The Provo Municipal Council has agreed to accept Google’s $1 payment, for the city’s iProvo fiber-optic network, clearing the way for the muni-fiber network to transition to Google Fiber, making Provo the third city to get the 1 Gbps Internet and pay-TV service.
Google will lease the network to the city for free for the next 15 years, but Provo will pay $722,000 for equipment to operate traffic lights and police and fire services, something for which Provo already uses the network. And, the Salt Lake City Tribune reports, Google also is requiring the city to pinpoint where the fiber is buried, something the contractor that initially installed the fiber apparently didn’t do. That’s another $500,000 tab. Provo also likely will pay an additional $500,000 to indemnify it from legal costs that might be incurred if Google discovers the network isn’t as promised.
Google announced the proposed deal a week ago on its blog. Provo joins Kansas City and Austin, Texas as Google Fiber cities. Deployment has begun in K.C., and Austin is slated to roll out in mid-2014; but, with fiber already in the ground, Provo could be online with Google Fiber before Austin.
The deal with Provo, taking over an existing municipal fiber network, is interesting in that it helps Google expand its Google Fiber play more cheaply than it could if it had to start from scratch as it did in Kansas City and Austin. Depending on the cost to bring iProvo’s infrastructure up to speed, which Google said it will begin shortly, acquiring cash-strapped muni-fiber networks could provide a new model for Google Fiber’s expansion.
There are more than 125 municipal fiber deployments across the U.S., most are small and targeted directly at business customers, but not all.
One that has looked to include residential customers, Chattanooga, Tenn.’s EPB Fiber Optics, has also been marked as a commercial success.
EPB Fiber Optics offers triple play services to a market of some 165,000 customers around the city. But for customers looking for 1 Gbps Internet speeds, it can be pricey. A gig connection that Google Fiber offers for $70 in Kansas City, for example, will costs Chattanoogans about $300 through EPB.
Right next door to iProvo, UTOPIA, a municipal fiber network that’s a partnership between 11 Utah cities, is at the opposite extreme from EPB. It’s been mired in financial woes since its inception, and has been actively looking for suitors. A UTOPIA spokesman said it’s spoken with several potential buyers, but not Google.
Like EPB, a 1Gbps connection to UTOPIA would cost customers $300 a month, plus $2,750 in installation and equipment fees. It currently has about 11,000 customers, but has the potential to reach 70,000, according to Broadband Communities Magazine, which lists several other large deployments, including:
LUS Fiber, in Lafayette, La. (57,000 potential customers).
CDE Lightband in Clarksville, Tenn. (55,000 potential customers). And, Chelan (Wash.) County Public Utility District (40,000).
As part of the iProvo purchase, Google has said it would commit to upgrade the network to gigabit technology and finish network construction so that every home along the existing iProvo network would have the opportunity to connect to Google Fiber.
That’s a big change from Austin and Kansas City, where Google Fiber is only being offered to “Fiberhoods,†geographic areas that reach a specific density of commitments to buy Google Fiber, to qualify for installation.
Google said Provo’s allure includes it’s high-tech DNA; the city, according to Google, ranks second in the country in patent growth and is home to a bevy of tech companies (Adobe just built a massive campus a few klicks up the road in Lehi).
Google has committed to provide homes along the fiber network a free connection to the Internet with 5 Mbps speeds (a la Kansas City) for at least seven years, for a $30 connection fee. Google also is offering Google Fiber Gigabit Internet and the option for Google Fiber TV service. The sugar? Google is providing free Gigabit Internet service to 25 local public institutions like schools, hospitals and libraries, again, following their strategy in Kansas City.
In Kansas City, Google is going head-to-head with Time Warner Cable, which has steadfastly maintained that it wasn’t worried, and saw the new service as just another competitor in a space where it’s top dog. In Austin, AT&T—which is the largest incumbent–has responded with a promise to deploy its own Gigabit service.
Provo is Comcast territory, and it will be interesting to see how the nation’s biggest pay-TV provider responds. Last year, as Google Fiber was beginning its deployment in K.C., Comcast execs simply said they would be watching the developments in that market—where they didn’t have a dog in the fight. In Provo, it’s a different story.
