A buzz is growing that Alphabet, the parent company of Google, is preparing to part ways with its largest moonshot investment, Google Fiber. Taxpayers should hope the rumors are true. While internet service providers (ISPs) have invested more than $1.5 trillion in private funds in building broadband infrastructure over the last two decades, Google Fiber has built its small network on taxpayer subsidies and special interest favors.
The two most egregious examples of this behavior are in Provo, Utah and Huntsville, Ala. About a decade ago, taxpayers in Provo paid nearly $40 million for a high-speed Internet network, iProvo, that allowed the city to sell internet access directly to customers in competition with private providers. The city borrowed heavily for construction. To help pay back the loans, the city charged residents exorbitant fees of up to $700 to install the service and raised taxes on utility bills. Not surprisingly, residents were outraged and iProvo floundered.
The city finally decided to cut its losses and looked for a buyer to take over its network. Google Fiber was waiting in the wings and, boy, did the company make off like bandits. The company bought iProvo for just one dollar. One dollar. That is .000000025 percent of what Provo’s taxpayer-subsidized expenditure.
Huntsville’s misadventure is ongoing. That city is using public money to build a network for Google Fiber to lease. The system reportedly will cost $57 million. Alphabet is one of the largest companies in the world. It does not need to pick Huntsville taxpayers’ pockets to achieve its fiber dreams.
Kansas City also opened its wallet to Google Fiber. In their quest for Kansas City to become the first Google Fiber, city leaders plied Google Fiber with all sorts of free stuff. As one reporter pointed out, Google Fiber’s contract says the city will “make space available to Google in City facilities for the installation of Google’s Central Office equipment and for additional network facilities” and “will not charge Google for such space, power, or related services.”
Free rent and free utilities. That sounds appealing to a lot of Kansas City residents and small businesses in the area, but only wealthy mega companies need apply.
Google Fiber has negotiated sweetheart deals with other cities for leases on the “fiber huts” needed for its networks. These huts essentially are relay stations that allow Google Fiber to move its fiber signal to homes and businesses on the last mile of its network.
In San Antonio, Texas city officials provided a sweetheart lease to Google Fiber to use several city parks for its huts. The lease was made at below market rates and residents weren’t given the opportunity to discuss the deal in public hearings. (According to one estimate, Google Fiber is paying $0.29 per square foot for its leases when the going rate is around $5.) Some of the sites are in historic or residential neighborhoods and on valuable park land where other commercial interests and property owners are not allowed to build. The city now has halted construction because neighbors are outraged. A local television station also recently reported that Google Fiber’s subcontractors haven’t paid for damages done to some homes during the construction process.
Google Fiber also is building fiber huts in Charlotte, N.C., where it recently was granted 82 construction permits and in Raleigh, N.C., Atlanta, Ga., and Nashville, Tenn. In Charlotte, the company is reportedly paying $2 per square foot for its lease. Residents there already are upset about disruptions and damage attributed to construction and there also is concern that Google Fiber is building in wealthier neighborhoods first, a prospect that, if true, could expand the city’s digital divide.
Alphabet’s pockets are deeper than those of the taxpayers’ of these cities. These handouts amount to nothing more than backdoor corporate welfare. Citizens are forking over too much and getting too little in return. Google Fiber is sinking and now it’s time for taxpayers to abandon ship.
David Williams is the President of the Taxpayers Protection Alliance.
The views expressed by this author are their own and are not the views of The Hill.