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Provo City Council approves GoogleFiber deal

General Manager Kevin Lo of Google Fiber speaks during an event Wednesday, April 17, 2013, announcing that Google Fiber will be brought to Provo.
General Manager Kevin Lo of Google Fiber speaks during an event Wednesday, April 17, 2013, announcing that Google Fiber will be brought to Provo.
Ravell Call, Deseret News

PROVO — Provo's high-speed Internet and television service provided by Google Fiber has moved closer to being a done deal, but it's going to cost the city more than initially announced.

The Provo's City Council has voted unanimously to approve the sale of the city's nearly decade-old fiber-optic network to Google Inc., which will pay $1 to take over a system that cost $39 million to build.

Both sides need to sign off on the contract before it becomes final, said Google Fiber spokeswoman Jenna Wandres. The Mountain View, Calif., company has 180 days to take over the network after the city council approval.

Google Fiber officials announced they had chosen Provo last week, making it the third city in addition to Kansas City, Mo., and Austin, Texas.

Provo residents will get basic Internet service at no charge if they pay a $30 hookup fee, and they can get a much faster, gigabit connection for a yet-to-be-determined monthly fee that will likely be close to the $70 charged in Kansas City.

Provo officials revealed Tuesday that it will cost the city an estimated $1.7 million to get the system built in 2004 ready for the handover. The money will come from an existing fund that had been set aside to upgrade the system eventually, said Provo deputy mayor Corey Norman. That means it will require no new money from taxpayers in the city of 115,000 about 45 miles south of Salt Lake City.

Norman compared the investment to money a homeowner would pay to fix up a house to get it ready to sell on the open market.

The figure includes $500,000 to pay a company to locate existing fiber-optic cables. The private company that had been running the network neglected to keep a map of where the cables run, making the re-mapping necessary, Norman said.

City officials said they will also need to spend an additional $500,000 for an insurance policy to cover the millions it would cost to make repairs if the remapping discovers that cables have been moved, damaged or tinkered with, Norman said.

The remaining $700,000 is to upgrade a small portion of the network the city is going to lease from Google to get it ready to handle gigabit speeds.

The investment may seem like a lot, but it's a tiny fraction of what Provo would have had to pay to maintain and upgrade the failing system had Google not swooped in, said Val Hale, president of the Utah Valley Chamber of Commerce.

"To have Google come in and offer this solution with a very limited investment on Provo's part was really an answer to their prayers," Hale said.

Residents will continue to pay $5.35 a month on their utility bills for the system — whether they use it or not — to pay off a $32 million bond that will take about 12 years to repay, Norman said.

Despite the monthly fee, residents and small-business owners in Provo are ecstatic about Google Fiber coming to Provo, Hale said.

But CenturyLink Inc., which provides Internet service in the area, is not pleased with the city council's decision. Company officials sent a letter to Provo saying they were not made aware the city was shopping the system. Norman said that's not true, and that the city has the documentation to prove it.

Google hopes to begin installing the network in the first homes and neighborhoods by the end of 2013, Wandres said.