Google Fiber in February beat out 13 providers in a fight to bring gigabit Internet to Huntsville, Alabama; never mind the fact Google was the only company that failed to meet an important city deadline.
Google officials reportedly told WAAY last year the company had no interest in Huntsville and wouldn’t bother to compete.
Then, according to WHNT, “shortly after the city’s deadline Google came calling.” Google changed course because it “was impressed by the city’s leadership.”
As Tennessee Watchdog reported, Huntsville officials chose Google Fiber to bring ultra-high-speed Internet to the city and gave the company the right to use its city-owned network to connect to homes and businesses.
Without that, Google Fiber officials would be forced to spend company money to lay out fiber.
Google Fiber spokesman A.T. McWilliams referred all questions to Huntsville Mayor Tommy Battle’s office. Battle spokeswoman Kelly Schrimsher failed to return several requests for comment this week.
Steven Titch, an independent policy analyst who specializes in information technology issues, said the agreement should make every Huntsville taxpayer nervous.
“Google came in after the deadline and negotiated a deal with very favorable terms,” Titch said.
“The residents of Huntsville, who are going to be on the hook for the cost of the $60 million fiber network, need to know exactly what Google is offering the city in return. It had better be good.”
In financing and building the fiber network, city officials are taking on most of the capital cost and debt liability, he says.
“On behalf of Google, the utility — by extension the Huntsville taxpayer — is funding a fiber network that will pass every home and business in Huntsville. For its part, Google only incurs a cost when it extends fiber that lasts 100 feet to homes and businesses who choose it as an ISP,” Titch said.
Google sees immediate return on its fiber investment, he says. It then has access to customer accounts and the revenue that goes with it. The company can use some of that information to refine its ad-based businesses, Titch said.
‘ROBUST COMPETITION UNLIKELY’
Huntsville Utility Board members selected Google Fiber, even though the public entity had nothing to do with the city’s Request For Information process when city officials sought providers, said Huntsville Utility spokesman Joe Gehrdes.
“Huntsville Utilities was not involved in the RFI process, and was not aware of who responded or what was proposed,” Gehrdes said in an emailed statement to Tennessee Watchdog.
The City Council appoints members of the utility board, Gehrdes added.
Gehrdes did not say why board members chose Google Fiber or what was said in deliberations. City Business Relations Officer Harrison Diamond, though, said all board discussions were announced beforehand and opened to the public.
The RFI that sought out Internet providers, Diamond added, was not the same as a Request For Proposals.
“An RFI is not an RFP. A Request for Information is basically a way for us to understand how solutions are available to solve a problem,” Diamond said.
“The RFI was not a contract of any sort. It also says any companies that submit are not guaranteed anything. The reason why we issued the RFI was to get ideas for possible models on how we could adopt something.”
Diamond and Gehrdes said Google Fiber is the city network’s first tenant to provide Internet service, and the agreement with Google is by no means exclusive.
“Any company is able to lease this dark fiber,” Diamond said.
“It’s just the first, and it’s not the last. I know for a fact that some companies have already expressed interest in doing this.”
But, according to a May 25 post on Muninetworks.org, which favors more municipal broadband networks nationwide, other companies may not have an easy go of it.
Christopher Mitchell, who directs the Community Broadband Networks Initiative with the Institute for Local Self-Reliance, says as much on that website.
“We believe Huntsville’s model and agreement with Google can be considered open access because any party could lease fiber from the utility to compete with Google. However, we believe the costs of doing so by using that network architecture make robust competition unlikely,” Mitchell said.
“If Google is a strong competitor in Huntsville, they will likely not face significant competition from other ISPs on the utility fiber, though AT&T and Comcast will still use their networks to compete.”
According to the city’s lease agreement with Google, Internet providers must pay $3,500 per strand for a high-density commercial fiber lease and $16,000 per strand for a low-density lease.
As reported, David Williams, president of the Washington, D.C.-based Taxpayers Protection Alliance, accused Google Fiber officials of rooting for municipal broadband networks because they know those networks are destined to fail.
Google Fiber, Williams said, cheaply buys those networks, as it did in Provo, Utah.
Titch said people should pay close attention.
“For Huntsville, it will take years to pay off the cost of running fiber down every street and cul-de-sac in town, assuming the debt doesn’t become unmanageable as it has in so many other places that have tried muni broadband. We’ll see how this plays out,” Titch said.
“I won’t be surprised if two or three years down the line Huntsville comes to regret this deal.”
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