Taxpayers subsidizing Google Fiber project
Google's free rights of way, power and office space in Kansas City called 'sweetheart deal' by some, great value to region by others
Computerworld - The Google Fiber broadband project underway in the Kansas City area is offering 5 Mbps Internet access for free and 1 Gbps access for $70 a month, among other major benefits.
However, the project also will cost taxpayers of the sister cities in Missouri and Kansas along with those in surrounding counties significant monies -- possibly millions of dollars -- to give Google free access to power, rights of way and even office space.
Such taxpayer costs have prompted some critics to question whether any major broadband project in the nation can move ahead without local government and taxpayer support -- or, as some say, "deregulation."
"We should acknowledge the possibility that it simply doesn't make economic sense for private firms to build new fiber networks without taxpayer subsidies," commentor Timothy Lee wrote on the Ars Technica tech news website on Friday.
Google has signed deals with various governments agencies that some observers say are valued in the millions of dollars.
"I'd assume the taxpayer cost [for the Google project] is in the millions," said Jack Gold, an analyst at J. Gold Associates.
Gold noted that most cities normally require that providers pay 3% to 5% of subscription revenues from customers to offset such costs. Google, however, isn't required to pay such fees in Kansas City, they said.
"Aside from free electricity, rights of way and more, the subscriber revenue fees aren't there either," he noted. "It looks like Google got a real sweetheart deal. Other providers should be pretty unhappy."
One supporter of the Google project, Fred Campbell of the Competitive Enterprise Institute, even called the regulatory concessions and incentives from Kansas City area local government agencies "stunning" in a blog post.
One county in the Kansas City area charged Google nothing to hang its wires on municipal utility poles that are usually off-limits to communications companies, Campbell wrote.
The city of Kansas City, Mo., also agreed to pay for power at city locations and offered space to house Google equipment at no charge under a so-called "Development Agreement" between the parties.
"It's silly to think that private companies can do these projects without help from government subsidies," Gold said.
In a statement released by the Federal Communications Commission this week, Republican Commissioner Ajit Pai praised the project, calling it an economic boost the the Kansas City area.
Pai also said he traveled to Kansas City to see the project in action as part of an effort to urge states and local governments to "adopt broadband friendly policies when it comes to rights-of-way management."
- Chrome users attack Google for zapping unsanctioned Windows add-ons
- Google postpones add-on 'kill switch' for Chrome on Windows
- Google yanks option to restore Chrome's old-style new tab page, riles users all over again
- Google's 3D tech could be boon to Glass, robots and virtual reality
- Google bots are coming!
- Antitrust deal leaves Google unscathed
- Google agrees to give equal prominence to rivals' services to settle EU antitrust case
- Lenovo-Moto deal's impact on Apple? Zip
- With Motorola sold, Google can focus on robots, Glass and smart homes
- Google is developing a smart contact lens
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- Next Wave in Wireless Emerging 802.11ac standard promises a significant boost in performance to support ubiquitous mobility.
- Case Study: Murphy USA Gains Application Visibility Without Agents Murphy USA has more than 700 stores that share a 10Mbps VSAT link. So when something goes wrong with their applications, it's the...
- 25 Business Phone Service Features Your Business Can't Do Without How many features does your business really need in a phone system? Which are worth paying for, and which are over-hyped? Learn how...
- The Great Video Conferencing Debate: Cost Vs. Quality With new video conferencing solutions available for small and medium businesses, it is possible to have a higher standard of video conferencing without...
On-Demand Webcast: 7 Reasons to Choose VoIP
Thinking about a new phone system for your business?
Be sure to watch this informative webcast. Steve Strauss, small business columnist for USA...
- Meg Whitman presents Unlocking IT with Big Data During this Web Event you will hear Meg Whitman, President and CEO, HP discuss HAVEn - the #1 Big Data platform, as well... All Wireless Networking White Papers | Webcasts