Category Archives: iProvo

EXCLUSIVE: Veracity Pulls Out of Broadweave Merger, Sorenson Possibly Backing Out, iProvo Sale on Verge of Failure

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High placed sources, speaking on condition of anonymity, have confirmed that Veracity has pulled out of the merger with Broadweave and that Sorenson Capital may have withdrawn financial backing as a result. The 60-day delay cited by Broadweave in the papers is rumored to be buying time to find new backers. The loss of Veracity combined with the iProvo NOC employees who have left means that video experience is almost non-existent and staff resources will be stretched dangerously thin. This may account for anonymous commenters who have reported issues reaching customer service over the last several days. When asked about these details, Provo City employees involved in the deal were unaware of the failure of the merger.

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iProvo D-Day Arrives with Deafening Silence

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The deadline for Broadweave's takeover of iProvo has come and gone without much news or fanfare at all. In fact, other than the phone customers from Mstar, we don't know if any transition has taken place. Neither the Daily Herald nor Deseret News could reach Broadweave for comment and I know that Joe Pyrah has been trying for about a week. Broadweave's website also lacks updates on the current status of the transition. Either one of two things has happened: the sale still isn't finalized or the transfer has gone over so seamlessly that nobody noticed. Anyone care to shed some light on it? (Free tip: when the press is trying to get a hold of you, get back to them quickly. Not responding to a reporter looks really bad.)

Visitor comments on the phone switch have been mixed. One commenter reported a significant degradation of call quality after the switch and blames Veracity's phone switch, one that he alleges to have had problems for a long time now. On the flip side, multiple comments have indicated that customer support is substantially improved and it's easy to reach someone with questions via phone or e-mail, certainly an area where Mstar received a lot of harsh criticism. Certainly the ability to accomplish the emergency port of 1200 numbers was impressive.

I think the real test of the transition will be when the video customers are cut over. Four of the iProvo NOC technicians left prior to the sale being finalized and Veracity is primarily in the voice and data business. Broadweave doesn't bring a lot of in-house video experience to the table either with just a small pilot operating in the Sienna Hills subdivision of Washington City. A lot of complaints about the system video centered on advanced features such as VOD, HDTV and DVR, areas where rapid improvement will need to be made.

Comcast has already been attempting to capitalize on the uncertainty of the transition and if they can push those missing features via their own products, don't doubt that they will. Several commenters have reported receiving promotional offers in the mail pushing triple-play with a DVR for $70/mo for 6 months. Ads have also appeared in the Daily Herald to entice business-class customers, the most lucrative accounts, into switching to Comcast. Given the lack of notice from Broadweave about the switch and the somewhat confusing pricing information concerning package pricing, Comcast may have a winning bet with their FUD campaign.

As usual, any comments that fill in the gaps or relate user experiences are appreciated.

Mstar Customers on iProvo Lose Phone Service Because Mstar Didn't Pay Their Bills

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In an unbelievable move, around 200 Mstar customers on iProvo have been without phone service since Friday after New Global Telecom, the VoIP provider that Mstar uses, cut them off. NGT claims that Mstar is behind on their payments for iProvo customers and that UTOPIA customers are not affected. John Hansen, Mstar's interim president, says the claims of non-payment are bunk and blames the problem on iProvo customer service staff.

Broadweave managed to do an emergency transition of most of the affected customers to their network but it is still struggling with the last 200 or so. Phone customers are still able to receive calls and place 911 calls, according to NGT. Customer experiences have been mixed with some reports that the customer service lines are busy and others saying that they've been able to get through. For some odd reason, Broadweave's PR consultant has stated that they're waiting for the affected customers to call them to get the issue sorted out instead of aggressively trying to contact those customers.

While this problem isn't Broadweave's creation, it's their baby now. Mstar doesn't have much incentive to make sure the transition is a smooth one and can easily put egg on Broadweave's face by dropping a problem in their lap that they don't quickly resolve. It makes you wonder how many customers will unbundle services even if it costs more money to do so.

NGT also claimed in their statements that Mstar would be selling off the phone customers on UTOPIA to another provider. Obviously, UTOPIA can't comment one way or the other and there's nothing from Mstar to confirm or deny that claim. Any insiders want to clarify this in the comments?

(Read more from the Daily Herald. h/t: Capt. Video and Thomas Perry for sending along the stories.)

Shakeup at Mstar: CEO and Chief Marketing Officer Part Ways With Company

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After several rounds of laying off the rank-and-file, it looks like executives are among those now leaving the company. Mstar CEO Ben Gould and Chief Marketing Officer Kirk Tanner are no longer with the company, reportedly having departed voluntarily. The word on the street, according to the Daily Herald, is that Gould got an offer to go elsewhere whereas Tanner's status is unknown. John Hansen of Chicago Venture Partners LP, Mstar's owner, has taken over in the interim and there aren't plans in the near future to hire a new chief marketing officer.

