Google Fiber and Provo City negotiate new agreement

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Google Fiber store front sign on Center Street, Provo. Provo City has negotiated a new deal with Google Fiber focused on internet revenue rather than cable revenue. (Preston Crawley)

Google Fiber and Provo City recently decided to make changes to their negotiation, without removing their low bandwidth free internet option.

Google Fiber came to Provo in 2013 to introduce its high-speed internet services to Utah. Many Provo residents and students have since relied on Google Fiber for their internet services.

A recent shift toward the use of internet services over cable services caused Google Fiber and Provo City to reevaluate their agreement.

When the city initially entered into the agreement, Google Fiber offered “Triple Play” which includes internet, video and IP phone services. However, because many Provo residents are removing cable from their homes and relying solely on streaming services instead, Google Fiber approached Provo City to adapt to the increase in internet use.

“What the new agreement essentially changes is rather than a 5% fee assessed to Google Fiber based on their television revenue, that’s going to a 2% fee based on all of their internet revenue,” said Wayne Parker, Provo’s chief administrative officer. 

Parker, along with City Council members, said this change will not only benefit the city’s revenue but will also provide an opportunity for growth.

Provo Councilman Dave Sewell said the city has reached a mutually agreeable solution. “I think both sides seem to be happy with this new proposed arrangement.”

According to Provo City finance director Dan Follett, the only residents affected are those who have cable services in place. Google Fiber intends to work with these residents in order to eventually transition them to another provider when they ultimately decide not to offer IPTV anymore.

Provo City Council members also said this new agreement is not related to the seven-year contract with Google Fiber for free low-bandwidth internet. Though the contract is nearing that seven-year mark, Google Fiber has indicated no immediate plans to disconnect the free service.

Google Fiber is aware these changes have an impact on low to moderate income households, so they are working with those households very closely, Follett said. Google is reaching out to customers and considering possible options on a customer-by-customer basis. 

“We did express to them that you know we have residents that are in lower incomes and things like that that would really appreciate at least having a lower cost option,” Sewell said. “Ultimately, it is a business decision on their end.”

The new agreement with Google Fiber will be reviewed Jan. 19 at the next City Council meeting before being passed on for authorization by Provo Mayor Michelle Kaufusi.

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