Council approves iProvo sale to Google
But Provo reveals it will have to pay $1.7M to complete the deal.
By Vince Horiuchi
The Salt Lake Tribune
Apr 24 2013 09:35 am
http://www.sltrib.com/sltrib/news/56206589-78/google-network-fiber-provo.html.csp
The Provo Municipal Council voted Tuesday to approve the sale of its
financially-troubled iProvo fiber-optic Internet to Google, paving the
way for it to become Google Fiber.
The seven-member council voted unanimously to approve the sale, making
Provo the third metropolitan area in the U.S. to be a "Google Fiber
city." Google already announced that Google Fiber would be built in the
Kansas City area and Austin, Texas.
But in the case of Provo, the network will not be built from the ground
up as in the case of Kansas City and Austin, but will be built upon an
existing municipal network.
Google Fiber will provide up to a gigabit — or more than 1,000 megabits
— per second of download and upload speeds to the Internet, more than
100 times faster than the average Comcast connection, for example.
"It gets back to our origins as a company… our customers cared about
speed," Google’s director of community affairs, Matt Dunne, said about
why they are building Google Fiber.
Money will not exchange hands in the deal except for a nominal $1.
Instead, Google will take control and ownership of the iProvo network in
exchange for providing free basic 5-megabit Internet connectivity to all
of Provo’s residents for seven years. Google also will upgrade the
existing network and make sure that all homes have accessibility to it.
Finally, Google will offer free gigabit service to 25 public
institutions, including public schools and recreation centers.
But Provo taxpayers will still have to pay off a $39 million bond that
the city originally issued to build the network. With interest,
taxpayers still have to pay $3.3 million in bond payments per year for
the next 12 years.
Provo Mayor John Curtis also revealed Tuesday that the city will have to
front additional money that was not mentioned before.
The city will have to pay about $722,000 for equipment in order to
continue using the gigabit service for government operations already
using the network, such as the operation of traffic lights and police
and fire services. Meanwhile, Google will lease the network to Provo
city for free for 15 years.
The city also has to pay about $500,000 to a civil engineering firm to
determine exactly where the fiber optic cables are buried, a requirement
by Google. Curtis admitted that the construction company that installed
the fiber cables underground did not keep records of where they buried
all of them.
Finally, Provo has the option to pay another $500,000 for an insurance
policy to help mitigate any possible legal damages should Provo’s
network not be presented to Google as promised.
Curtis said the additional $1.7 million will come from an existing
network fund and there will be "no additional taxation from the residents."
During the hearing, residents expressed their excitement for the new
network, which will become available to citizens sometime this year.
Royce Van Tassell, vice president of the Utah Taxpayers Association and
longtime critic of another Utah municipal fiber-optic network, UTOPIA,
said, however, he wished more time had been spent to allow public
comment on the sale. The city only allowed five days for the public to
comment on the matter since the announcement of the sale.
"There are serious questions about the costs. Those kinds of question
have to be asked," he said. "That said, given all the situation, this is
a quantum leap. . .it’s probably the best we can do [with the
financially failing network]."
CenturyLink, an Internet service provider, also sent a letter to Curtis
asking for a 30-day delay on the vote, claiming the city did not give
ample time or opportunity for other competitors to submit bids for the
network.
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