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The iProvo deal is complex. Really, really complex.
It's so complex that officials of the city and new fiber-optic system owner Broadweave Networks have given themselves 60 days to iron out the details of the $40.6 million deal. The players had initially given themselves a deadline of June 30 to close the deal, but despite working late into the night they were unable to come to full closure. The deal may be so complex because it involves a city and at least half a dozen companies, including Internet service providers, a phone company and a venture capital business.
Don't be alarmed, said Mayor Lewis Billings, as the sale is complete enough to turn over the system to Broadweave.
That customer service number is (801) 691-5800.
"There are hundreds of decisions that need to be made. The sheer volume of it is pretty daunting," said CEO Steve Christensen, who surfaced on Tuesday to speak with the press.
The Deal
• Broadweave isn't buying the system outright; they are instead taking over the city's bond payments and the accompanying highly favorable municipal interest rate.
• In the event that Broadweave collapses, the deal calls for millions in surety payments so that the city can continue to pay the bond while looking for another buyer. Some -- including Rep. Steve Clark, R-Provo --¬ have questioned whether the surety amount is enough. It is $6 million the first year and $3 million the second and third years.
• The company is leasing the city's network operation center.
• In separate deals, Broadweave acquired the entire iProvo customer base from previous Internet service providers Mstar and Nuvont, and merged with ISP Veracity. That makes it the sole owner and operator.
Transition
When asked what kind of immediate change the system's more than 10,000 customers should expect, Christensen said none other than improved customer service.
"Today's our first day on the job," he said, calling this the "visibility phase" in which his company will dig into the system and see what needs to be improved on or fixed. He wouldn't put a time period on the transition.
What customers -- and potential customers --¬ should be seeing shortly in the mail is paperwork. There will be activation forms, brochures for packaging and pricing. Some of those prices have gone up from Broadweave's initial package announcement and a few have gone down. Christensen said it was to better match what the former ISPs were already charging.
Marketing
The mailer also will contain a deal. The deal will be that current and new customers will receive a free month of service if they sign with Broadweave for one year, or two free months of service if they sign on for two years.
Christensen said he's aware that competitors like Comcast are going door-to-door trying to pick off iProvo customers during the transition.
"We're just glad that they're talking about us and spreading our brand," he said, adding that Broadweave will be launching its own marketing campaign.
Keeping the 'i' in iProvo
The city will retain some access to the system. The deal allows it to keep a 3 megabits connection to each home and business for utility purposes. It could be for automatic meter reading or instituting a "smart grid" for the power company. For example, the city could lower the rates of those willing to use high-usage appliances during off-peak hours.
Billings predicted that the system would allow the city to do things in five years that no one has thought of today.
"It's very critical that we have that asset," he said. |
