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May 12, 2008
Broadweave Buys iProvo
By Nathesh, TMCnet Contributing Editor
Mayor Lewis Billings, of the city of Provo, Utah, announced that the city-based fiber optic system iProvo was sold to Broadweave, a local fiber-optic services provider. This is a step towards the privatization of iProvo to overcome the predicted losses it is going to incur.
iProvo is the name of the Fiber-To-The-Home (FTTH) service owned and operated by the city of Provo, Utah. It is the largest municipally-owned FTTH network in the United States. Provo's backbone connects homes and businesses throughout the city, as well as municipal buildings, schools, power stations, and traffic signals at speeds up to 1,000 times faster than cable or DSL
.
.The concept of Provo was simple. It was formed to deliver fiber optics to every home in the Provo community to connect them to the rest of the world. However, critics have argued against city based telecommunication networks saying that municipalities cannot cope with high technology infrastructures. A study report stated that iProvo's wholesale plan depended heavily on the performance of its retail partners; retail pricing for services using iProvo was not substantially different enough to prompt consumers to migrate away from service providers like Comcast (News - Alert) and Qwest Communications, and iProvo was not contributing significantly to the growth of broadband in Provo.
Broadweave will purchase the fiber-optic network for $40.6 million, which is enough to retire outstanding bonds incurred by Provo to build the system. Provo issued $39.5 million in bonds to finance the construction of iProvo. Since its inception, the network has experienced high churn rates among subscribers and relied heavily on subsidies to keep afloat.
"This is a tremendous opportunity for Provo, which comes as the culmination of many months of hard work and deliberation," said Billings. "Our city gains the full advantage of the sale, while continuing to enjoy the benefits of this advanced infrastructure."
The takeover is scheduled to be completed in June 2008. And under the deal the city of Provo, it will have exclusive rights to connect city buildings, schools, and power infrastructure with the network while Broadweave will be the owner and service provider.
Broadweave deploys its own FTTH networks and delivers over its fiber networks all three classes of service, telephone, television, and Internet, under its "Triple-Weave" brand of services. In 2003, Broadweave became the first carrier to deploy a fiber-optic network that supports primary-line services over a single IP connection to the customer.
connection to the customer.Broadweave's board of directors includes notables such as Fraser Bullock, COO of the highly successful 2002 Salt Lake Winter Olympics, and Robert Frankenberg, former chairman, president, and CEO of Novell (News - Alert). Sorenson Capital, a private equity firm headquartered in Salt Lake City, intends to invest in Broadweave Networks in order to make the purchase possible.
"As a single entity operating both the fiber-optic network and the services racing over the network, Broadweave will be able to offer an even higher level of service quality, reliability and customer satisfaction," said Steve Christensen, chairman and CEO of Broadweave. "Our primary goal is to make the transition as smooth as possible for existing customers."
Customers will notice an increase in service quality and support, Christensen noted. "We will invest heavily in the fiber network to add more HD channels, superior Voice over IP (VoIP) offerings, upgraded IPTV (News - Alert) set-top boxes, and other technologies to increase features and services for our customers," Christensen added.
) offerings, upgraded IPTV (News - Alert) set-top boxes, and other technologies to increase features and services for our customers," Christensen added.According to Christensen, Broadweave will also sharpen its focus on business subscribers. "Broadweave will be investing heavily in network upgrades in order to increase capacity, features, and performance for commercial customers who will now enjoy a full suite of unified communications and hosted telephony options in addition to the unparalleled bandwidth they've come to enjoy already. We are taking an already great system to a new level,” Christensen said.
Nathesh is a contributing editor for TMCnet. To read more of Nathesh’s articles, please visit his columnist page.
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