Google paid just $1 to set up shop in Provo.
Provo has reportedly sunk $39m into the project so far, but the network has never been profitable. In 2008, the Reason Foundation, a libertarian think tank, estimated that the city’s losses on the project had reached $8m and were still climbing.
Under the terms of the deal announced on Friday, Google will take the lossmaking network off Provo’s hands for the measly sum of $1 – this, despite the fact that the city must still make bond payments of $3.3m per year for the next 12 years to pay off debts related the original build-out, the Salt Lake Tribune reports.
Google will also take over management of internet and television service from Provo’s current network provider, Veracity Networks. The Google Fiber package doesn’t include telephone service, however, and the Chocolate Factory has hinted that it may allow Veracity to keep offering that.
In the return for the sweetheart deal, Google will provide city facilities with free gigabit internet service for seven years. Google has also agreed to connect the network to the remaining two-thirds of homes that are not yet wired up to it, in addition to upgrading some of the network infrastructure.
“Our fiber is still good, but they have to replace the infrastructure around the fiber. That stuff has been around for years,” Provo Deputy Mayor Corey Norman told the Associated Press.
The Utah Valley Chamber of Commerce estimates that Google will probably need to invest around $18m to complete these upgrades to the iProvo network – a fraction of the $94m it will have coughed up to build out its Kansas City network by the end of 2013
If you liked this article, please give it a quick review on ycombinator or StumbleUpon. Thanks
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.