Provo Municipal Council Chairman George Stewart announced Tuesday that he does not support a $1 million loan for iProvo, and other council members joined him in asking for a new set of budget numbers.

The loan is part of the proposed 2007-08 Provo City Budget presented by Mayor Lewis Billings last week. The money for the extended line of credit would come from either the general fund or enterprise fund reserves.

Stewart said that extending a loan to iProvo, the city's fiber optic network for Internet, television and phone services, would saddle future councils with unfair burdens.

While Provo is seeing good economic years, downturns are possible, and the city should pay the costs associated with iProvo out of current city revenues, he said.

Stewart further argued that the budget used a faulty assumption of 60 net installs per week for its revenue figures, even though installations over the past three months have averaged 20 per week.

Billings defended the use of the 60 installs per week figure, saying that retail providers need to be pushed to get sales up.

Council members, meanwhile, asked for a budget projection based on 40 installations per week.

Both Billings and Stewart look at iProvo as a piece of critical city infrastructure.

"We fund infrastructure all the time," Stewart said.

But unlike water or sewer services, where "natural monopolies" tend to occur, there are existing commercial providers for telecommunications services, Stewart noted.

In Utah, municipalities cannot directly enter the competitive marketplace with telecom services. For iProvo, a commercial retail entity has to actually provide the service portal to consumers.

That means iProvo leases its lines to MStar and Veracity, its commercial providers.

Councilwoman Midge Johnson suggested that there is no real downside to paying off the iProvo debt early by using current city revenues.

Billings also explained that if the city were to adopt the budget numbers based on the 60 installations per week figure, the worst outcome would entail accruing a little more interest, and the option to pay it off would still be there next year.

There are nearly 10,000 iProvo subscribers.

Nathan Johnson can be reached at 344-2543 or at njohnson@heraldextra.com.

This story appeared in The Daily Herald on page D1.