Google Fiber wants ‘backdoor corporate welfare,’ expert says

Google Fiber wants ‘backdoor corporate welfare,’ expert says

The people behind Google Fiber and its support groups may lobby for municipal broadband, but they ultimately want it to fail, the president of the Taxpayers Protection Alliance says.

TPA President David Williams says Google already gets corporate welfare costing taxpayers millions. But it wants to take things a few steps further.

Utility ratepayers —ultimately taxpayers — back municipal broadband networks.

As reported, Williams and others, including University of Colorado Professor Ronald Rizzuto, believe municipal broadband networks around the country, including those in Tennessee, lose too much money and are destined to collapse.

David Williams (photo courtesy of YouTube)

David Williams (photo courtesy of YouTube)

“When that happens, Google comes in like a white knight that saved the system,” Williams said.

Google, Williams went on, can buy an otherwise pricey municipal broadband network for pennies on the dollar, and taxpayers laud the company.

Google Fiber recently paid $1 for a $39 million municipal broadband network in Provo, Utah, after that system collapsed.

“Google is not a good guy here,” Williams said.

“They’re building their success on the backs of taxpayers. It’s not an upfront handout, but it is backdoor corporate welfare.”

Steven Titch, an independent policy analyst who specializes in information technology issues, says Provo’s municipal broadband failed because it took too long to build and, by the time it was ready to compete, wasn’t competitive.

Williams thinks Google plans to replicate the Utah deal elsewhere.

His evidence? The people who run Huntsville, Alabama’s municipal broadband network said recently there was no need for Google to lay its own fiber and, instead, could use the city’s network.

RELATED —  The TN grassroots group pushing for municipal broadband tied to public utilities, records show 

According to Artstechnica.com, other Internet Service Providers could use the fiber, too.

“What’s happening in Huntsville right now is what set off the red flags for me,” Williams said.

Google Fiber now operates in a few cites, such as Austin, without municipal broadband.

But Google executives are interested in setting up in Portland, Oregon and San Francisco — cities planning their own municipal broadband networks.

Google Fiber representatives did not return repeated requests for comment this week.

Deb Socia (photo courtesy of LinkedIn)

Deb Socia (photo courtesy of LinkedIn)

Google donates to a Washington, D.C.-based nonprofit called Next Century Cities, which advocates for towns and cities that want municipal broadband.

Williams said it makes no sense for Google to align itself with such a group.

“It stinks, because municipal broadband is supposed to be their competition,” Williams said.

“But the only reason for Google to get involved with Next Century Cities is if there’s an economic benefit and, in this case, they get to use taxpayers to build out their business.”

Next Century Cities Executive Director Deb Socia said she hadn’t heard the theory until this week, when Tennessee Watchdog asked her about it.

“That’s a stretch,” Socia said.

“Google is a donor, but they are not a major donor. They donate because we believe broadband is necessary infrastructure. Most of the money we receive comes from other foundations.”
Socia failed to say exactly how much Google donates.

According to Next Century Cities’ website, other donors include the Ford Foundation, the John S. and James L. Knight Foundation and the Open Society Foundation, all of which publicly support municipal broadband.

Regulatory breaks

Titch doesn’t think Google Fiber and Next Century Cities conspire over municipal broadband, but he does believe local governments give Google Fiber regulatory breaks they wouldn’t give to competing ISPs.

According to Artstechnica.com, for instance, officials in Louisville, Kentucky gave Google Fiber easy access to utility poles, despite objections from AT&T and Time Warner Cable.

“What happened in Provo with Google Fiber could play out again,” says Titch, adding that municipal broadband’s failure is inevitable.

“They are dealing with cable cutters as much as the cable companies. The revenues are flat or falling,” Titch said.

Steve Titch (photo courtesy of LinkedIn)

Steve Titch (photo courtesy of LinkedIn)

“That will put enormous pressure on municipalities, because their whole bond payback is built on average revenue subscribers in the neighborhood of $100 a month. If they don’t see those then there’s no way they survive.”

Williams isn’t alone in suspecting Google Fiber wants public assets so it can prosper.

Craig Moffett, senior analyst with the New York City-based MoffettNathanson, told Multi-Channel News that Google Fiber is looking for a variety of public-private partnerships.

“Their goal isn’t to see how many homes they can cover but to see how many homes they can prompt someone else to cover instead,” Moffett said.

Contact Christopher Butler at chris@tennesseewatchdog.org 

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