After six years of operation, the Spanish Fork Community Network is in a financial position that might leave iProvo green with envy.

The high-speed Internet and cable television service run by Spanish Fork city is expected to bring in as much as $200,000 in profits by the time the fiscal year ends on June 30, according to John Bowcut, the city's information systems director.

In the city's budget for fiscal year 2008, the Spanish Fork Community Network is projected to make about $270,000.

Spanish Fork's good fortunes stand in stark contrast to the heavily publicized problems of iProvo. The Provo Municipal Council recently approved $1.2 million in sales tax revenues to help the city's high-speed Internet service pay off its debt service. City officials say iProvo won't be financially self sustaining until at least 2011.

The outlook is a bit rosier for Provo's neighbor to the south. When the Spanish Fork Community Network went online in 2001, its business plan said it wouldn't be self-sustaining for seven years. But the network reached that benchmark in just half that time.

"The business plan, I don't think, really understood the pent-up demand for the product. People were just wanting it so bad," Bowcut said.

In 2000, when the city put together an ad hoc committee to look at the possibility of providing high-speed Internet service through its existing fiber optic network, there were no providers in town. While the national average of homes with a high-speed connection was 15 percent to 20 percent, Bowcut said, that percentage was a glaring zero in Spanish Fork.

Residents were complaining about the lack of access and some local businesses told the city that they would have to relocate if no high-speed Internet service became available.

"We didn't want to be a second-class city, and we felt that if you didn't have some kind of high-speed Internet offering for your citizens, that's what you were going to be," Bowcut said.

Today, about 47 percent of Spanish Fork residents have high-speed Internet through the network, and many use other providers that have sprung up as well. The Spanish Fork Community Network provides either broadband or cable television service to about 6,000 homes in town, which is about 70 percent of all households.

Those numbers help explain the high profit the network is making, even with rising operating costs.

According to the city's preliminary budget for fiscal year 2008, the Spanish Fork Community Network will increase its expenses by about $530,000. Part of that is a $114,000 increase in spending on capital improvements such as new fiber optic cables and nodes.

Each node serves 150 homes, and Bowcut said about half the available households sign up as soon as each one is put in. The network had 45 nodes when it started, but now has nearly 80.

There are two fundamental differences between the Spanish Fork Community Network and iProvo that may help explain the disparity between the two cities' finances, Bowcut said.

The first is that Spanish Fork uses cheaper technology. Instead of running fiber optic cables directly to customers' homes like Provo does, Spanish Fork connects them to the nodes, which provide service to customers via coaxial cables. Spanish Fork had considered using all fiber optic cables, but it was cost prohibitive at the time, Bowcut said.

"When we looked into it (in 2000) it was about three times more expensive" to use only fiber optic cables, Bowcut said.

Wayne Parker, chief administrative officer for Provo city, said the all-fiber optic system used by iProvo is somewhat faster than Spanish Fork's hybrid model.

"Probably right now it's not an appreciable difference, but in the long haul, coax will eventually reach a saturation point where it can't offer any more bandwidth. Fiber is essentially unlimited," Parker said. "(Coaxial cable) is a less expensive alternative but it's not as future-proof."

The other major difference is that Spanish Fork is a retail provider of high-speed Internet and cable television, while iProvo is a wholesaler which provides a conduit for other companies to use.

"The provider obviously wants to make a profit also. So they have two people that are going to share the money that you get from the customer," Bowcut said. "Some of it goes to the retail provider and some of it goes to the wholesale provider."

Unlike Provo, Spanish Fork got into the high-speed Internet business in time to miss the cut for a state law that allows cities to provide the bandwidth for telecommunications services, but not the retail service itself. Since Spanish Fork already offered them, its network was grandfathered in.

Parker said Provo was considering both retail and wholesale options, but the state law made the decision for the city.

"We looked at both models, and when the retail option was taken away by state law the wholesale model was the only way we could go," he said

Jeremy Duda can be reached at 344-2561 or jduda@heraldextra.com.

This story appeared in The Daily Herald on page D1.