Public Power - October 2008 - (Page 13)

6 telecommunications—it constantly needs to be upgraded. What kinds of upgrades are needed on that system now? Some of the technologies used for the portals don’t perform as promised. There is a fix to that. They’ve talked about upgrading the middleware. That has a lot to do with the look and feel – the sizzle, if you will—of what it’s like to use the system. Our middleware was three years-plus old. When new customers sign up, there are some provisioning tools and software that are proprietary to their company that they are going to add that will reduce the introduction of human error into the setup of an account because it will now be automated. Has Broadweave made any promises about rates? They have talked extensively about rates. We’ve contractually restricted what they can do with rates. They have to stay within a regional rate or in other words, average . They have to be very favorably placed compared to other rates within our market region. We are serviced by two other broadband suppliers and there are two other retail providers on the iProvo network that will compete with Broadweave. We think competition is good. The consumer wins when there is abundant competition and Provo has probably about as much broadband competition as anywhere in America. What was your economy like before construction of iProvo and what it is like today? Are there any shining examples of economic growth that are a result of the fiber network? I was on a plane to Washington, D.C., a few months ago and a prominent doctor in our valley was on the same plane. He said, “You know, I started a software company that I had to move out of Provo because I couldn’t get DSL.” I said “Dang, I’m so sorry to hear that.” That’s about 80 good-paying jobs that are not in our commuwww.APPAnet.org 8 nity—still here in our valley, and that’s good. But, you never want to hear that you lost a business because they couldn’t get broadband infrastructure. It was that kind of thing that propelled us to move ahead and to take all this flack and even be a little bit bold. I think there are companies that still don’t feel the need for broadband, but those are far fewer than they were 10 years ago. That particular doctor does now have another company in our city and he is where he is and does what he does because he has access to the big pipe. If we had not done this, I expect we would have lost that business as well. 7 When the city owned iProvo, the city, of course, used the network and allowed competing private companies to lease capacity on the network to provide retail services. I read that the new owner wants to set aside that wholesale model and become the sole provider of services. Doesn’t’ that portend a dangerous return to a monopoly environment? In 2002 the state Legislature said that if municipalities wanted to do broadband systems, they were pretty much limited to being a wholesale provider. That’s one of the things that made, financially, the iProvo system a challenge. We were not able to go out and do retail provisioning. We had to rely on the play that private sector retail players made. Broadweave’s model is to be both the wholesale and the retail provider, but they could only purchase what we had to sell and we sold them our system “as is.” They acquired the customers from one of the retail providers. They talked about acquiring the customers from two of the other retail providers, but ultimately decided not to. They are contractually obligated to continue to provide wholesale services to those retail providers. They have no obligation to sign up other retailers to compete with them, but I think that their business model is one of constantly evalu- 9 ating the market reality and accommodating what that market dictates. I think you’ll see many companies partnering with them, but they’ll be companies that bring on added value benefit, like an alarm company that wants to run services over the iProvo network. Today, the things we do, we had no clue five years ago that we would do. Who would know you’d have to sit in church and tell your kid on your right to quit texting the kid on the left? Five years ago that wasn’t even an issue, but now you have to tell your kids “put your phones away, guys, and listen.” Five years from now, we’ll be doing things that you and I just have no notion of. That’s the beauty of this network—it scales and scales and scales. I was one of the first people in Utah to have a seven-megabyte hard disk. That was really a big deal at the time. You wouldn’t even allow a computer with a seven-megabyte hard disk in your presence today. I read that subscriber rates on iProvo fell short of expectations. Is that true and, if so, did the state legislation that tied your hands on how you could sell services play a factor in that? It was a factor, but a bigger factor was that the whole thing became very politically hostile. We had members of our municipal council who really wanted to make a big issue of this project and did. It became very politically hostile. There were those who knew that every time they spoke about iProvo, they could find themselves in print on the front page of the paper. And I think people would read those pieces and say “Well, maybe, I’ll try iProvo in a year, or give it another six months, or whatever.” Not only was it a hot issue locally, but we believe there were many regionally and nationally who wanted us to fail. There were those who really wanted iProvo to be unsuccessful so they could say, “Look, these naughty little municipal electric companies who go out and build these broadband OCTOBER 2008 13 http://www.APPAnet.org

Table of Contents Feed for the Digital Edition of Public Power - October 2008

Public Power - October 2008 Contents Perspective 10 Questions The Future of Fuels in a Carbon-Constrained World An Energy Revolution Energy Policy in 2009 and Beyond A Green Reincarnation Beyond the Green Bandwagon Reliability Green Energy Community Broadband Customer Service Hometown Connections Human Resources Parting Shot

Public Power - October 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.