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Provo Moves Ahead with iProvo Project

by Phil Windley

I attended the Provo City Council meeting last night where the council approved going forward with a process that will culminate in the issuance of up to $39.5 million in bonds to provide a city-wide municipal broadband network. The network goes under the name iProvo. I have to state up front, that I’m a proponent of this project. I have to admit up front that I think its a great experiment ought to be deployed and Provo residents will ned up with a great network and enviable services.

The bonds would be retired using revenues from charging retail providers transport fees. If fees fall short, the bonds would be retired using surplus from the Energy Department (Provo is a municipal power city). The final backstop would be sales tax revenue. This last backstop is important since its the difference between a 6% bond rate and a 12% bond rate. That difference is worth $2.3 million per year in interest.

The Energy department’s presentation was a knock down of some of the typical arguments against these kind of large scale broadband projects. There were some people opposed to the bond and project, but by far, the meeting was packed with people in favor of the project.

Paul Venturella, project director, made a compelling case for economic development that compared Cedar Falls and Waterloo Iowa. Two side-by-side cities that are largely the same except that Cedar Falls has a municipal network. The industrial park in Cedar Falls has more than 10 times the number of businesses as a similar set of park in Waterloo. Based on quotes from people in Waterloo, they clearly believe that the network is what made the difference.

When the meeting was opened to public comment, 10 or more people, stood up and spoke passionately about the pilot project and the features of the network. I spoke as well. Here’s what I said:

My name is Phil Windley. I served as the Chief Information Officer for the State of Utah during 2001 and 2002. I’ve also served as the Vice President of Produce Development for a large nationwide broadband service provider and I was a Computer Science professor at Brigham Young University for six years.

As the CIO, I was the Governor’s point person in bring broadband to Utah. I’ve spent a great deal of time studying the implications of broadband for economic development and quality of life and the best ways of ensuring that everyone has access to the important enabling technology.

I have a book at home on the electrification of America in the early 20th century that I bought to understand what parallels there might be between that important step in America’s history and the penetration of broadband states like Utah. An interesting item from the preface to the book states that electrification in many parts of the country took two generations longer than more urban areas because private electric companies wouldn’t bring electricity to those areas and opposed any effort to provide public power. As you undoubtedly know, Provo is a public power city and has extensive experience in that area. I suspect that a review of the history of public power projects in Utah would show that for many of these cities, Provo included, public power was the only way to provide universal electric power for city citizens and to provide for economic development.

I feel that we are in a very similar situation now. There are many areas of the country that demand private telecommunications capital before that money is invested in Provo and other areas of Utah. Not coincidentally, in my opinion, Utah is one of the real hot spots for innovative broadband networking and Provo’s iProvo project is a great example of that.

The model that Provo will use does not have to exclude any provider. The providers who are opposed to this project are what we call “facilities-based” providers, meaning that their business model is to build and operate their own networks. Ask yourself why that is. The reason is simple, by controlling the network, they create a virtual monopoly and can exclude competition.

Part of what makes Provo an enviable place to live is the willingness of the city to provide public goods for both business and its residents. You’ve heard some very eloquent statements from people who’ve used these services in Grandview that illustrate the passion people feel for this network. I view Provo’s municipal network as a bold statement that Provo is at the leading edge. I strongly favor this project and urge you to move forward with it.

Phil Windley’s remarks to the Provo City Council on December 2, 2003.

After my comments, Jane Carlyle, a former member of the Provo City Council and a current member of the Energy Board spoke about the parallels between the formation of a municipal power utility in Provo and the iProvo project. She said that the municipal power utility was formed in 1936 and cited the following parallels:

  • The City Council set up independent committee
  • The study took 3.5 years to get from first idea to vote
  • Polls showed 70% of citizens would support a public utility
  • An ad campaign ran against the program by powerful outside interests
  • Many people thought there’d be tax increases and there was not
  • Outside interests used delay tactics after the vote

Jane called the municipal power project a study of great achievement in the face of uncertain risk and great odds. She concluded that moving forward with iProvo was “not a weighty decision.” The hallmark of public power is that it is locally owned and locally controlled. Public broadband would share this legacy. “Remember that the main concern is Main Street not Wall Street.”

There were some dissenting voices, but they were drowned out by the enthusiastic comments. The primary concern of those who spoke against he project were that taxes would go up because of the project and that there should be more public comment. There will be three open houses held in January and a final public hearing on January 20th.

Mayor Billings concluded with what I thought was a very well spoken and passionate plea on behalf of the project.

The final vote, at almost 11pm, was anticlimactic at 6-1 with only Stan Lockhart voting against moving forward. The vote does not approve the actual bonding, but signals the council’s intention to do so and starts the ball rolling. frankly, I think Provo’s smart to get this done before the next legislative session where I’m sure there will be some further skirmishes over Utopia.

See the Daily Herald Story

Posted by windley on December 3, 2003 09:52 AM