Google Fiber could benefit from revised Oregon state tax law

Google Fiber (NASDAQ: GOOG) may finally get the green light it needs to bring its 1 Gbps fiber-to-the-premises (FTTP) service to Portland, Ore., as state lawmakers signed a law that would exempt gigabit Internet service from a decades-old property tax initially intended for microwave towers.

Under the new law, service providers like Google Fiber are exempt from an Oregon tax methodology that values companies based on "intangible" assets such as the value of their brands.

Such a rule could have meant that Google Fiber would have had to pony up millions of dollars to pay for annual property tax bills in Oregon.

"We're thinking about the network we're going to need in 10 years. So it's OK that we go through some work to get it," Mary Beth Henry, director of Portland's Office of Community Technology, told The Oregonian.

In March, Oregon state legislators moved to change the tax laws for Google Fiber in a bill that exempts data centers from the tax methodology. However, Google Fiber later told lawmakers that the state's proposed tax changes will make it "extremely unlikely" the service provider will bring its service to the Portland area.

What's been interesting to watch with Google Fiber is how other telcos and cable operators are responding with their own gigabit offerings. While neither have announced plans in Portland specifically, Frontier now offers 1 Gbps service in Beaverton, Ore., while Comcast (NASDAQ: CMCSA) just announced plans to take its 2 Gbps service to parts of California and Atlanta.

Meanwhile, Google Fiber's announcement that it would penetrate markets such as Winston-Salem and Raleigh-Durham in North Carolina has influenced AT&T (NYSE: T) to alter the prices of its 1 Gbps FTTP offerings. AT&T cut the price of GigaPower in Dallas to $110 from $120 and in Winston-Salem and Raleigh-Durham, it reduced the price of service from $120 a month to $70, for example.

However, other Oregon cities and towns aren't waiting for Google Fiber or one of the incumbent telcos to bring FTTP services to them. An earlier report in The Oregonian revealed that a number of Portland suburbs, including Hillsboro, Lake Oswego, Gresham and West Linn, are exploring how to build their own FTTP networks.

For more:
- The Oregonian has this article

Related articles:
Report: Google Fiber says Oregon tax bill will make serving Portland 'extremely unlikely'
Google Fiber puts 1-Gig network expansion decision on hold
Google Fiber gets green light to operate network in Portland, Ore.

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