American Fork City Council members voted unanimously on Tuesday night to sell and lease portions of the city's broadband fiber-optic network to Sweden-based PacketFront Inc. for $2 million.

PacketFront will invest $8 million into the system, upgrading it and making it profitable -- something the city couldn't do.

The company will honor the wholesale agreements the city already has in place with vendors, and will interview existing city broadband employees as part of a good-faith hiring process, said Councilman Dale Gunther.

It will also eventually offer the so-called triple play service -- Internet, cable television and telephone services. The city now offers only Internet service.

In 2002, American Fork purchased its fiber-optic system from SwitchPoint for $6 million, floating a bond to fund the purchase. City officials had said the system, which has 1,400 subscribers, could bring in profits of $300,000 a month but instead the system has lost $1.2 million annually, Councilwoman Heidi Rodeback has said.

The city still owes about $5 million on the bond and is making annual payments of about $580,000, said city staffers. In December 2005, the city announced it had sold 24 fiber-optic strands -- 16.5 percent of the city's total capacity along 60 miles of cable -- to the Utah Telecommunications Open Infrastructure Agency for $1.5 million.

As part of Tuesday's agreement, PacketFront will purchase all of the fiber-optic cable within the city and lease a portion of the city-owned aerial fiber-optic cable that runs from Springville to American Fork and six strands of underground fiber-optic cables that are part of more than 100 strands the city still owns running from Spanish Fork to Salt Lake City, Gunther said.

PacketFront was chosen from five companies that submitted bids, he said. The council made its decision based on "how the customers would be dealt with and whether there would be an improvement of services."

Once the agreement is completed, PacketFront will spend $8 million over 15 months to upgrade fiber-optic connections to homes and businesses within the city. The upgrades will allow the company to offer the triple play.

"This is wonderful news," said Douglas McMurray of PacketFront. "We are extremely excited to come in and invest within the community. Our main goal is to make this particular network a flagship network that will represent what can be done when private enterprise works with public entities."

"This has been a difficult decision," Rodeback said. "We've started from a standpoint of wanting to preserve a valuable asset."

The city does not have the budget to provide the upgrades necessary to offer triple play but PacketFront "can operate in a way we never could," she said.

Councilman Shirl LeBaron said he has been "a proponent of municipally owned broadband, but I recognize the reality of budget constraints" and that the agreement benefits the city because "we maintain ownership of the fiber. I think it is important that the city maintain that asset."

"My only question is will I be able to get the BYU football gamefi" said Councilman Rick Storrs. McMurray said yes.

In June, American Fork listed as surplus its broadband network of nearly 100 items including 60 miles of fiber-optic cables within the city and running from Spanish Fork to Salt Lake City, two Ford Ranger pickups, a chainsaw, a 28-foot ladder, 12 telephones, two laptops and two five-gallon water jugs "with mounts."

This story appeared in The Daily Herald on page D1.