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When Google Fiber Comes to Town

We knew what we wanted to articulate to the rest of the world when the world was watching.

This is the second story in our three-part series on Mayor John Curtis and Provo City. Read Part I.

When we last wrote about Provo Mayor John Curtis he was trying to overcome growing opposition to route Option 4 of the Bus Rapid Transit (BRT) project, but resistance was coming from multiple factions throughout the city.

In a 4–3 vote, the Provo Municipal Council rejected Option 4; those who were once for the project were coming out against it; and one Provo resident even submitted a Letter to the Editor of the Daily Herald titled “Question for BRT: What is the fundamental unit of society” wherein he referenced the LDS Church’s proclamation on the family while arguing “the family unit is under attack right here in Provo,” and that Option 4 was “the single most powerful attempt yet to uproot traditional families from their homes.”

To say BRT’s future looked bleak would be an understatement. With the Utah Transit Authority sending strong signals it would much rather abort the entire BRT project than compromise on Option 4, we closed our most recent story on Curtis by stating: “if he manages to pull BRT out of his hat and gets the project back on track, Provo residents should just start calling him ‘the magic man.’”

Well, folks, try to understand. Try, try, try to understand. He’s a magic man. (Remember the 1970s rock band Heart?) In a move considered miraculous by some, last week the city council passed a resolution designating Option 4 as the best route, unless a study conducted by an outside engineering firm proves otherwise.

The study will cost taxpayers $70,000 with the possibility of having to fork over an additional $20,000 if the firm decides to create a model of 700 North and 900 East. A pricey compromise, to be sure, considering Option 4 seems to be a foregone conclusion at this point (the Mountainland Association of Governments has already said they would pull their funding for the project if the city doesn’t move forward with Option 4, and the UTA has indicated it’s not really interested in alternative route Option Zero), but the mayor must consider the cost of the study to be a small price to pay in order to salvage BRT and the $150 million in funding currently backing the project.

As mentioned in our first story on Curtis, we requested an interview with the mayor because we wanted to learn more about the city’s deal with Google Fiber and what Provo is doing to promote local startups. We felt obligated to ask about BRT because it was on the front page of every local newspaper. With the project back on track, we’d like to turn our focus away from BRT and delve into what Google Fiber coming to town means for Provo City.

In 2004, Provo announced it would begin construction on iProvo, a municipal fiber network that promised to be a cheaper, better solution compared to the services being offered to residents by the incumbent phone companies and cable providers.

“The iProvo network is a pioneering feat for Provo and for its citizens,” Mayor Lewis Billings said at the time.

When the network officially launched in 2006 it was received with great fanfare and excitement.

The iProvo project did, however, have its detractors.

“We think it’s improper for the government to gamble with taxpayer dollars to compete with private industry,” Vince Hancock, spokesperson for Qwest Communications, was quoted as saying at the time.

Two years after the network’s official launch it was clear to everyone that Provo’s gamble had not paid off. In 2008, the city reported a loss of $8 million dollars, which had accrued over a number of years since construction on the iProvo project began.

That same year, the city announced it had reached a deal with Broadweave Networks, a Lehi-based fiber-optic service provider, to sell the network for $40.6 million.

“We believe this is a good deal. A good deal for Provo and a good deal for Broadweave,” said Billings.

While in the process of selling iProvo to Broadweave, the city refused to release documents to the public regarding the negotiations. As a result, the Utah Headliners chapter of the Society of Professional Journalists awarded Provo with the less-than-flattering Black Hole Award.

Worse still, Broadweave was no longer able to consistently make its monthly payments to the city. Broadweave was then acquired by Provo-based Veracity Networks in order to keep the company solvent.

In an effort to salvage the sale of iProvo, the city agreed to float some of Veracity’s bond payments over a 10-year period.

Despite that sweetheart deal, Veracity defaulted on its payments in 2012 and the iProvo network was returned to the city.

By the time Mayor Curtis arrived, the iProvo network was a lost cause with very little hope and seemingly no good solutions to the problem.

“We put our network up for sale, to anybody,” said Curtis. “We got zero offers. Time and time again what they did is they came and they looked at it and they said I’ve got bad news for you, your network’s not worth anything. And the reason for that is it was 10 years old. Every switch, everything but the fiber in the ground had to be replaced. It’s about half the cost of the network.”

On April 17, 2013, in what was hyped-up as an “epic announcement” by the mayor’s office, Provo City announced Google had purchased iProvo for $1. Provo became just the third city in the United States to receive Google Fiber.

In a blog post after the announcement, Curtis wrote, “This is, as they say, ‘big news.’ It allows us to finally implement a viable solution to the city’s ongoing iProvo troubles, a personal goal of mine since taking office. But it’s much bigger than that. This agreement, if ultimately approved by City Council, means Provo will be one of the first cities in the world to have universal Internal connectivity in nearly every home.”

