IProvo's philosophical woe
Not to worry, however. Because iProvo is part of Provo city, the city can just borrow from other funds to make things work. After all, it's just tax money. Last year, it borrowed about $1 million from the Energy Department. The City Council has authorized another $2.1 million line of credit from the department, if needed.
Of course, if iProvo were a private venture, it would be bankrupt. Politicians can't afford to let their projects die.
The iProvo network is a city-owned system of fiber optic cables connecting homes and businesses to high-speed Internet and other telecommunications services. It is designed so that private providers can lease it to provide those services in competition with each other. Two such providers now lease space on the system. However, the largest providers in the state have their own delivery systems and consider publicly funded networks to be meddlesome competitors.
However, the city never addressed three of the report's philosophical points. The first concerned unfair competition. Provo can simply borrow from other taxpayer funds to cover any iProvo shortfalls. Private companies aren't so lucky.
The second concerned a conflict of interest. Provo taxes, franchises and licenses telecommunications companies. That means it can raise fees or find other ways to keep competitors at bay. Is this fair?
Third, the report argued that iProvo won't keep prices low because its providers will know the city has a built-in incentive to keep from going bankrupt.
The city's growth in subscribers is one encouraging sign among myriad problems. But even if the system one day pays its way, the deeper philosophical questions remain.
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