iProvo Still Struggling to Break Even

None by KCPW

City to Pump $1.2 Million into Broadband Experiment

(KCPW News) Provo's experiment in city-run high-speed internet service continues to rely on infusions of cash to stay afloat. iProvo is asking for - and will likely receive - more than one million dollars from the city council to make up for lagging subscriptions. iProvo Acting Director Kevin Garlick says it's the latest in a string of cash requests that will probably continue.

"In the current year budget it's approximately $2 million, this year's proposal is $1.2 million. Next year it may be $1.5 million, and then it lessens to a little under a million dollars," says Garlick. "But after that, we're hoping to break even."

Garlick says iProvo needs 13,000 to 15,000 subscribers to "break even." The original estimate was 10,000, but in the two years since iProvo came online, start-up costs and other hurdles have mounted. It now has just shy of 10,000 subscribers, but city officials remain optimistic the venture will one-day stand on its own. However, a report from the Reason Foundation in December predicted iProvo's demise, and researcher Stephen Titch says the latest cash request is further proof:

"I don't think it's ever gonna get the traction hoped," says Titch. "How painful its demise will be really depends on how long the city council wants to keep funding it. But the city council really should begin to demand that iProvo meet its business plan."

Titch believes Provo - along with about 20 other U.S. cities - underestimated the costs and competitive pressure they would face in offering high-speed internet connections like municipal utility. Kevin Garlick says iProvo's model is solid and is actually forcing other internet providers to lower their prices.

Email to a friendPosted in KCPW Newsroom. Copyright 2008 KCPW