March 26, 2014
March 26, 2014
By Oregon Tax News,
Portland is one of 34 cities slated by Google for Google Fiber expansion, which means its residents could soon browse the Internet at speeds 100 times faster than current broadband capacity allows.
Google Fiber refers to the fiber optic broadband infrastructure Google plans to deploy strategically in cities across the country, including Portland, Atlanta, Phoenix and communities in the San Francisco Bay Area. Those who sign up for the service would also be able to download entire seasons of television shows and full-length, high-definition movies in a matter of seconds.
Google Fiber has already been rolled out in Kansas City, Kansas and Missouri, as well as Austin, Texas, giving local residents another option for Internet service. Despite the clear advantages Google Fiber offers in comparison to other service providers, the average monthly cost to consumers are roughly the same or a little less. Google has even sweetened the pot for new customers in its current locations by offering free service for seven years, with a $300 activation fee. Over the course of seven years, the average customer could see savings upwards of $5,000. In addition to increasing competition and driving costs lower for consumers, the speed and power enabled by Google Fiber could have significant impact on the future of educational programs, professional collaboration and medical applications.
Google’s rollout of its broadband service, however, has raised complaints from competitors, who see deals between the company and local governments creating an unfair competitive advantage in Google’s favor. The Wall Street Journal reports that cities have used tax deals and other sweeteners to attract Google Fiber. In both Kansas City, Missouri and Kansas, for example, Google has been given free office space and utilities. The company also has broad access to the cities’ buildings, land and equipment at no cost. Teams of government employees have even been created to attend to Google’s needs. Competitors see these and other deals as inherently unfair and are trying to negotiate similar arrangements.
Given the possible economic benefits and innovation associated with Google Fiber technology, cities see their incentives as an investment that will pay economic dividends by attracting entrepreneurs and cutting-edge businesses. These will spawn more businesses, create jobs and strengthen local economies. Google understands this and will likely leverage its advantages to arrange favorable deals with Portland Metro governments. Mayors of Gresham, Hillsboro, Beaverton, Lake Oswego and Tigard have already indicated a willingness to accommodate. They recently published a column in The Oregonian explaining the importance of Google Fiber to their communities and their commitment to make it happen.
Google’s competitors and those concerned about tax fairness and corporate welfare will soon have to make their case—not just in Kansas City and Austin but in Portland and nearly three dozen other cities.
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