Google offers to buy iProvo FTTH network

Google and Provo, UT, Mayor John Curtis have revealed that Google has offered to buy the financially troubled iProvo fiber to the home (FTTH) network. The Provo city council will meet on the proposed sale Tuesday, April 23. If the sale is approved, Google hopes to begin serving at least some existing customers late this year.

According to the Salt Lake Tribune, the deal is a services swap that would require the city's tax payers to pay off the $39 million bond taken out to fund the network’s original construction.

iProvo, along with its Utah cousin, UTOPIA, was one of the earliest municipal FTTH efforts in the United States. Deployment of the open access fiber-optic broadband network began in 2004, based on a point-to-point Active Ethernet architecture (see “Utah's 'other' FTTP project rolls out”). However, the city’s return on its investment didn’t keep up with the costs to deploy it, and the city issued an RFP in 2007 to sell the network, consummating a deal with Broadweave Networks in 2008 (see “Provo announces sale of FTTH network to Broadweave”). Broadweave merged with Veracity Communications to create Veracity Networks in 2009, and Veracity has been supplying services over the fiber-optic network ever since.

However, Veracity hasn’t had any more luck turning a profit than the city did. The sale agreement included a surety fund that could be used to help pay network expenses; if that fund fell below $1.6 million, the city had the option of stepping in and taking action. The fund reached that low-water mark in 2011.

For this reason, most observers believe the sale will go through. “The iProvo network has been a financial disaster for the city - is there any way they would NOT vote for this deal?” tweeted Teresa Mastrangelo, principal analyst at broadbandtrends.com, yesterday.

Google says that if the council approves the sale, the company will finish network construction (approximately two-thirds of Provo residents don’t have access to the network, the Tribune estimates) and boost transmission speeds to 1 Gbps. Existing customers could receive Google’s free 5-Mbps Internet service for at least seven years after paying a $30 activation fee (plus taxes); 25 public institutions also would receive the free service, Google adds. Customers also would receive the opportunity to sign up for Google’s premium Internet and video services.

The announcement, coming shortly after Google announced it will bring its Google Fiber FTTH services to Austin, TX (see “Google Fiber coming to Austin”), has created speculation about where the company will go next. Some suggest that the UTOPIA network, which also has struggled financially, might be in the company’s sights. UTOPIA officials met with Google during the original RFI stage before the company selected Kansas City, KS, as its first deployment (see "Google meets with UTOPIA FTTH execs").

For more information on FTTx equipment and services, visit the Lightwave Buyer’s Guide.