UTOPIA has reacted to Google’s decision to take over Provo’s public fiber optic network by touting it as a vindication of its own business model. It “validates the vision our member cities have been working toward…” a statement on the consortium’s web site says.
That’s not the story I’m hearing from the people involved in the Provo deal.
Thursday morning I was part of a meeting between Provo Mayor John Curtis, Google officials Matt Dunne and Jenna Wandres and the Deseret News editorial board. Mayor Curtis was frank about where the city found itself with its broadband venture once known as iProvo. Ten months ago, the city put out a request for proposals, hoping to attract some group or entity to buy the thing.
“Originally, we wanted to sell it for cash,” he said. “But it became evident no one would pay cash.” The thing was worthless. “Potential buyers looked at the network and said it’s not worth anything.”
And why was it not worth anything? Because the technology the city bought with bond proceeds several years ago is now hopelessly outdated.
In a nutshell, this is the problem when public entities try to compete in a fast-moving industry such as Internet delivery.
Curtis can afford to be frank. It wasn’t his decision to invest in iProvo. When he took office, his challenge was to figure out what to do with it.
While the fiber optic cable the city had planted remained good, everything else about the system needed a serious upgrade. Curtis said he faced the prospect of either asking Provo residents to assume a lot more debt to bring everything up to date (only to watch it deteriorate again with time), or eventually having to shut it all down.
Instead, Google Fiber came along and saved the day, offering to assume the fiber optic infrastructure and make Provo the fourth city in which the Internet giant will provide broadband virtually free to anyone willing to pay a $30 hookup fee.
Google will assume all the risk and keep the technology up to date. It will not, however, pay off Provo’s 10-year-old debt obligations connected with iProvo.
The city still has to do that, and it’s a big reason why iProvo still was a bad idea. The city got lucky. If Google didn’t come along, it would be stuck.
UTOPIA stands for the Utah Telecommunication Open Infrastructure Agency. It is a consortium of 11 cities that have pledged a portion of their tax revenues to form a fiber optic network. It also has been in financial trouble from the start. Its subscription levels have remained below expectations, and it has repeatedly come to member cities asking for more money.
We asked the Google people about UTOPIA. They said it wasn’t the first time they had fielded that question since arriving in Utah to announce the Provo agreement. But they clearly haven’t been in discussions concerning any similar type deal.
Other officials told me privately it would be difficult, and maybe even impossible, to negotiate a Provo-type deal with 11 separate mayors and city councils. Provo has a built-in high-tech community ideal for Google Fiber’s model.
Good for Provo. In a little more than a decade from now its iProvo debt will be paid and it can move on. Who knows what the cyber world will look like by then.