? Are you afraid that some other company would come in with a better offer than Broadweave? Wouldn’t that be better for the city?

    As it stands, the current proposal reeks of a back-room deal that doesn’t serve the best interests of the city.

  5. Go Pete go! I’m glad someone has what it takes to stand up to Provo and the mayor. What a slime bucket. Here is what I predict. Billings is positioning himself for a job after he is done being mayor. I’ll bet part of the deal (that the city council doesn’t know about) is if he sold it to Broadweave Mayor Billings gets an executive position at Broadweave after he is done serving. Only time will tell.

  6. You are so right about this Mr. Ashdown. I know that Provo officials were actually surprised when proposals turned up to purchase the network which was not their intent when it was issued. How do you open an RFP and leave it open indefinitely? At what point in time do you do the “apples to apples” comparison and pick a winner? Perhaps it would be when you have had time to share all the earlier proposals with your backroom buddies and then help them craft a winning proposal? This is clearly a blatant disregard for lawful and open public policy. Please, please, challenge this legally. You will win hands down or more likely be offered a nice piece of the pie to go away and be quiet.

  7. It’s unfortunate that as a Nation we haven’t figured out how important it is to have a fiber infrastructure.

    Our economy has dropped to number 2 in the world and we’re struggling in a recession among other financial problems. Other countries are prospering and a small part of it I believe is because they have the forsight to build an infrastructure which encourages growth in the Information Age.

    There are some options coming along. Qwest has now stated they are rolling fiber in the Salt Lake Valley. I can only hope they will run it like infrastructure rather than lock out competition (like Comcast has).

    Utopia is very promising but only if they can get past the financial hurdles and get the word out. I’m hoping once Mr. Chris Hogan works out a few things that we could help move them in a positive way (I’ve already been in contact with him so crossing my fingers).

    In a nutshell, I believe our country can’t succeed unless we begin somewhere to catch up with the rest of the world. We certainly won’t get back to the number 1 economy unless we try.

    I just wish I understood why these people are having such a hard time understanding the need for infrastructure.

  8. As a Provo resident and an XMission customer, it is very disappointing that I must choose between the best ISP in Utah (XMission) and fiber. I have waited and waited for XMission to be allowed to be a provider in this supposedly open network. However, it appears that we have been lied to and now it’s never going to happen.

  9. So the “disasterous” relationship with the first service provider was toooooootally different than say UTOPIA’s relationship with xmission. Open Access doesn’t work, you should have launched your own proposal to put financing together to buy the network.

  10. muniwatcher, you don’t know what you are talking about. Ashdown is saying that any number of companies might have put together a proposal to buy if they knew there was a plan to sell, instead, officials insisted the city was moving forward with plans to change wholesale pricing and then allow companies like XMission to jump on board as service providers on the open network.

    In addition, MStar reportedly made a proposal to lease the network as the wholesale provider and even had potential financing lined up but was turned down in part because the city was concerned it wouldn’t maintain the open nature of the network (according to this), and then Provo went ahead and made a deal with Broadweave. If it’s true, it’s incredibly ironic.

    As far as the difference between the Utopia/XMission relationship and the first Provo provider, there is a huge difference because UTOPIA will allow any company that has met certain requirements to join as a provider. Provo has not allowed that after all these years. The RFP looked like they were finally going to allow it, but it turns out that was just a sham to sell the network in a backroom deal.

  11. Want further proof of Mayor Billings making back room deals? Read the Daily Herald today (6/3). The city tried to sell a parking lot in downtown Provo to someone but also got caught without posting an RFP as the city laws state they should have. Seems there is a pattern to how the Mayor handles sales when he wants them to go a certain direction – just avoid making it public. Someone should investigate that office to see what else he has conveniently sold without the proper RFP. There are likely other deals we don’t know about.

  12. Pingback: Steve Turley Blows Smoke on iProvo and UTOPIA » Free UTOPIA!

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