Google Fiber general manager Kevin Lo shakes hands with Gov. Gary Herbert on Wednesday.
There may come a time when household fiber-optic Internet connections are as basic as water and sewer service, but that is likely to happen only as a result of significant private investment, like the kind Google has chosen to make in the city of Provo.
The tech giant's decision to make Provo one of four cities nationwide where residents will be offered access to low-cost, high-speed Internet service is an exciting development that will further the area's growing reputation as a center for tech-related commerce and innovation.
It also will serve as a laboratory of sorts for testing the cost-benefit equations of building expensive infrastructure in anticipation of future demand. For a company like Google, spreading the means by which it can offer its highly profitable wares to more people in a more useable fashion is a smart investment. In the other cities where Google Fiber will debut – Kansas City, Mo., Kansas City, Kan., and Austin, Texas — the company will fund the entire venture. In Provo, it will piggyback on the foundation laid at public expense by the iProvo system, a government-sponsored fiber-optics venture that, until Google showed up, was struggling hopelessly to find a path to recouping its sizeable expenditures of public money.
Eleven other Utah municipalities have made similar investments in support of fiber connectivity through the Utah Telecommunications Open Infrastructure Agency, or UTOPIA. That venture has bogged its partners down in significant long-term debt, now exceeding a half a billion dollars, and its future viability remains suspect.
UTOPIA executives greeted the news of Google's Provo investment as validation of their original vision. However, UTOPIA's debt holders would likely be more willing to grant vindication should Google or another private entity show up with the wherewithal to take that network to fruition. UTOPIA says it has had conversations with potential partners in the private sector, but at this point remains on its own.
In years to come, it may turn out that efforts in Utah to lay the groundwork for such networks will have accrued significant economic benefits. As an early adopter, Utah may find itself ahead of the curve in creating the foundation for exponential growth in the digital economy.
Such is the vision of UTOPIA, whose business model is predicated on the theory of "build it and they will come." In Provo, Google has come, and it will build it itself, albeit on a foundation established with public outlays.
Despite the Provo experience, Google can't bail out all such ventures. Government has no proper in competing with private enterprise. If the Provo experience holds any lessons, it is that government is too cumbersome and inefficient to involve itself in such a fast-moving industry. Provo Mayor John Curtis told us the fiber-optic cables the city put in place remain usable, but all the technology surrounding them has become hopelessly obsolete.
The city, he said, would have had to shut down the network eventually or face another huge infusion of public funds. Google will not absorb the public debt already expended for that venture, but it will bring value to the system and keep it current with private funds.
In the meantime, there will be much worth watching as residents of Provo become hyper-connected in the broadband world, both in terms of the impact on everyday life, and in the realm of future economic development.