Wednesday, April 17, 2013

Google Fiber


Today’s announcement that Provo City has reached an agreement with Google Fiber to purchase the city’s iProvo network encouraged us at the Chamber to do a little math.


While Google Fiber understandably has chosen not to divulge the precise figures of its anticipated investment in Provo’s network, our quick, “back of the envelope” valuation reveals just how significant the company’s investment in our community could be.

It is impressive and shows that Google Fiber intends to be deeply invested in our community for many years to come.

First, Google Fiber has committed to “finish network construction so that every home along the existing iProvo network would have the opportunity to connect to Google Fiber.” There are about 35,000 homes in Provo and only 9000 are currently connected.  From the city’s experience, connecting each new home costs Veracity between $600 and $1000 dollars.  So, to connect an additional 26,000 homes/structures at an approximate cost of $700 per connection would equal an $18 million investment.


That is a considerable investment in the network, and one the city would likely never had the ability to make. And that is not considering the unknown cost to upgrade all of the 10 year old, out of date equipment to allow the network reach Gigabit speed. This would be another impossible feat for a city-owned network in the near term, much less the equipment upgrades that are usually necessary every 5 years.

Second, the savings to Provo residents who opt for Google Fiber’s free Internet service is very powerful. Again, using our rough figures, approximately 35,000 residential customers could save some $30 a month (an average of monthly plans currently available for varying levels of Internet service) for a household total of $360 in annual savings. Even if only 20,000 of our households choose to take advantage of the free service, the numbers add up quickly. Multiply that $360 by 20,000 and again by seven years – the minimal amount of time Google Fiber intends to offer free Internet service – and we get $50 million of real value for the people of Provo.

None of this, of course, even begins to take into account the value to businesses and entrepreneurs of being one of the first communities in the United States with this super fast connectivity. If Kansas City is any model, we know that it will put us on the map once again as the ideal place for great employees and innovators.

The Utah Valley Chamber of Commerce is excited to welcome Google Fiber as a partner to Provo City, Utah County and the entire State of Utah. It is great for our business community, great for community and a great deal for all of us as taxpayers. I can’t wait to see what happens next.

Val Hale, President of the Utah Valley Chamber of Commerce

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