American Fork has taken a next step toward selling its broadband system.

The City Council voted Tuesday to accept a extend the time for Surpha to enter into a contract with the city to purchase the system.

The Orem-based company made an offer to purchase the system in the spring. At that time, the city signed a letter of intent to work with Surpha. The company had a deadline to meet to do due diligence and complete contract negotiations. The City Council action extended that period of time to Oct. 31.

"We had a letter of intent and hoped to get a contract," councilman Dale Gunther said after the meeting "Surpha ended up needing more tie to do due diligence. They haven't done a contract yet." He explained that due diligence included analyzing the assets of the network.

"They will present a contract to us," Gunther said. "We will have our legal counsel look at it. There will be fine points that will have to be agreed to."

Councilwoman Heidi Rodeback said in an interview prior to the council meeting that she thought the company a viable option.

"They really have a lot of experience in the industry," she said. "They specialize in business applications. They are a very solid company. They have a really sound reputation."

American Fork purchased the fiber-optic system in 2002, and bonded for $6 million to make the purchase and begin operations. At one point, the system was losing $1.2 million annually. City officials pointed to changes in state law, which did not permit a community to market such a system to the public, but instead had to rely on Internet service providers to do so.

Rodeback had previously said that the private ownership would enable more capital to flow to meet the system's needs and bring about necessary upgrades and expansion of the network. The city had sought a firm which could offer the triple play of Internet, television and telephone.

In October, American Fork accepted an offer from Sweden-based PacketFront, but that company's financing fell through. The city then requested more proposals for the sale.

The broadband network consists of nearly 100 items including 60 miles of fiber-optic cable within the city and running from Spanish Fork to Salt Lake City.

Surpha was initially founded in the same year American Fork purchased its broadband network, with world headquarters located in Orem. It offers high-speed Internet access, wireless broadband services, managed telecommunications products including Voice over Internet Protocol (VoIP), co-location and hosted applications.

Historically, Surpha's focus and success has primarily been in the business to business market sector. Surpha has broadened its product offerings to include business to consumer products and services that will take advantage of its private managed network.