An Analysis of Google's Kansas City Fiber Deal

September 7, 2012 -

Republican FCC commissioner Ajit Pai thinks that the Google Fiber in Kansas City is the cat's pajamas, calling it a model for other metropolitan areas to follow. He says the deal shows that "it is critically important that states and local communities adopt broadband-friendly policies when it comes to rights-of-way management."

But a closer examination by Ars Technica shows that the devil is always in the details... First, Google received preferential treatment from Kansas City to build its infrastructure:

Google received stunning regulatory concessions and incentives from local governments, including free access to virtually everything the city owns or controls: rights of way, central office space, power, interconnections with anchor institutions, marketing and direct mail, and office space for Google employees. City officials also expedited the permitting process and assigned staff specifically to help Google. One county even offered to allow Google to hang its wires on parts of utility poles—for free—that are usually off-limits to communications companies.

Another concession: the deal between Google and Kansas City, MO calls for the city to "make space available to Google in City facilities for the installation of Google’s Central Office equipment and for additional network facilities," has to foot the bill for the power to Google equipment at city locations. The city agreed to not charge for power, space or any other services.

The article makes many points on why cities charge a "right of way" fee to private firms (mainly so it doesn't pay the cost) but the most important part is what happens when Google's fiber network is ready to go:

If a city is going to spend public funds on a new broadband network, it has an obligation to ensure that taxpayers are getting a good deal for their money. That might mean insisting on conditions, such as build-out requirements or open-access rules, that will avoid the need for yet another taxpayer-subsidized network to be constructed in the future. But mis-characterizing a government-supported project as the result of unfettered free markets obscures the true costs of such projects, and makes informed debates over them more difficult.

And then there's the matter of pricing. Yes, Google's network will be fast, but given all the money the city has paid out of its own pocket, consumers in the city should get a good deal too. After all, they helped pay for it in the first place.

You can read the full article here.

Source: Ars Technica

 


 
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