Struggling Provo Municipal Network Gets Boost from Google, Mayor Says

"For the first time since we conceived of this 10 years ago, we can realize the dream” of being a “fully connected city,” Curtis said. Only about 15,000 of the 35,000 households in Provo are connected to its existing fiber network, he said. Google has said it promised to connect the rest of the homes. For $70/month, the company will give residents 1 Gbps download and upload speeds. Or, for a $30 installation fee, every resident can get free 5/1 Mbps service for at least seven years, the company said. “I just came from an appointment and the receptionist said, ‘It can’t really be free. What’s the catch?'” Curtis said. “There is no catch. It’s pretty amazing."

When its municipal network was built, the city expected monthly revenue would cover operating costs, Curtis said, but it never did. The city tried selling the network to a private company that agreed to take over the $277,000 monthly bond payment, but the company couldn’t make the payments. Even when the city reduced the monthly payment to $190,000, that didn’t help, the mayor said. So Provo foreclosed and took the network back. The city had to add a $5.35 monthly charge to each household’s public utility bill. “My residents, of course, didn’t love that,” Curtis said. But they were “patient” while the city took a “very aggressive approach” to try to sell the network, he said.

The city put out requests for proposals and hired consultants to bring in potential buyers. The city “begged” telecom companies to come get involved, Curtis said. City Councilman Sterling Beck said he remembers opening up a phone book and dialing every telecom provider he could find and asking them to come down and take a look at the network. “They all just kind of stuck their nose up at us,” Curtis said. Prospective buyers came and looked at the existing fiber network, but decided “it’s not worth anything” because it was close to a decade old and “every piece of technology -- other than the fiber in the ground -- is very antiquated and needs to be replaced,” he said.

That’s where Google came in. Like the other prospective purchasers, the company saw the network and said there was no reasonable way to make a cash offer that everyone could feel good about, Curtis said. But Google made Provo an offer: If Provo handed over the installed fiber network, Google would replace the old equipment and bring it up to gigabit speeds. Existing speeds had been topping out around 20 Mbps, Curtis said.

"We will be upgrading almost everything that is not the fiber in the ground,” said Google Fiber spokeswoman Jenna Wandres. “That includes everything from switches to gear in equipment aggregation huts, to all of the devices in customers’ homes,” such as modems and routers, she said. “All of this equipment was almost a decade old -- we're going to replace it so that it’s new and gig-capable."

The monthly gigabit cost is expected to be fairly similar to Kansas City and Austin, Wandres said. But Provo citizens are getting a much better deal for the free version: Its $30 installation fee is just a tenth of the $300 installation fee in Kansas. Curtis said that’s because it already had fiber in the ground. Laying the fiber is the most expensive part of constructing the network, he said. It’s the most time-consuming too, he said: Because the fiber’s already there, “we'll beat Austin, clearly,” he said of the second major city chosen for Google Fiber (CD April 10 p10). Provo may even beat Kansas City, too, he said.

It’s not a done deal quite yet. The Municipal Council has to have a final vote at its Tuesday meeting to approve the contract and its terms, said the company and city officials. But city officials don’t expect any surprises, and have no outstanding concerns that haven’t already been discussed during negotiations, they said. Wandres said that, pending city council approval, deal closure within the next few months, and “extensive network upgrades,” the first customers could be connected by the end of this year.

City officials are thrilled about the opportunities they expect Google Fiber to bring to their city. “It has only been a few days since the announcement, and I have already been deluged with comments from professionals wanting to know when Google Fiber will go live and asking about Provo’s job market,” Beck told us. “I have heard from many that are planning to relocate to Provo solely based on its planned Google connection."

Beck expects “exponential growth” in the city’s “already healthy” start-up community, as the expected $70 monthly cost represents a huge savings for that kind of bandwidth, he said. In addition to attracting technology businesses and talented residents, fiber could lead to a Wi-Fi enabled downtown, he said in a blog (http://bit.ly/ZCGSWc). “While we haven’t heard anything from Google regarding their plans for public service, they have announced generous free, Wi-Fi connections for multiple locations like schools, hospitals, and community centers in both Kansas and Austin."

"We can make a lot of money” building out fiber, Google CEO Larry Page said during its Q1 conference call Thursday night. Senior Vice President Patrick Pichette said gigabit speeds will help write “the next chapter” of the Internet. “Speed matters,” he said. Even something as simple as waiting for three seconds for a YouTube video is “terrible,” he said: Fiber “goes a long way to solving a lot of today’s frustrations, independent of tomorrow’s.”