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Provo • Two telecommunications companies have offered to take over the troubled iProvo fiber optic network should Veracity Networks default.
One of them is Veracity Networks.
Veracity, iProvo's current owner, and Sandy-based OHIvey presented proposals for taking over the network in the event of a default on the original 2008 purchase agreement, Mayor John R. Curtis announced late Thursday.
Curtis said the proposals are part of a contingency plan. He said they will be weighed against the possibility of the city taking over the network again in the event of a default by Veracity.
"Any good business looks around and asks, 'What if …' " Curtis said.
Councilwoman Cynthia Dayton, who pushed for a contingency plan when she was council chairwoman, commended Curtis. "Given the whole [history of iProvo], I believe this is the best outcome," she said.
Dayton said she was surprised that Veracity is one of the companies interested in the network.
City spokeswoman Helen Anderson said Veracity is not precluded from making an offer in the event of a default. She compared it to a homeowner who loses his home in a mortgage default being able to bid on it at auction.
Drew Peterson, Veracity's chief executive, said the company submitted a proposal to help the city make iProvo as profitable as it can be.
"We wanted to make sure we were working with Provo on a contingency plan," Peterson said. "We are excited to be working with Provo."
According to OHIvey and Veracity's proposals, which were obtained by The Salt Lake Tribune under the state Government Records Access and Management Act, both companies would run iProvo as an open network, with more than one provider.
Veracity's proposal also calls for offering higher Internet speeds and creating free wireless hot spots around the city.
Peterson said Veracity has invested significantly in iProvo, upgrading aging equipment, and wants to expand its services to residents.
The city sold iProvo to Broadweave Networks in 2008, which later merged with Veracity Communications to become Veracity Networks. Under the sales agreement, the city continues to hold the $39 million bond, which Veracity is paying off in monthly installments.
When the city ran iProvo, it had to subsidize the network to the tune of $2 million a year because it didn't bring in enough money to cover the bond payments. Veracity has the same problem, so the city recently loaned it $1.48 million by allowing it to reduce its payments to the city for 18 months, and then pay back the loan through extra payments for seven years.
Curtis said Veracity is back to making full payments to the city and will begin paying back the loan in two years.
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