The difference is before this deal they were paying that and getting very little in return. With this deal, they’re paying it and they’re going to actually see substantial value for that. —Mayor John Curtis
PROVO — With Wednesday's announcement that Google Fiber is expected to purchase the city's antiquated and embattled iProvo fiber-optic network, city leaders envision a future community where high-speed Internet service is as ubiquitous as electricity and running water.
Pending approval next week by the City Council, Provo would be the third U.S. city to get the Google Fiber treatment — which includes standard Internet service at no cost to residents with the option of upgrading to ultra high-speed one-gigabit Internet — after Kansas City, Mo., and Austin, Texas.
But while the agreement represents a significant investment on behalf of Google, its face value does little to mitigate the city's bond obligation created 10 years ago to create the iProvo fiber-optic network.
On Thursday, Mayor John Curtis said city leaders had initially hoped to sell the iProvo network for cash that could then be used to pay off the city's debt. But finding a buyer willing to make that agreement proved difficult.
"It became evident to us through a number of suitors that nobody was going to pay us cash for this network," Curtis said. "We pulled in every conceivable buyer that we could. One by one, they came and they looked at our network and said, 'It's not worth anything.'"
That led to a paradigm shift, he said, where the question was either to limp along with iProvo — meeting annual bond obligations for the next 10 years and shutting off the network after the debt was paid — or to find a way to give taxpayers a higher quality product for the money they were already spending.
"That doesn’t go away," Curtis said of the city's iProvo debt. "The difference is before this deal they were paying that and getting very little in return. With this deal, they’re paying it and they’re going to actually see substantial value for that."
Curtis said there will be a series of public meetings through Tuesday when the City Council meets to address any questions and concerns from residents. He also said council members were made aware of the negotiations with Google at an early stage to avoid any surprises and give them time to study the issue.
"I’m confident that as we go to our public and explain the details that there will be resounding support, as I am confident that the City Council will feel very strongly that this is easy to support," the mayor said.
Under the terms of the agreement with Google Fiber, the cost of connecting roughly 20,000 Provo homes that have not yet been attached to the fiber-optic network will be shouldered by Google, with homeowners being asked to pay a one-time activation fee of $30 to enjoy free basic Internet service for seven years.
According to initial estimates by the Utah Valley Chamber of Commerce, the cost of completing the remaining home connections represents a roughly $18 million investment by Google. Val Hale, president of the Utah Valley Chamber, wrote in a blog post that connecting all of Provo's homes, not including the cost of regular upgrades to the network, would likely be an impossible feat for the city.
The chamber also estimated that the free Internet service would save the average household $360 per year for a combined savings of $50 million for Provo residents over the seven-year agreement.
Matt Dunne, Google's head of community relations, said the ubiquitous nature of the service brings exciting possibilities to the city. He specifically mentioned education, saying that teachers could utilize technology to a greater degree and use their class time more efficiently, confident that their students have as much access to the Internet at home as they do tap water.
"When we complete this buildout, this will be probably the largest broadband-covered community in the country, if not the world." Dunne said.
For the upgrade to ultra high-speed one-gigabyte service, Dunne said the exact pricing has not yet been determined. In Kansas City, customers are charged $70 per month with the option of bundling with a cable television package for $120 per month.
Dunne said Provo's existing fiber-optic infrastructure was a key factor in the city being chosen for Google Fiber. Because the network is already largely in place, Google Fiber service is expected to be available to the first customers by the end of the year, he said.
"The big difference is that in Kansas City and Austin, we’re building from scratch," he said. "We saw a city that understood the value of speed and Internet connectivity."
But Dunne also said Google officials were impressed with the burgeoning technology job market in the Provo and Utah County area.
"Part of our excitement about Provo is the tech scene and tech community that is in this region," he said. "It really is extraordinary and it was one of the reasons we knew that this was going to a be a place that would push the envelope, because we don’t know yet what people will do with one gig."
Curtis also spoke about the potential for new business and innovation as a result of the Google Fiber service. He said the ultra high-speed connectivity allows residents and business owners in Provo to rethink what technological possibilities are available to them.
"This dialogue our city now gets to have about what you would do if you had a gig is really a fun dialogue," he said. "To an entrepreneur to say, 'You have no perceivable limits. What would you do with it?' is just remarkable."
The agreement with Google also includes ultra high-speed connectivity for Provo School District at no cost as well as 25 other sites to be determined by city officials. Curtis said there is potential in those connections for health care, Brigham Young University, Utah Valley University or entrepreneurial startups, but those conversations are only in the preliminary stages.3 comments on this story
Chad Duncan, Provo School District technology director, said the agreement with Google Fiber presents an opportunity for the educators to expand learning beyond the classroom. He said many students, particularly those from low-income families, do not currently have Internet access, making it difficult for them to use educational resources or school-issued electronic devices from home.
"A lot of the programs that are on these devices require Internet accesses," Duncan said. "Mostly we’re just thinking about the possibility it has in pushing all of these things out to the home."