Provo council approves FTTH system sale to Google

23 April 2013 by Steve Blum
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Provo’s newest resident.

In a series of unanimous votes, the Provo municipal council voted tonight to approve the sale of the city’s fiber-to-the-home network to Google. The benefits to Provo and its citizens – free (more or less) Internet service for at least seven years, connections for city and school facilities and millions of dollars invested in finishing the build out of the system – were praised by the council and members of the public.

A few probing questions aside, the only sour note was sounded by CenturyLink, the incumbent telephone company. It had earlier asked for a delay, which the city attorney thoroughly picked apart and the council shrugged off.

It seemed to me that there were mixed emotions about it. Council members all spoke in support of the sale, but also characterised it as the best deal they could get. Not necessarily the deal they wanted.

Provo floated an request for proposals a year and a half ago, looking for a buyer who would pay several million dollars, allowing the City to pay down its bond debt. During this evening’s discussion, the point was made several times that none of the companies that expressed interest were willing to pay much, if anything, for the system. Some, it was said, wanted Provo to pay them to take it.

In transferring ownership, the City caps its losses and liabilities, and gets rid of what one council member called “a millstone around our neck”. The well-founded fear was that Provo would have to borrow even more money to maintain and upgrade equipment and service.

“What we were doing was not sustainable,” said John Curtis, the mayor of Provo and lead negotiator for the deal.

Provo residents are still on the hook for about $37 million that was borrowed to pay for initial construction costs. Those bonds are guaranteed by sales tax revenue and not by the FTTH system itself. Residents will continue to pay an extra $5.35 per month on their utility bills until the bonds are paid off.

The very first question asked by a member of the public was whether that fee would go up. “We’re safe in saying that will not happen,” Curtis replied.

City of Provo documents as approved by the municipal council on 23 April 2013

Main contract between Google and City of Provo, including most of the other documents below

Franchise agreement

Agreement to provide dark fiber to the City

Agreement to provide Internet service to the City

Pole and conduit lease

NOC lease agreement

Structure attachment lease

Council agenda and packet with background information

Draft council resolution authorising the sale

Draft council resolution authorising the franchise agreement

Draft council resolution authorising the NOC lease