July 08, 2013

Googletopia


Even in a rock-ribbed Republican stronghold like Utah County, a city government can find itself sucked into a failing socialist experiment. The iProvo fiber optic system was Provo's attempt to treat Internet access like a municipal utility.

Except that, unlike electricity or water, it wasn't exploiting a natural monopoly.

The idea certainly looked good on paper. Like the transcontinental railroad, the city would provide the rights-of-way and a commercial ISP would run things. Its citizens would get superduper fast Internet service for a song.

In reality, Union Pacific was driven to the verge of bankruptcy a mere three years after the Golden Spike was driven at Promontory Summit, Utah. The entire state of Utah did go broke as the unpaid subcontractors fell like dominoes.

But the next time will be different, right? No, it was pretty much the same thing, albeit (thankfully) on a tiny scale.

With cable, DSL, and wireless already available, none of the service providers Provo partnered with could sufficiently cover the outstanding debts the build-out had already incurred to make any money, let alone extend it to all customers.

Back in 2008, the Reason Foundation reported that Provo "faces the dilemma of continuing to fund iProvo with no break-even point in sight, or it can sell and recoup as much of its investment as it can."

It took a few years, but Provo does deserve credit for recognizing a sunk cost fallacy when one was staring them in the face.

So when Google came calling, Provo was happy to sell the whole thing for a dollar, even if that meant eating $2.2 million in outstanding debt and the remaining $3.3 million of the bond issue that funded the network's construction.

Once it goes live, Google says it will provide Provo residents with Internet speeds of 5 megabytes-per-second for seven years after a one-time $30 activation fee. Now that's UTOPIA.

Which happens to be the name of iProvo's sister fiber-optic network that operates on a (very) limited basis throughout Northern Utah. It was started with the same starry-eyed utopianism and ended up in pretty much the same financial straits.

A flyer from an Orem mayoral candidate (local election this fall) I got in the mail last week pointedly deplored Orem's continuing involvement in UTOPIA, throwing good money after bad. Alas, the candidate didn't say what he'd do about it.

Pretty please, Google, buy the whole thing! And build out the service to my address!

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