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Google Fiber was supposed to be a shaming exercise. But any shame felt by the country’s big-name ISPs has yet to produce the sort of ultra-high-speed internet services we’ve all been hoping for.
In 2010, Google announced that it would bring a 1,000 megabit (1 gigabit) per second fiber internet service to one lucky American city. That’s one gigabit per second streaming across the wire — or about 10 times the speed you’re used to and more than three times the speed you’d get from Verizon’s existing 300 megabit per second fiber optic service, FiOS.
The search giant insisted it had no intention of becoming an internet service provider. It just wanted to encourage existing ISPs, including Verizon, to run higher speed lines across the country. But although Google Fiber has now arrived in Kansas City, Kansas, the big name ISPs aren’t exactly following suit.
Verizon has stalled the expansion of FiOS indefinitely, and other companies have been slow to invest in ultrafast broadband. Time Warner Cable is rolling out fiber to office building in New York City, and Comcast’s Xfinity Platinum service offers a 305 megabit cable service in some locations for $299.95, but that’s the extent of it.
The good news is that local communities are now trying to trying to find other ways to bring higher speed internet to their citizens at affordable rates. Chicago and Seattle, for example, have both announced partnerships with a new broadband provider called Gigabit Squared to bring fiber internet connections to residents.
Why are things moving so slowly? With communities eager for fiber internet, why aren’t the established broadband companies doing more to bring these services to more cities? The answer is, yes, money.
Verizon began offering fiber internet connections in some states back in 2005 and puts its investment in the network at $23 billion. But some have questioned this claim, and investors have been uneasy about this spending all along. The company confirmed earlier this year that it would not expand its service to other states or even roll out to additional neighborhoods.
“Competitors have been overbuilding, investors are wondering where the returns are,” says Mark Ansboury, president and co-founder of GigaBit Squared. “What you’re seeing is an entrenchment, companies leveraging what they already have in play.”
Karl Bode, an ISP industry watcher and author of a the blog DSL Reports, believes Verizon has had a change of heart. “I think ex-Verizon CEO Ivan Seidenberg was very bullish on fiber,” he says. “But after retirement, he was replaced by executives who wanted to focus more heavily on wireless, given the lower cost of deployment and the absolute killing that can be made charging users a significant amount per gigabyte.”
But he also blames the money men. “Investors in this country are simply too myopic to wait the required length of time to see adequate returns,” Bode says. “These services are certainly profitable, they’re just not profitable enough quickly enough for short-sighted investors.”
Verizon is neglecting not just FiOS, but all of its other fixed line services in favor of wireless services, according to Bode.
“I think both Verizon and AT&T have made the decision to hang up on any further fixed line broadband competition and are happily letting those users flee to cable,” he says. “Cable in turn will help them by directing their users to wireless services. We’ve effectively just seen the birth of a significantly less competitive broadband market where cable has a monopoly on fixed line broadband, and nobody appears to have noticed.”
Bode also notes that Verizon Wireless is not unionized, which means the company may also save on labor costs by emphasizing that part of the business. Neither Verizon or the Communications Workers of America union responded to our request for comment.
The lack of motivation by larger broadband companies is an opportunity for Gigabit Squared. The goal in Seattle is to offer 1 gigabit connections for less than $100 a month.
“In other countries [broadband development] is driven by the government,” Ansboury says. “But here there’s no national drive, no national strategy. We’re a little bit more haphazard. We drive that technology deployment on the perceived need of the incumbent. We’ve seen more consolidation, more deregulation and a move towards wireless.”
The answer, he thinks, is in public/private partnerships, like the deals his company has reached with Seattle and Chicago.
Seattle is one of several cities left behind by the major broadband providers, but it happens to have excess fiber capacity. But according to The Seattle Times, few residents have been able to take advantage of it, though Spectrum Networks does offer service in the South Lake Union neighborhood.
The problem, Ansboury explains, is that the most expensive part of a fiber deployment is the what’s called the “last mile” service — bringing fiber from the big “backbone” connections to the customers’ homes and office buildings. Gibabit Squared will lease fiber capacity from the city and build much of the last mile infrastructure itself.
Broadpoint Amtech analyst Benjamin Schachter estimated in 2010 that Google’s Kansas City network could cost over $1 billion to build. But as GigaOM has reported, Google saves money on its deployments in various ways, such as piggybacking on existing power line infrastructure and building its own network gear.
But what might really be making the difference in Google Fiber’s deployment is its inventive to pay for the last mile service by encouraging people who want home service to get their neighbors to sign-up in advance, lowering the risk of deploying to a particular neighborhood. To encourage more people to participate, Google is offering free 5 megabit speed fiber connections for a one-time setup fee of $300, which will help cover the costs of the last mile service.
Fixed line fiber optic connections might not be our only hope for faster internet. Most commercial wireless networks max out at about 30 megabits per second, but Computers & Tele-Comm, Inc. (CTC) has been offering a 1 gigabit wireless service in Kansas City since before Google Fiber began its roll out. But the secret to getting and maintaining these speeds is keeping the user count low, according to a story on the GigaOM blog. CTC also does quite a bit of infrastructure optimization, but it only caters to small number of Kansas City business customers — not to the consumer market.
Meanwhile, the government experiment technology agency DARPA is trying to build connections that as fast as 100 gigabits per second over 200 kilometers. Although DARPA’s project is designed to bring high speed connections to battle fields, it’s not out of the question that the technology could find its way to commercial providers — assuming DARPA can actually pull it off.
But the issue with both CTC and DARPA’s project is how many simultaneous users it can support. But if the scale issues could be addressed, wireless offers an intriguing way to solve the last mile problem for fiber internet.
One of the big questions is whether any of this will actually do any economic good. Ansboury cites the example of the cities of Chattanooga, Tennessee and Lafayette, Louisiana, both of which have already initiated public/private partnership programs to bring fiber internet connections to their citizens.
Ansboury believes that the more important issue might be inaction. “Not having this infrastructure is why certain businesses haven’t moved in, or have left,” he says.
Meanwhile, the need for high bandwidth connections is increasing. Ansboury says Gigabit Squared is working with a senior care service that uses two-way high definition video streaming work to reduce costs of health care. By allowing seniors who have recently be discharged from a hospital to interact with their doctors from home instead of going into an office, they’re able to save time and money. But these sorts of applications are going to require far more bandwidth than is available today.