Taking on Provo failure proves Google is serious about FTTH

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You risk your mojo, you risk everything baby.

The troubled municipal fiber to the home system in Provo, Utah will soon be Google’s problem, assuming the city council signs off next week. The terms of the deal haven’t been released yet, but Google’s selling proposition is that it will connect all the homes along the existing fiber route and provide them free 5 Mbps Internet service for at least seven years. The only cost would be a $30 connection fee. Paid upgrades to faster speeds and television service would be offered, but not required.

The iProvo network passes substantially all of the 35,000 homes in Provo, but only about a quarter have chosen to hook up. The city first tried to operate the system itself, then sold it to a private operator, which also couldn’t pay the bills. So the city took ownership back again, and started looking for another buyer. Over the past seven years, the city has subsidized the system with tax money, fees on utility customers and surplus revenue from other municipal utilities.

Questions still to be answered about the deal include the level of responsibility Google will have for paying off $37 million in bond debt held by the city, the payments due the city over time and whether the city will continue paying subsidies.

Regardless of the terms, Google is proving it is serious about the fiber business by risking more than money. Its reputation is now at stake. The first two Google Fiber cities – Kansas City and Austin – were cherry picked. Bad results could be written off as successful experiments if necessary. But in Provo, the company is saying it can turn around a proven failure. Google is putting its mojo on the table, and that’s something it can’t afford to lose.

About Steve Blum

Steve Blum is president of Tellus Venture Associates, a management, planning and business development consultancy for municipal and community broadband initiatives. He is a 30-year industry veteran and an expert in developing new broadband infrastructure and services, including wireless, fiber optic and satellite systems.

His career includes playing key roles in the launch and growth of DirecTv in the U.S., as well as other satellite broadcasting platforms around the world. For the past ten years, he has helped build municipal wireless and fiber optic broadband systems. His client list includes many California cities, such as San Leandro, Palo Alto, Oakland, Los Angeles, Lompoc and Folsom. He’s a member of the executive team for the Central Coast Broadband Consortium and has worked with other regional consortia in California.

Steve is the author of seven books on the Internet and satellite broadcasting and is a frequent contributor to professional journals and industry events. He holds an A.B. in History from the University of California, Berkeley, an M.A. in East Asia Studies from the University of Washington, and an M.B.A. from the University of St. Thomas. He is a triathlete and multiple Ironman finisher, and is currently ranked in the top 100 of the Challenge Triathlon world rankings, out of more than 30,000 athletes.