Unanimous: Provo Utah Council Approves Google Fiber 130
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."
Re:Should have been the University of Utah (Score:5, Insightful)
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?
Re:Should have been the University of Utah (Score:5, Insightful)
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
Re:Should have been the University of Utah (Score:5, Insightful)
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.