After about a year of deliberation, Google has announced their choice of Kansas City, Kansas as the test-bed for their 1Gbps fiber-to-the-home network. Congratulations to Kansas City and Google for moving forward with their project. We share their excitement about what the future holds there.
Meanwhile, the City of Portland has been considering what it can do for Portlanders. Since last autumn, the Office of Cable Communications and Franchise Management has been working on a Broadband Strategic Plan. In January, along with dozens of others, I was asked to participate on a Work Group to help shape the Plan. The third meeting of this group of participants concluded on Tuesday afternoon. In the next few months meetings will be held to explain the draft and to take public input. On September 14th, a finalized Plan will be presented to the Portland City Council for adoption.
As of Tuesday the draft Plan was, in my considered opinion, much much too timid—embarrassingly timid—and not at all likely to meet the stated goals for competition and performance in broadband service in the next decade. From the first meeting of the group, I advocated a goal of publicly-owned fiber to every residence and business in Portland. I say that not because I am a wild-eyed Socialist, but because it is the only path likely to give us the competition and capacity at a reasonable price that we all want, and I’ll explain why.
As network users, competition is our friend. It keeps the service provider honest and their profits reasonable while providing an attractive and useful product. Competition is great. Unfortunately, the kind of competition we have is broken and inadequate. Presently, we have competition mostly between types of service. Cable vs DSL vs Wireless vs Dialup. Within each type of service, our choices are limited or (in the case of Cable and the newer/faster DSL) non-existent. There are two reasons for this. First, wireline infrastructure is expensive to build. Once it exists, the economics work against another carrier trying to enter the same niche. Consequently, we have one cable company, we have one phone company and, in the suburbs, we have one fiber-to-the-home company. Now, ideally, all sorts of service providers would be able to sell their services over each kind of infrastructure, so that network users could choose which ones met their needs best. That is at least partly how old-style DSL works. If you can get service at all, you usually have a fairly robust set of choices of Internet service provider (ISP) on DSL (mostly for historical regulatory reasons). This is called Open-Access. However, newer infrastructure is not regulated that way. The City of Portland in the late 1990s tried to impose Open-Access rules on the cable company. The cable company responded by saying, “No, this is our infrastructure, we own it, and we’ll do with it what we like,” and went to court and ultimately succeeded in overturning the Open-Access rule that the City had tried to impose. As a result, there is no competition on the cable system. If you want the bandwidth you can get with cable, you buy it from Comcast or nobody. If you don’t like their terms of service, you are out of luck. Take it or leave it. That is not competition. If you want competition, you need Open-Access.
So, how do you get Open-Access? Well, you could have the Federal Communications Commission or the US Congress mandate it. Unfortunately, neither of those institutions, ostensibly concerned with the Public Interest, shows much willingness or inclination to actually act in the Public Interest, and anyway, a Federal Court might ultimately decide against the Public Interest, as they sometimes do. Breaking up vertically-integrated telecommunications companies into infrastructure and content/service components could also provide the needed competition. However, that doesn’t seem particularly likely either. We have monopolies and no one seems to want to regulate them. So, what are we left with? If you are reliant on owners of infrastructure to do what you want, and they are disinclined to do it when they are someone else, you need to become the owner. Then, as owner, you can decide to do what you want, which is to provide Open-Access and Competition on the infrastructure. So, in short, Competition requires Open-Access, and Open-Access requires Public Ownership.*
How do we get Public Ownership? Well, we can either buy it from someone who has it, or we can build new. Because fiber-optic networks have massive capacity, sufficient to support today’s and tomorrow’s bandwidth needs on into the distant future, are already demonstrably practical and actively being deployed around the country and around the world, it makes most sense to invest the money on building a fiber-to-the-premises network with local public ownership and accountability to its users.
What would such a network look like? Here are the key principles:
- That it be operated in the interests of the users and that users have a role in governance;
- That users pay the costs of construction and operation and reap the full benefits of ownership;
- That users can connect to whomever is also connected to the network, on a consensual basis;
- That 1Gbps is available to any other end-point on the network;
- That any service providers can have access to the network at non-discriminatory rates;
- That services can be purchased from anyone else on the network, including but not limited to Internet connectivity, video or voice service;
- That privacy of traffic crossing the network is ensured, and that any surveillance is authorized by court-ordered warrants;
- Network operations centers are open to public inspection.
Isn’t public ownership un-American? Well, not really. There are already 133 municipal networks in the United States.
What about costs? Isn’t fiber expensive to build? Actually, it is cheaper than copper infrastructure. A City of Portland feasibility study a few years ago estimated it would cost about $450 million to build a fiber-to-the-home network throughout the city. That seems like a lot of money, however today Portlanders are spending $100s of millions annually on telecommunications services. The money is out there, it just happens to be going into a rathole. We are talking about spending 10 times that on a bridge over the Columbia!
Still, it sounds scary, and there is the possibility of making costly errors if we aren’t careful. I suggest that we build a demonstration project first, with perhaps 2000 homes and businesses somewhere in the city, which could be built for a few million dollars. We could even spice things up by having a Google-like selection process, to get people excited about it. When the demonstration project has shown its viability, we can continue growing the network until the entire city is served. Portland has a proud history of large capital construction projects that serve the public interest over the long-term. In the 1800′s, Portland had private water utilities peddling an inferior product. Together we wisely decided to make a better choice. Our Bull Run water supply was very expensive to build. We sold bonds, and through user fees we paid those bonds back. As a result 100+ years later, we have excellent quality water and a reasonable price.
We can be wise again.
Let the City know you expect the problems of Competition and Capacity to be addressed aggressively in their Broadband Strategic Plan. Don’t let us settle for more of the status quo.
* The “Open-Access requires Public Ownership” relationship does not hold true for the Google Fiber project, which is what made it so attractive. Google has explicitly stated that the network they build will be Open-Access.
* (as of June 4, some dates have been edited to reflect current schedules)