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Google Fiber Gets Portland's OK, But Remains Noncommittal

Google Fiber Gets Portland
June 16, 2014 11:42AM

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Other cities are ahead of Portland to receive Google Fiber, but Portland has taken a large step toward enabling Google to get the ball rolling. Google, for its part, could benefit by moving sooner rather than later to compete against Comcast and other ISPs. Still, as of now, Google only lists Portland as a potential service location, among many others.

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The city council of Portland, Oregon has agreed to let Google enter the city with Fiber. Subject to certain fees and conditions, the city would give Google a franchise agreement that would enable the always-expanding tech giant to install Fiber and WiFi networks around the city.

Since Portland has a sizable population with more than 600,000 residents, the franchise agreement would not obligate Google to service all areas of the city. Other agreements between Google and cities like Kansas City have included similar terms, since providing Fiber for an entire city can be cost prohibitive.

The Agreement

Even though Portland is showing interest in Fiber, it is not handing Google the keys to the city. If Google is to set up shop in Portland to compete against Comcast and other Internet service providers, it will have to meet certain conditions. The company will have to provide free Internet service to some nonprofits, and it must also offer a 5 Mbps Internet service to customers for a $300 fee installation fee.

To expand WiFi access in the area, the city council agreement would require Google to install at least three free WiFi networks around Portland. This requirement makes sense because of the growing need for affordable or free WiFi. Additionally, Google has already shown interest in setting up wireless networks in public areas, so this could be an opportunity to test those networks.

Google may have a leg-up on Comcast in Portland since it would not be subject to a three percent PEG (Public Education Government) fee. Rather than generating revenue from the Fiber service through the flat three percent fee, the city council says that Google would pay a five percent franchise fee on video revenues.

It is clear that Portland would like to see Fiber become available to its residents. Despite a handful of requirements, it would still be relatively easy for Google to enter the market now that the city council has provided approval. Portland Mayor Charlie Hayes has also shown interest in the possible Fiber expansion, “It is such a good fit with who we are and who we will be in this city,” says Hayes.

Still Not A Guarantee

Since the beginning of Google Fiber, the technology company has remained selective about where it makes the service available. There are still some cities ahead of Portland that will receive Fiber, but Portland has taken a large step towards convincing Google to expand to Oregon.

Analysts point out that Google will have to review certain aspects of the deal and the Portland market before it initiates any sort of roll-out. Local regulations must still be taken into account, and Google will have to look at the technical requirements for providing its Internet service to the residents of Portland. Right now, Google only lists Portland as a potential service location, among many others.

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