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Study Blasts Municipal Broadband In Utah
by Michael Martinez
A municipal high-speed Internet project in Utah is likely to keep the city that launched it millions of dollars in the red, according to a study released this week.
A study issued by the California-based Reason Foundation, a think tank that promotes "libertarian principles" including free markets, found that a municipal broadband initiative in Provo has gone broke and is not likely to ever break even.
According to the report, the $39.5 million iProvo network, which was launched in 2004, lost $1.67 million in fiscal 2005 and has only acquired half the subscribers its builders projected. The iProvo system was built on a fiber network and is operated by the telecommunications division of the city's energy department.
"Provo entered a fast-moving broadband market that it, like most local governments, is ill-equipped to compete in," study author Steven Titch, a foundation policy analyst, said in a press release. "At this point, taxpayers can only hope to limit their losses."
The Reason Foundation also noted that the iProvo network has failed to meet its goal of providing service at more affordable prices than private providers. The report found that none of iProvo's service packages is being offered at prices significantly less than those offered by Comcast or Qwest Communications International.
Provo officials told The Daily Herald this week that the foundation's report is inaccurate and biased. Provo Energy Director Kevin Garlick told the newspaper that the group has a history of advocating for public-private partnerships providing government services.
Some lawmakers said the city's back is against the wall if it is going to break even on the iProvo project. Provo City Councilman Steve Turley said the city does not appear to have a plan in place to attract the subscribers it needs in order to compete with existing broadband providers.
"There are about 30,000 households in Provo, and if we need to have 15,000 subscribers to break even, that's 50 percent of the market. That's extremely difficult for any market to achieve," he told the Herald. "We're being outgunned by the competition, and our costs are extremely high. Qwest and Comcast offer a more competitive package. Qwest has a $200 million annual research and development budget, and Provo city has none."
Garlick said Provo is "on target, moving forward and adding subscribers."
Local governments considering similar projects should take a hard look at iProvo's struggles before doing so, the Reason Foundation said. The group's report said that most municipal broadband projects are similarly flawed and that Provo's problems should "come as no surprise."
"The cautionary tale of Provo is that operating as a wholesaler is not enough of a hedge against the financial and logistical problems that occur when a city seeks to compete with commercial service providers in a competitive business sector," the report said.
Data Security Lacking In Virginia, Audit Says
Government agencies in Virginia have largely done a poor job implementing measures to protect sensitive data, according to a state audit.
The Virginia Auditor of Public Accounts found that 83 of the state's 104 agencies either have inadequate information security infrastructures or no information security plans at all. The audit blamed poor coordination among the Virginia Information Technologies Agency and other agencies for some of the problems at larger entities.
"Information security programs are generally inadequate and do not address both the business needs and risks associated with not controlling that information," the audit said.
The State Taxation and General Services departments, as well as the University of Virginia, Virginia Commonwealth University, and Virginia Polytechnic Institute and State University (Virginia Tech), all were credited with providing "working models of the state's best practices" in information security. The audit found that problems at larger agencies most commonly resulted from poor managerial placements of information security programs.
The report said most of the agencies can better secure information without making "significant operational changes." But it urged the adoption of a program to help smaller agencies and institutions solve their information security woes.
Florida Settles Billing Case With AOL
Florida Attorney General Charlie Crist on Tuesday announced a deal with America Online to settle consumer complaints about over-billing, membership charges and other issues.
Crist, a Republican who is set to become the Sunshine State's next governor in January, launched a probe into the company last year after receiving more than 1,000 consumer complaints about botched cancellation requests, charges imposed on spin-off accounts, inappropriate reactivation of accounts and other matters.
AOL has been ordered to pay restitution and forgive outstanding balances of consumers who were identified in Crist's investigation and those who filed complaints with his office. The company has agreed to offer refunds and credits and forgive outstanding balances to all eligible consumers.
"Consumers should not have to keep looking over their shoulders to make sure mega-corporations aren't trying to take advantage of them," Crist said. "This agreement is an important step toward protecting our citizens from consumer fraud."
California City To Regulate Nanotechnology
Lawmakers in Berkeley, Calif., have passed legislation to make it the first city in the country to regulate nanotechnology.
The Berkeley City Council approved a bill to amend its hazardous-materials law to include materials manipulated at the molecular level. The law is scheduled to take effect Friday.
AP reported this week that the proposal has been on the table for about two years. Lawmakers were prompted to examine the issue after the Lawrence Berkeley National Laboratory announced plans to build a nanotech department called the Molecular Foundry in the city.
Nabil Al-Hadithy, the city's hazardous-material manager, told AP that the lab objected to the legislative proposal at first, even though it was designed to monitor the activities of small businesses. But he said the lab since has changed its tune on the bill.
"We're hoping others will use this format and duplicate it in health and safety codes around California," he said.
Denver To Withhold Cash From E-Voting Firm
Election officials in Denver this week said the city will withhold more than $50,000 in payments to the e-voting manufacturer Sequoia Voting Systems because of technical glitches that caused disruptions at polling places Nov. 7.
The Denver Post reported this week that the Denver Election Commission announced plans to keep $52,160.25 from Sequoia. Commission spokesman Alton Dillard said the deductions were made necessary because of mistakes made by Sequoia that resulted in staff overtime, on-call overtime, extra postage fees and printing errors on Election Day.
The commission has estimated that about 20,000 people did not have a chance to vote last month because of delays caused by e-voting glitches.
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