From what I've seen and heard, there are only two likely things to happen tonight: 1) the council will approve the sale or 2) the council will vote no and require the city to issue an RFP and accept other bids for a period of time. I suppose there's a possibility for a #3 - the council will put off making a decision for one more week.
Personally, I'm sympathetic to some of the arguments George Stewart made against doing the RFP/bid process. It just seems like a gamble. Unless there is currently another credible, well-funded bidder, Provo stands to risk losing employees, customers, and putting Broadweave in a position where it could renegotiate better terms. I'm not saying that will happen, but the risk seems to outweigh the reward in this case.
I realize this is slightly a change from what I've said previously, but I am particularly sympathetic to the idea that key employees could be lost during a period of uncertainty. I have been through a number of mergers and acquisitions in my career, and I have certainly experienced that during those periods of uncertainty the best people start looking around to see if there's something better somewhere else. It tends to be good for the employees, but it' really bad for the companies. This is already a problem for iProvo and Broadweave. A two month pause would make it even worse.
I still want to see a voting member of the board for Provo, but overall I think the council should approve the sale.
- Broadweave has a good chance of success operationally with Veracity on its team.
- Provo will get most to all of its telecom debts paid under this deal. This is better than any other sale of a municipal network that I've read about so far.
- If Broadweave fails Provo has both the capital call agreement and the ability to foreclose on the network and any improvements to the network. Failure would be bad for Provo, but it would be manageable.
5 comments:
Well, I hope for Provo's sake Broadweave is able to pull this off. Because if they don't, history won't be kind to the city's surprise sell to an amalgamated company with no operational experience as a whole. A sale that was based on meeting a dubious "legal" standard because the interested parties didn't want to include the citizens in the sale of citizen's utility. And when the citizens want input, the interested parties cry out that it will weaken the companies and the deal. To me the complaining about scrutiny screams a fundamental misunderstanding about public government. Perhaps this open scrutiny is why most companies shy away from dealing with government.
I know a few people involved with this deal and all state that the combined company is quite up to the task. These "sources" have different viewpoints on the whole deal but it is comforting that they can agree that Broadweave is as up to the task as anyone. To Broadweave's credit, they will breaking ground as no city has ever sold off such a large network. There is no experienced firm out there for such a transition.
I find it ironic that the details have been known for less than a week but the expectation is that the council will ratify. Anything less would be the surprise. What a sad commentary on open government.
Jaren,
I understand your concerns. It may be that this should have been done differently from the beginning, but I'm worried that if we try to redo the process from where we are now that we put at risk our current opportunity without the likelihood of much benefit.
Maybe I'm focusing on end result rather than worrying about correct process, but sometimes there's a trade off.
From some of my contacts in the fiber world, I know that there are several companies interested in making a bid for the network with better terms that what Broadweave offers. This is certainly far from "Broadweave or bust" no matter how Council Member Stewart and Mayor Billings may frame it.
To Jesse's comment: we may never know what iProvo is worth. But iProvo is in much better financial shape than any other municipal broadband offering and it would make sense that it would earn more than 30% of value that Mayor Billings likes to quote. Even Jarrod's back-of-the-napkin how he-would-fix-iProvo post showed what a great deal Broadweave is getting and how simple course adjustments could right the ship.
I too don't believe in "Broadweave or Bust" (nice one!). That said, I have heard many good things about them. I sure would have loved to see what Xmission could have offered. But this deal is about many things, city-wide dialog not one of them
If I had my way, Broadweave would get a chance as a concessionaire and prove that they are as capable as word on the street has them. And if they aren't, a concession is for more reversible than this sale.
We are where we are now because the very processes that give the public faith in the "end" have been compromised in the "means" to get there. I can point out that the wounds are now self-inflicted, but I am resigned to this deal closing in the same closed manner it began.
But the benefits to a fair and open process are beyond this deal. I am not naive as to how hard business dealing can be. But no business will again fully trust in Provo doing the "right" thing. As previously noted, Provo violated the "good faith" effort Nuvont put into iProvo.
Bottom line:
Did this whole iProvo process give people more faith in the city? My answer is a clear no. I am afraid it's effects will be felt for decades in the lack of trust and violation of the social contract. Big effects? Who knows. But the "ends" in this case are far from confined to the "open access" debate.
And for the record, once this deal goes through, I will support Broadweave in their acquisition. And I hope it goes gangbusters because the Spirit of iProvo can only live in a competitive market. (And in the spirit of making peace I will offer a piece of advice to Broadweave: Caveat emptor! Because if Provo did it to Nuvont, Xmission and all of the others who in good faith tried to participate in iProvo, they'll find a way to do it to you.)
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