Dusting off the cobwebs of broken promises, Google Fiber recently announced a plan to “partner” with West Des Moines, Iowa, to bring gigabit internet to that city. The partner in West Des Moines will be the taxpayers who will be subsidizing Google through taxes. Google’s current market cap is $1 trillion as they look to West Des Moines taxpayers to subsidize the project.
The company with once-grand internet plans has been rather dormant in the past few years, pulling out of planned projects in several cities, including a fiber installation debacle in Louisville, Kentucky.
The West Des Moines project would be similar to a deal Google Fiber cut with Huntsville, Alabama, in which the city builds the infrastructure and the company leases it.
The Des Moines Register reported that West Des Moines plans to invest $40 million in the public-private partnership. Google Fiber will get the first license, with other providers likely to be licensed later. That “investment” by West Des Moines actually means taxpayer subsidization.
Google Fiber would pay $2.25 to the city for each connected household, with a minimum payment of $4.5 million to West Des Moines over the 20-year agreement.
Just more than 770 miles southeast of West Des Moines, Huntsville TV station WHNT reported last October that construction was ongoing on the project in Alabama. Huntsville Utilities’ fiber project is supposed to be completed later this year. The city expects to reap about $7 million annually from Google Fiber when the network is fully operational.
Considering Google Fiber’s history, West Dew Moines may want to tread carefully.
Google Fiber is available in 18 metro areas, but the company pulled out of close to a dozen others. Perhaps no situation proved worse than in Louisville, a city eager to accommodate the company and its gigabit-internet plans that ended up with torn-up streets and big taxpayer bills.
In Louisville, Google Fiber used a technique called microtrenching that involved burying the fiber in shallower, two-inch-deep trenches in an attempt to save on construction costs. The company covered the fiber up with sealant, but many of those cables became exposed over time, which required the company to cover them up a second time with asphalt. Not only did this cause service interruptions, but residents also complained to the city about the conditions of their streets.
An op-ed by Joseph Gerth in the local Courier-Journal may have summed it up best: “We let you come in here and tear up our streets, and you reward us by tearing out our hearts?”
The Louisville Metro Council passed a one-touch, make-ready ordinance in 2016 to help usher in Google Fiber, but competitors AT&T and Charter sued, arguing the ordinance gave them little redress if equipment was damaged as the new rule allowed ISPs to rearrange equipment on utility poles on their own. The companies said the ordinance also violated union contracts.
The city spent close to $400,000 of local taxpayer money on contract lawyers to defend the ordinance.
The Taxpayers Protection Alliance reported in 2017 that Google stopped accepting customers in Kansas City although many residents had been on waiting lists for up to 18 months.
Google Fiber also stopped construction in 10 cities in which it had planned to build networks, including Chicago, Denver and San Francisco. Instead, Google Fiber purchased wireless internet provider Webpass to provide services to some of those cities. It’s not as fast as fiber, but it’s much cheaper to build.
Portland, one of the jilted suitors, created a franchise agreement that would have allowed Google Fiber to cherry-pick its customers. That agreement was signed after Oregon put into place a law that exempted gigabit internet from property taxes.
In another wrinkle, Google Fiber is reducing options for customers while signing deals that could crowd out competitors. As The Verge noted in December, Google Fiber eliminated its cheaper $50-per-month plan for new customers, forcing new signups to pay $70 per month for gigabit internet. The cheaper plan provided 100 megabit-per-second download speeds. While much slower than 1 gigabit per second, the lower tier provided speeds plenty fast enough for standard residential usage at a savings for households.
Telecompetitor speculated that this first Google Fiber project in four years could be a sign the company is shifting its focus yet again and may test other new markets.
The website noted that in a company blog post, Director of Corporate Development David Finn said that “when it comes to the internet, people in this country have been underserved for far too long. Cities and companies can work together to change that – and that’s our goal. And we’re excited to take the next step forward in Iowa.”