The actual shortfall will become painfully clear during a discussion planned for this morning, but on Wednesday Municipal Councilman George Stewart said the city can expect to lose at least some of the $7.5 million in subsidies it poured into iProvo.

"I think that is going to be our investment in the dark fiber and the access to homes," Stewart said Wednesday.

Mayor Lewis Billings and Broadweave Networks CEO Steven Christensen signed an agreement Tuesday to sell the fiber-optic network to the Provo-based broadband company.

The company will also pay the city to lease its network operations center. Provo, in turn, will pay $300,000 annually for the right to use the system's excess capacity - the so-called dark fiber - for controlling the city's power grid and doing such things as automated meter reading.

Although Broadweave's payment covers the cost of the $39.5 million bond issued to finance the network, the city has pumped almost $2 million a year in subsidies into iProvo to cover losses. Between 2003 and 2007, the city put $7.5 million into iProvo, and was projecting another $2 million in subsidies this year.

But city spokeswoman Helen Anderson said some of the subsidies, such as loans from the city's Energy Department, will be recouped. The remainder represents operating expenses and depreciation that cannot be recovered in the sale.

Anderson compared it to owning a car for five years and not being able to resell it for the original purchase amount, or being able to recover the money spent on fuel and repairs.

"What people have called losses are not losses, but expenses," Anderson said. She noted the city's debt on iProvo is $36.9 million, boosting the amount the city is getting back in the deal.

Even with that, Stewart believes the sale is good for residents.

The $300,000 for using the network for city purposes is a bargain price, compared with having to build the network from scratch and operate it on its own, he said.

dmeyers@sltrib.com

The Provo Telecommunications Board will meet at 7 a.m. today at the Network Operations Center, 744 N. 300 West.