Broadweave's Busy Summer

Broadweave also had trouble closing the deals to acquire the customers on the network from existing providers. Mstar, which held by far the largest base, signed a deal. But in July, Veracity pulled back, citing delays in the overall iProvo acquisition, which failed to close on schedule before the end of June. And in August, Nuvont refused to sell its own customer base to Broadweave — a conflict still unresolved as of this writing.

In addition to changing the model, Broadweave also planned to replace some of the equipment in iProvo's network with gear it had already deployed elsewhere in MPCs. Though iProvo was built on an active Ethernet architecture using gear from Worldwide Packets (now Ciena), Broadweave announced it would replace the gateways in customer homes because they didn't natively support session initiation protocol (SIP) like gateways from Telco Systems that Broadweave had been deploying for years.

“One of the big things we're getting [from the iProvo acquisition] is scale,” Christensen said. “We had the platform. We really wanted scale. That's what we get out of this.”

As if this wasn't enough activity in one summer, Broadweave was moving simultaneously to acquire an FTTP network in Texas. Eagle Broadband had been searching for a buyer for its Houston network since the fall of 2007, when the service provider using those assets, Optical Entertainment Network, suddenly discontinued service after failing to line up needed new funding. Eagle declared Chapter 11 bankruptcy the same month.

This July, Eagle submitted a plan in bankruptcy court to, among other things, sell its Houston FTTP network to Broadweave for $280,000. The network passes “several thousand” homes, said Brian Morrow, chief operating officer for Eagle, but it is not believed to have any subscribers due to OEN's rapid collapse. Morrow expected that deal to be approved in mid-July. A month later, Broadweave was still “trying to wrap that up,” Christensen said.

As in Utah, adding subscribers to the Houston network will be an uphill battle because many customers have already been burned by service providers on the network going out of business. Still, those failures have created exactly the opportunity that Broadweave is seizing, and as Christensen said, there are more networks out there.

Whatever the company does next, with two major acquisitions in just one summer, Broadweave is clearly expanding much more rapidly than it was in 2006, when Christensen told Telephony, “We're growing like crazy.”