The city is still responsible for iProvo’s $39 million bond debt; paid $722,000 for equipment that would allow it to continue using the original iProvo-laid fiber; and forked over an additional $500,000 just to figure out where the fiber cables were located. (That last one is so unbelievable it’s worth repeating: $500,000 just to figure out where the fiber cables were located.)

The city’s deal with Google did not include revenue sharing, which means Provo will have to come up with a different source of revenue to pay down the massive debt iProvo accrued over 10 years.

“Provo City said look, we’re going to take the speed, the low price, and ubiquity and we don’t think in our heart there’s a model that revenue shares or we would have gone for it,” said Curtis. “We looked, that’s what we did, first we looked for all of that. Would you rather have revenue sharing or internet for all of your residents?”

Google Fiber isn’t open access, which some have criticized because it doesn’t allow other broadband companies to compete on the network.

“As far as open access, I don’t have a strong opinion on that,” said Curtis. “Would it be nice? Potentially. What are we missing for it?

“You know, the big players had a chance to come onto our network and they didn’t. We’ve been there, done that, and it didn’t yield us anything. They’re not lining up to come hop onto this network.”

Jesse Harris, Editor of FreeUTOPIA, believes competition is vital to a fiber network’s success.

“When Google stops feeling competitive pressure, the realities of operating a low-margin utility set in, and they focus on generating buzz in new markets, not existing ones, what then? I posit they start becoming very Comcast-like in their user experience. Competitive pressure is the only way to keep that from happening. UTOPIA has it; Google does not. Once the high wears off and reality sets in, Provo is going to have one heck of a hangover,” said Harris.

Curtis believes the publicity Provo has received since announcing its deal with Google Fiber far outweighs any concerns about open access, or revenue sharing. The amount of free press the city received has already begun to attract businesses, entrepreneurs, and residents to Provo.

“And you’d have to say what would you spend for that kind of notoriety for your city? Fortunately, we changed our city branding and we were ready for the publicity,” said Curtis. “We were ready to talk about downtown. We were ready to talk about our quality of life. We knew what we wanted to articulate to the rest of the world when the world was watching.”

It’s hard to argue with Curtis on that point. Ever since Google came to town, Provo seems to have a renewed energy and focus. More than anything, though, Curtis believes Google Fiber will have a significant impact on the lives of Provo residents.

“It’s speed, affordability, and everywhere and so those are the game changers and in Provo the Google deal will allow everybody — everybody — to have free internet. Now, it’s not killer speed, but the kid coming home to do his homework doesn’t need killer speed. The mom and dad getting on to look up job openings at Walmart, they don’t need speed. They need internet and they need it at a low price,” said Curtis.

Unless a Provo company is currently a Veracity customer, Google Fiber is only available to residents at this point, not businesses. Curtis believes that will change soon.

“I think we’re close,” said Curtis. “I’ve learned with Google that they’re very safe with their image and so they’re not going to come out and say it will be on this date and then miss it, and so they’ve been very conservative. And so it’s coming and we just are all anxiously awaiting.

“Interestingly, probably the biggest problem with Google Fiber is we have no patience. They only bought the network last July. It’s literally been eight months since they bought the network and people are upset because they don’t have certain channels in their TV lineup. I just say guys you’ve gotta understand. It just takes a little bit, it’s been less than a year. And that’s what I would say to business owners. It’s coming. You got a little dose of patience and it’s going to be awesome when it comes. That’s the thing that Google has shown is that when it comes it will be awesome. They don’t do things part way. Their business offering, I have no doubt, is just going to knock the socks off businesses.”

Curtis is also preaching patience when it comes to Google Fiber TV offering Root Sports, the TV channel that broadcasts every Utah Jazz game.

“There’s no way we’re going to go very long without Root,” said Curtis. “Be patient, it’s been since July. I just say thank goodness it’s a stinker year for the Jazz. I mean, holy cow, if they were vying for the title I’d be a dead man, right?”

Despite its many headaches, Curtis clearly enjoys being Provo’s mayor. He understands there are rarely easily solutions to some of the city’s biggest problems, but he attacks each challenge with a renewed vigor and a genuine love for the city he oversees.

“The quality of life that you can experience here, the recreational aspect, once you’re done with work, what have you got? It’s hard to beat in this area,” said Curtis. “That’s why I think things like FrontRunner and some of these transit projects are really important because they’re just an overall quality of life issue, and they also help facilitate workers coming in and working here and things like that.

“To me Google Fiber is probably the single largest game-changer to that dynamic because people want to live where they can go home and have 1,000 megs. So, we’re working hard to put in infrastructure and benefits that will keep a company here, and then we’re also working hard to emphasize and develop this quality of life issue that somebody says you know I’m not willing to pass up on this because I just love living here.”

The final story in our three-part series on Mayor John Curtis and Provo will cover what the city is doing to promote local startups and the mayor’s future political ambitions. Stay tuned.

Published 3/13/2014