Salt Lake City is About to Make a Broadband Blunder

This article is cross-posted at Beehive Startups.

I've made a huge mistakeSalt Lake City just can’t seem to make up its mind on broadband. Given the chance to join UTOPIA in 2004, Mayor Rocky Anderson turned down the offer citing “risk [to] taxpayers’ money”. His successor, Mayor Ralph Becker, similarly waffled, giving a response that neither closed the door nor endorsed the idea. In that time, much of Salt Lake City has been unable to get CenturyLink’s ADSL2+ service (with speeds up to 40Mbps down), often getting a meager 3Mbps on vanilla DSL. As a result, Comcast doesn’t offer the same high-speed packages it does in areas with better speed choices, sometimes maxing out at 25Mbps. The reluctance to make a bold choice to improve the city’s infrastructure has cost residents dearly.

Now it appears that SLC is about to double down on those past mistakes. Google revealed that they’ve been in talks with Salt Lake City to extend Google Fiber from Provo into the city. While Salt Lake City officials are claiming that “no tax dollars” will be involved, it’s well-known that Kansas City provided a lot of concessions to Google worth millions of dollars. Provo effectively gave Google an indefinite lease on the network for $1 plus $18.7M in closing costs. We don’t know what Austin provided yet, but we can probably take a guess. Google loves it some public funding but without all of that pesky partnership business.

And what does SLC get from the deal? Sure, they get gigabit, but not with great terms. If you don’t sign up during the initial push, you’re forever cut off from the network. Kind of sucks for renters and new move-ins. Don’t like how Google does things? They’ll be the only gigabit option in town. If Comcast and CenturyLink hurt enough, they could effectively withdraw from the market and leave Salt Lake City with a real monopoly. Can’t afford $70 per month? Too bad; there’s no alternative pricing plans like UTOPIA’s 100Mbps for around $35. And if history is any indication, Google won’t sign a contract with the city for longer than 7 years. They reserve the right to get bored and just turn off the network when it runs out. Compare that with the 30-year deal that UTOPIA has been working on with investment bank Macquarie Group. The only reason Google Fiber sounds good is because you’ve been in an abusive relationship with Comcast and/or CenturyLink for far too long.

Given the stark differences between how UTOPIA and Google Fiber operate, how badly Provo was jobbed on its deal, and how much better a deal UTOPIA was able to negotiate, you have to wonder how there’s even a debate about the choice between dealing with Google or joining up with UTOPIA. It seems that Salt Lake City’s elected officials, mayor and city council alike, are too cowardly to do what’s best for the city instead of what’s best for their next election.

Tagged , , . Bookmark the permalink.

24 Responses to Salt Lake City is About to Make a Broadband Blunder

  1. Carl Woldberg says:

    I know it’s been said thousands of times but I’ll say it again. High speed (and I define high speed as 50 Mbits or more in both directions) Internet access will become, and for some of us already is, as necessary as water, sewer, roads, electric power, and telephones. Why would Salt Lake City give control of that important resource to Google, an unregulated, for-profit business?

    That said, if Google can provide their services with no money or concessions from any government agency then let them go ahead. But not a dime of public money should be used to help Google provide another closed, profit-making, communications network. Other than higher speeds they are no better than CenturyLink or Comcast.

  2. John T. says:

    Hey, I’d happily sign up for Utopia if my city (Taylorsville) were covered. I’d prefer it over Google because it’s more local, and yeah, because of that $35 option. I don’t need gigabit internet.

    But if Google Fiber were to show up in my city and Utopia didn’t, I’d suck it up and pay for them instead, to get away from my current provider.

    • Stenar says:

      Right, and the “more local” UTOPIA is being taken over by an Australian firm, although it will apparently offer revenue sharing to cities.

      • Jesse says:

        That’s a curious argument. The local cities are retaining ownership. Most of the ISPs are local companies (XMission, Veracity, Sumofiber, Infowest, Beehive, Brigham.net, FiberNet, etc). So what if the loan money is coming from a non-local source? Would you say that UTOPIA is currently “less local” because the bank holding the current bonds isn’t from Utah?

  3. Chris Conder says:

    that is what is happening in the uk, we have brave altnets like gigaclear (our utopian equivalent) and the city fathers help the incumbent squash their projects and won’t support them in any way. I think that they forget who they work for, they work for us, the people and we should be able to trust them to get us the best service. Its good that google want to come in, nothing wrong with fair competition, but its daft when they already have a home grown solution they could support and instead choose to help a big company like G. Utopia would provide a better and more local service, employ local people and keep the dollars local.

  4. Pingback: UT: Salt Lake City is About to Make a Broadband...

  5. John says:

    Can’t afford $70? How about Google’s free 5mbs option? And only a $30 connection fee. And no municipal bond obligations. Sounds like a great deal to me.

    • Jesse says:

      The connection fee in Provo was $30 because they purchased an existing network. Kansas City, which is a new build, charges $300.