Given their performance problems on iProvo and the decimated customer base from the sale of iProvo, it's not surprising to hear that Mstar went through some more slashing. Their plan is to re-focus on building a customer base on UTOPIA, secure additional financing and pursue opportunities on other fiber optic networks around the country. Also of note is that Broadweave offered a settlement to Mstar to get them to drop their objections to the sale of iProvo.

The question now remains: can Mstar survive? Post your thoughts in the comments. 

The Transition of iProvo Customers: A Rocky Road Ahead?

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An anonymous tipster raised a lot of good points concerning the transfer of customers from Mstar to Broadweave. There's less than three weeks left until the planned cutover, yet customers haven't been getting written notice of such. Despite intense media coverage and multiple public hearings, many customers could be left without any idea as to how to obtain technical support or change services. It's also concerning when you consider that the FCC requires at least 30 days written notice when changing channel lineups or pricing, the former of which is highly likely and the latter of which is already confirmed.

Internet customers are likely to be the most widely affected. Mstar customers with static IP addresses are certain to see a change as I'm sure that Mstar did not also sell their valuable assignments from ARIN. Broadweave will also need at least 40 class C assignments from ARIN to provide enough IP addresses just for existing customers, yet they currently have only 12 and is probably using most of them in Traverse Mountain. Veracity has around 16, though a large number of those are likely already soaked up by customers on UTOPIA, Off-Campus Communications and their business customers over Qwest's network. Nuvont doesn't even have a whole class C to bring to the table.

All in all, they're falling VERY short of the necessary IPs to run the network. The only way they'll have enough is if iProvo is also selling the rights on their IP assignments, a chunk of over 70 class C blocks. There's no documentation on the Provo City website to show one way or the other if that asset is part of the deal, but it would be foolish for the city to include it in this environment of tightening IPv4 assignments without a nice premium. Then again, I don't think they've shown that negotiating is their specialty.

If you're a current iProvo customer who will be transitioning to Broadweave, I'd encourage you to leave your experiences in the comments section. 

iProvo Sale Approved

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By a slim 4-3 margin, Provo's Municipal Council approved the sale of iProvo to Broadweave with Sherrie Hall Everett, Steve Turley and Cindy Clark voting against the deal. Now the ball is in Broadweave's court: perform or your name is mud. This puts Provo citizens in a tough bind. If Broadweave fails to meet its financial obligations (which I very much anticipate), the city and its residents get back a network with no providers and may have to pay to buy back the video head-end and any upgrades done. On the flip side, a lack of municipal ownership means citizens aren't as invested in the success of iProvo.

Best of luck to you Broadweave, but few of us regular Joes think you can do it.

(Read more from the Deseret News and Tribune.)

Letter to Provo's Municipal Council

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I sent the following letter to members of Provo's Municipal Council on June 2, 2008.

Greetings Members of the Council;

I apologize for the last-minute nature of this communication. I've been waiting to collect as much information as possible before I e-mail you important information on why Broadweave is the wrong company to sell iProvo to.

Certainly basic honesty seems to be an issue with Broadweave. As of May 15, they have neglected to obtain business licenses in any municipality where they do business. Washington City has considered referring the matter to enforcement. (See: http://www.freeutopia.org/2008/05/15/broadweave-lacks-proper-business-licenses-corporation-filings/) They also have repeatedly misrepresented their company's age, claiming to have existed since 1999, yet nothing shows that the company existed prior to 2003. In an interview today, Steve Christensen, Broadweave's CEO, is now claiming the company has been around since 2003. Why the lie? (See: http://www.freeutopia.org/2008/05/16/broadweave-did-not-exist-prior-to-2003-website-claims-first-contract-in-1999/
and http://www.freeutopia.org/2008/06/02/broadweave-doubletalks-iprovo-on-couchcast/) They have also talked up the importance of equipment ownership and the poor value of open networks while failing to practice what they preach. (See: http://www.freeutopia.org/2008/05/19/broadweaves-double-talk-on-open-networks/ and http://www.freeutopia.org/2008/05/20/broadweaves-double-talk-on-equipment-ownership/) It is even rumored that they have tax liens filed against them by the state for failure to pay their withholding taxes for November and December of 2007. (See: http://www.freeutopia.org/2008/05/16/evaluating-the-iprovo-asset-purchase-agreement/#comment-4887) Can you really trust a company that shows so many signs of being untrustworthy?

