Published April 18, 2013
SALT LAKE CITY – Google will take over a troubled municipal fiber-optic system and make Provo, Utah, the third city to get its high-speed Internet service via fiber-optic cables, the company announced Wednesday.
Google Fiber was rolled out in Kansas City, Mo., last year. The Mountain View, Calif., company announced earlier this month it will make Austin, Texas, the second city to get ultra-fast Internet service.
The Provo deal is the first time Google plans to acquire an existing fiber-optic system. The city of 115,000 created the fiber-optic network, iProvo, in 2004. It planned to operate the system itself for Internet, television and phone service but found the operation too daunting and turned it over to a succession of private partners that have struggled to break even.
A Google official said the company will offer basic Internet service at no charge to Provo residents, who can opt to pay for service up to 200 times faster. The system also provides cable or satellite TV service.
"Once connected, Provo will be one of the first cities in the world where access to broadband will flow like water or electricity," Kevin Lo, general manager of Google Fiber, said Wednesday.
The rollout is an expensive undertaking and gamble for Google, which hopes it will drive innovation and pressure phone and cable companies to improve their networks. Google benefits when people spend more time online.
Provo officials said Google will charge customers a $30 activation fee. The free service provides speeds of 5 megabits per second. Google didn't say how much it planned to charge for faster service, but it would hook up schools, hospitals and libraries to the faster service at no charge.
In Kansas City, Google charges customers $70 a month for a gigabit connection, which is 1,000 megabits per second. For another $50, customers there can also receive a cable TV-like service that offers a channel lineup featuring mainstays such as ESPN, Nickelodeon, FOX News and MTV, as well as HBO and Cinemax.
Google Inc. said more than 1,100 cities applied for its services starting in 2010, and some used gimmicks or elaborate videos in hopes of outshining the competition. Topeka, Kan., even informally renamed itself "Google, Kansas."
Kansas City wound up prevailing, and Google began signing up residents there last year. By the end of 2013, Google expects that 180 neighborhoods that were selected for service based on demand will be completed.
The $70 fee in Kansas City is more than what cable or phone companies charge for basic Internet service, but the service is also much faster. Gigabit speeds are generally unavailable from other companies. One exception is the city-owned electric utility in Chattanooga, Tenn., which has pulled its own fiber and sells gigabit service for $350 per month.
Provo, about 45 miles south of Salt Lake City, is home to Brigham Young University, which is operated by The Church of Jesus Christ of Latter-day Saints, and is where LDS missionaries are trained for service.
Provo's fiber-optic system is currently connected to only 9,000 of 35,000 homes, and Google said it would finish the work and upgrade the system to handle more traffic at higher speeds.
It will cost Google at least $18 million to build out the system, said Val Hale, president of the Utah Valley Chamber of Commerce. Google didn't offer any figures of its own.
Provo's fiber-optic lines already run under streets. Making a connection from street to home costs $700, chamber officials said. They said Google's free basic Internet service will save households about $30 a month.
Provo Mayor John Curtis was elated. He noted the city was seeking yet another buyer for the fiber-optic system when he approached Google about taking it over.
"When I came into office, iProvo was deemed to be the single biggest problem facing Provo," Curtis said. "The first step was to address the outstanding bond on the network, which we've done. Now, we're able to realize the dream of providing reliable access."