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Unanimous: Provo Utah Council Approves Google Fiber
symbolset writes "In a unanimous vote the Provo Municipal Council has agreed to a plan to sell the city's troubled iProvo fiber Internet network to Google. Although this makes Provo, Utah the third city to embrace Google's ambitious gigabit fiber to the home plan the existing network will allow the residents of Provo to see faster installation than the others. Google had previously announced plans to proceed immediately on approval."
They city handed the network over for $1, but there are hidden costs, from the article: "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. ... The city will have to pay about $722,000 for equipment in order to continue using the gigabit service for government operations ... The city also has to pay about $500,000 to a civil engineering firm to determine exactly where the fiber optic cables are buried ... Google will lease the network to Provo city for free for 15 years."
Because it takes a special company to provide 'family size' bandwidth in Utah!
The city also has to pay about $500,000 to a civil engineering firm to determine exactly where the fiber optic cables are buried...
Wtf, don't they have the installation project plans in the first place? This is the kind of incompetence that really pisses me off.
`echo $[0x853204FA81]|tr 0-9 ionbsdeaml`@gmail.com
Because Provo already built out large portions of a fiber optic network. That's where the $39million bond comes from. However, they were having trouble administering it, and were losing a lot more money every year. What they are basically saying is, "here, take over this project for us and you can have all the profits." The city wants fast internet, and Google wants to make money providing it. Wikipedia has more info.
If you want SLC to have fiber, talk to the city council. Maybe they'll take up a bond and build it, too.
"First they came for the slanderers and i said nothing."
Not a bad deal, at least as far as Google goes. Considering what Google charges for the 7/yr 5mb service (which is just a $300 buildout fee), the city basically just covered the cost for that. Free gigabit service to 25 public institutions (schools, universities etc).. not bad. And Google is going to finish building out to homes that were not part of the original build contract. All in all, not bad. Especially if you look at iProvo's history - the city has been stuck with the bond payments the entire time, this just actually gets them something for holding that debt.
Why didn't they sell it to google for exactly what the current bond fees were?
Because then Google wouldn't have taken the deal. To the city, it was like this: they were losing something like $1million every year on the project, it was an albatross around the neck. Now Google says, "Hey, we'll get rid of that $1million loss for you and give you what you wanted in the first place."
Now, the city might have been able to get a better deal, that's what negotiation is about. But in the end, everyone is better off. Everyone is getting what they wanted. Which is how good business works.
Why not sell it to me for a dollar? Or for that matter to another commercial entity, who at least might actually be a little less evil?
Do you really think other telecom companies would be less evil? Really?
"First they came for the slanderers and i said nothing."
Why does it suck for the taxpayers, though? IIRC (and if it's the same deal here), the lowest tier of pricing is $0 per month after a $30 equipment fee. Everyone in the city would get fast (presumably reliable) fiber-based internet and have an operator with a vested interest in providing good service operating it while paying basically nothing more than the original tax obligation (plus $30/household).
Sounds like a way to make sure the money *wasn't* wasted to me
"Murphy was an optimist" - O'Toole's commentary on Murphy's Law
Wtf, don't they have the installation project plans in the first place? This is the kind of incompetence that really pisses me off.
Project plans frequently do not accurately document where the cable was actually placed. My father worked in engineering for AT&T for several decades planning jobs like this. He always had to go check what the plans said against what was drawn on the engineering documents. What the guys in the field do often does not match what the engineer designed. Furthermore since Google is essentially buying this cable they need to audit what they are actually buying. When you are investing millions of dollars you don't take anyone's word for it, you have someone go out and check to see that the actual infrastructure is something close to what the plans say it should be.
This is exactly the opposite of incompetence. This is exactly how a rational buyer should behave when buying an expensive asset.
I can tell you one that actually would be. It's called XMission. You've probably used their mirrors before.
XMission is a competitor that wanted to buy the iProvo system but lost to Google. My guess is they lost because the city trusted Google to be more competent with the project, since they'd been hurt by small contractors before (why exactly do they have to pay $500k to find out where the wires are?).
Here is what the XMission guy said about this:
""Even though Google is promising a number of upgrades to iProvo....Those upgrades will be paid for by subscriber fees, and Google will make a profit. They wouldn't be doing this otherwise, nor would I."
What about that sounds less evil to you? It sounds exactly the same, to me, potentially worse.
"First they came for the slanderers and i said nothing."
Would you believe that there are parts of the world where getting interest on loans is illegal?
Most of the time, when countries try to pass such usury laws, creative workarounds are found (otherwise no one would lend money or be able to get a loan). Europe in the Middle Ages was a great example. Though interest was technically illegal, you could still borrow with interest from Jews and certain Church organizations like the famous Templars (of course, this ultimately led to very bad backlash for both groups in the forms of pogroms, burnings, and other such unpleasantries). Usually they'll just charge you some sort of "administration fee" or "tribute" or some such shit that is basically the same as interest.
The cow says "Moo." The dog says "Woof." The Timothy says "Thanks, valued customer. We appreciate your input."