This says nothing of their expansion plans either. The Eagle Broadband network they have purchased in Houston was a seriously distressed asset. In order to make it usable, they need to build a NOC, negotiation franchise agreements and transport rights and replace some vital missing equipment. They also need to overcome a negative consumer perception. At the time that OEN, the previous network operator, went out of business, there were 1500 customers, all of whom lost their service with zero notice. That kind of poor experience means they will be plowing millions upon millions into a network with a strongly negative customer perception. This says nothing of their attempt to pursue developments in Nevada, Arizona, New Mexico and California, pursuits that will require even more money that they do not have.

So what of their technical experience? While Veracity brings in a lot of smart guys, Broadweave itself has zero experience delivering video in Traverse Mountain and has fewer than 30 video customers in Sienna Hills, a subdivision sitting in one of the areas hardest-hit by the subprime mortgage meltdown. Integrating the Veracity team, one that offers very limited video experience, will take months and result in major system hiccups. They will also have to attempt to integrate city employees from the NOC, many of whom are highly opposed to the transaction and have negative opinions of their soon-to-be co-workers. Replacing these highly-skilled employees will be very expensive and have a strong negative impact on network operations, especially in Utah's tight labor market.

The option you are presented with is a terrible one, to spend 19 years financing the operations of a dishonest company with big dreams and small execution that plans to acquire a basket full of technical and HR problems. I urge you in the strongest possible terms to reject this rent-to-own arrangement and find some other way to resolve the problems behind iProvo.

If you have any additional questions, I would be more than happy to answer them and would request that this letter be entered in as part of the public record on behalf of proponents of open municipal fiber optic networks.

—
Jesse Harris
(801) 937-4471

http://www.coolestfamilyever.com/
http://www.freeutopia.org/

Broadweave's Doubletalk on Project Sizes

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If you're going to inflate your company size, it's best not to leave evidence to the contrary. Broadweave claimed in a press release that the Traverse Mountain community encompasses over 8,000 homes, yet an interview between KSL Radio and Steve Christensen of Traverse Mountain shows the project to be more along the scale of 3,500 homes. This isn't the only instance either. Broadweave claimed before Provo's Municipal Council on Tuesday May 27 that the Sienna Hills area in Washington City would provide them access to over 20,000 residences, yet the entire utility easement encompasses only 740 acres. Unless the developer is looking at cramming more than 27 residences into each acre, the claim is simply absurd. Maybe they're already counting unpromised future contracts in that total. Didn't other companies already try that one?

Broadweave (Double)Talks iProvo on CouchCast

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Online talk radio show CouchCast had Steve Christensen on as a guest to discuss the sale of iProvo. Go ahead and give the show a listen.

A few observations:

  • Steve Christensen said himself on the show that Broadweave has been around since 2003, yet this conflicts with his statements to the Provo Municipal Council and the data found on Broadweave's own website. I'm glad that he's finally telling the truth about Broadweave's age, but why lie in the first place when it can be easily debunked?
  • Steve played the blame game regarding the phone problems again, saying that the network technology is the problem. (I can only assume he's blaming the portals.) However, he's also blamed the existing providers since they outsource their phone operations and don't own their own phone switches. Which is it? I haven't heard from any UTOPIA customers that report the same voice issues that iProvo seems to have, so I'm not betting any money on the providers as the issue. If it is the portals, why not go with a cheaper TA instead of replacing the entire portal? Sure, it makes sense to switch to another portal for future installations, but it makes little sense to do a wholesale replacement of existing equipment for all customers.
  • A central reason why telecommunications sucks so bad is that we've been pumping state and federal dollars into propping up incumbent phone carriers like Qwest while enforcing very few requirements that serve the public interest. A key point of municipal broadband is that if we're going to require public money to provide universal access to telecommunications, we should start demanding public ownership of the infrastructure as well. Steve Christensen correctly points out that public money is required to make it work, but incorrectly assumes that we have to continue this pattern of what Frank Staheli calls the "butt kiss" market to make it happen. It's corporate welfare at its best, insisting that a public good be subject entirely to private ownership but with plenty of public funds.

I've yet to find anything about this deal that doesn't instill a lack of trust and undermine confidence in Broadweave's ability to execute and straight-talk.

Reminder: iProvo and AFCNet Meetings on Tuesday

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Just a friendly reminder that Provo will be entertaining the motions to sell iProvo at a municipal council meeting on Tuesday the 3rd. The meeting will be starting at 5:30PM instead of the normal 7PM (h/t: Gary Thornock) and will include a lot of other business items as well. It's possible that they will vote at this meeting, but I'm betting they punt for the time being to take more time to evaluate the deal. I expect the hearing to last a VERY long time, just like the last one.

American Fork will also entertain a final motion to sell AFCNet to Orem-based Surpha, a company that I know precious little about. Given that the city has experience with Surpha as an ISP and it has been negotiated largely in the open for months now, I'm guessing the vote is just a formality. That meeting is also on Tuesday the 3rd, but at 7PM.