Last week I mentioned the concerns over the $1 sale price of the iProvo fiber network to Google. Well, the Provo Google Fiber project continues to get even stranger than that. From the Daily Herald article on the Provo city council vote:
Curtis also introduced new information and obligations that had not been discussed during the initial excitement of last week. There will be a need to spend some money. For one, the map on where the fiber conduits are actually laid is not available and it may take some guessing at a few locations as to what side of the street the fiber backbone is under. There is also an agreement the city will have control of the fiber to the schools and the city operations. Money has already been set aside from the telecom fund to take care of those needs. An insurance policy will also be needed to protect the city from the unknown. The total cost for city outlay will be approximately $1.7 million.
Emphasis at the end is mine.
A more detailed breakdown was reported by The Salt Lake Tribune:
- $722,000 “for equipment in order to continue using the gigabit service for government operations already using the network, such as the operation of traffic lights and police and fire services.”
- $500,000 “to a civil engineering firm to determine exactly where the fiber optic cables are buried, a requirement by Google”
- $500,000 “for an insurance policy to help mitigate any possible legal damages should Provo’s network not be presented to Google as promised”
Of course Google is paying Provo $1 for the network, so the real cost to Provo for selling their existing fiber network to Google is only $1,721,999. Still a fair bit money to pay someone to take an asset off your hands.
Then there is the issue of not even knowing where all of the fiber in the ground actually is. Didn’t they have to file permits with the city when they installed it in the first place? If they moved it later on, wouldn’t that require getting permits from the city as well? For something that they paid $39M for I would have thought they would keep a close eye on it.
The Salt Lake Tribune also reported numbers on how much is still due on the original $39M in bonds:
With interest, taxpayers still have to pay $3.3 million in bond payments per year for the next 12 years.
For a total of $39.6M that Provo will have paid out over the next 12 years.
This story may still have a happy ending. If Google Fiber in Provo blossoms into everything it could be, then all of this may have been worth it.
The money thing doesn’t really freak me out though. What really freaks me out is that the city of Provo has connected “operation of traffic lights and police and fire services” to the same fiber network that connects to the Internet. That strikes me as a really, really, really bad idea.
6 replies on “Google Fiber in Provo Gets Even Stranger”
Provo could and should have negotiated a better deal. Google would still make bank on it even if they had assumed the bond payments. As it stands right now, Google is effectively getting to lease the network in perpetuity at no monthly cost for a $1 security deposit and $19.7M in closing costs (of which Provo pays $1.7M). The real question remaining is if this deal will generate an additional $24.8M in tax revenue over the seven-year commitment to make this break even. I’m slightly pessimistic on that front.
Obviously I’m not privy to how the negotiations between Provo and Google went. From the outside it certainly seems like Provo could have received some amount greater that $1 from Google.
I think there is a possibility that Provo still comes out ahead on the money issues after all of this. Guess we won’t really know for another 12 years when the bonds are paid off. Of course by then Google may have sold the fiber network back to Provo for $1. If that happens, well, who knows where it would end up.
In regards to not knowing where the fiber is, you have to remember that the network has been owned by three different private users and there was a period of about four years where Provo didn’t have any control of it. As a result, the city is now mapping changes made by the previous owners.
Also, regardless of cost, the city is stuck with a $39m bill. Where before we were getting very little for $39m, now we are getting much more.
Wouldn’t each of the owners of the network need to file permits for the work involved in moving the fiber? Could be that they don’t I suppose.
On the $39M, I agree, and I think it is possible that Provo still comes out with a net win in all of this. Won’t know for sure for several years.
There is almost certainly nothing wrong with traffic lights and things being connected to the same fiber plant. You’re confusing layer 1 with layer 3.
It’s akin to complaining that your company’s T1 runs on the same copper network as your neighbour’s phone sex line. 🙂
The copper runs side by side, but there is no actual network crossover at all. Same in the case of this fiber. They’ll just have built a big private ethernet/IP network with it to link up all of the city services. It’s very standard, and quite secure.
Not exactly.
There are several factors at play. If you assume that they are using VLANs without separate fiber, then that is only as secure as the devices implementing the VLANs. But running over the same fiber has other problems. It is one thing if a neighborhood looses Internet access because of a fiber cut, it is another thing if police loose a portion of their communication due to that same fiber cut. Having separate fiber runs would reduce the collateral damage.
Next, they already admitted that they didn’t know where some of the fiber line actually was. This is infrastructure that they are using for traffic signals and police, and they don’t know where it is. At least part of the reason for that is that iProvo infrastructure has had various owners over the years. If there were separate fiber runs for traffic signals/police then then they wouldn’t have to keep including those pieces in the sale of this infrastructure.
Just because you can potentially use a single set of fiber infrastructure for everything, doesn’t mean you should. Having redundant connectivity for critical things like public services just makes sense, not having it is eventually asking for problems.