      • Stenar says:

        In the early days,it was $300 to connect. Now Google charges $30 system wide. $300 to connect is still better than what UTOPIA was charging to connect at one time, approximately $2500.

  6. Brad says:

    Google fiber has brought greater competition to Austin. AT&T the only provider before google, now offers faster speeds at a lower cost than before and a new company is laying their own fiber network. This gives you three options.

    I agree, UTOPIA would be the way to go and wish SLC would have joined. Maybe having this conversation about google fiber might open that door.

  7. Bret Dayley says:

    I was on iProvo and the service providers SUCKED! None of the service providers on Utopia thrill me. What good is an open network if no service provider delivers good services and service? What I can consume is what matters not that there’s a pipe for a bunch of crappy provides to offer me crappy services and service.

    I’m very pleased with GF + TV so far.

    • Stenar says:

      Yes, and iProvo was nearly dead and no company was willing to do what was needed to be done to make it robust. Provo was lucky that Google stepped up to the plate.

  8. Jeremy Neish says:

    I understand that in a perfect world everything would be open access, and I’ve been a HUGE proponent of UTOPIA. (Before the management was taken over by old school T1 hawkers.) But I really don’t understand Jesse’s hatred toward GF. Life is full of tradeoffs, and Google understands the dream of what broadband is supposed to be about. Excellent service, speeds no caps and features at a low cost, even free for basic service. There’s very little to not love about that. I sense a bit of jealousy, or maybe not, maybe you are just very dedicated to the idea.

    That’s cool, but really Google Fiber is a great deal that nearly everyone is begging for. Let the city give some concessions to get it. I’m cool with that. Having GF in Salt Lake means I’m not trapped in Provo for the rest of my life. :)

    Also, I’m pretty sure that you can add GF later for a reasonable install fee. They may not get to you until they’ve wrapped up other installations in the area, but they won’t leave new move ins high and dry forever.

    • Tusker says:

      Agree with you on “Jesse’s hatred towrds GF”.

      People cry more about how GF is not open market.
      But not about the 2500$ fee charged by UTOPIA for a connection. Before GF came to Provo, gigabit was costing $299 a month.

      Also about GF buying iprovo for $1, but they dont talk about the condition, where GF has to wire up every house within the iprovo territory for a 30$ fee (BTW GF was ready to null that, but the Provo Mayor insisted on collecting it) providing 5/1 at zero cost for the next 7 years.

      • Jesse says:

        A big difference between UTOPIA’s install charge and Google’s: ownership. You’re actually buying a piece of the network for that $2500-3000. That’s a good model to turn it into a subscriber-owned cooperative down the road, and you know you’ve truly paid for the installation completely instead of via residual monthly fees forever. (PS UTOPIA offers a connection lease option if the fiber is already on the curb. At $300, it’s a much closer comparison to the Google model.)

        If Google is required to wire every residence, why is there a deadline to signup that has, to date, been the final cutoff of it you are or will never get service? That’s a very well-documented restriction.

    • Jesse says:

      Google Fiber solves the speed problem (for now), but that’s an issue caused by a lack of wireline competition. Since CenturyLink is allowing their physical plant to rot on the vine (they announced ZERO upgrades in Provo after Google Fiber), it’s not inconceivable that we’ll have Comcast replace CentyuryLink as the “cheap” provider and Google replace Comcast as the “fast” provider. We’re right back to the craptacular duopoly we have right now. That’s not really much of an improvement, is it? There’s thousands of folks who use XMission on vanilla DSL because they hate CenturyLink and Comcast so much. Speed isn’t why we hate the incumbents.

      Here’s a challenge: if Comcast or CenturyLink proposed the exact same terms as Google, would you be as excited? Do you think that Google will really be all that different long-term once they assume a dominant market position? I’ve been in this game for a long time, and I know how this eventually plays out in 5-10 years. You’re trading one monopolist for another and it will not end well.

  9. Stenar says:

    Before Google Fiber came to Provo, UTOPIA was charging around $70 for their 100 Mbs and $299 for Gigabit. So, it’s a bit disingenuous to decry Google for not having a cheaper option for lower income people. Also, what’s cheaper than $35? Oh, yah. FREE 5 Mb plan from Google.

    • Jesse says:

      It’s a silly argument to say that the upgrades were because of Google Fiber. UTOPIA is in a parallel market with Google. They’d been working on a new price point for gigabit for many, many months. I know because I talked to them about it LONG before the change.

      Comcast was a reaction because they compete directly with Google. That’s a much better comparison of competitive response.

  10. Stenar says:

    Also, Comcast offers 50 Mbs in SLC, not 25 Mbs.

  11. richard hanson says:

    Comcast 50Mbs
    anybody note the “up to ” disclaimer?
    I have Utopia – 60 MB
    and every time I check speed even on Comcast site I get –60 Mbs
    I watch Netflix using the latest ROKU streaming box- no issues and perfect razor sharp pictures
    Comcast for me ? – not on your tintype dearie.
    they love their low speed setups which they milk their customers for .

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>