Friday, April 24, 2015

Welcome to the Fiberhood

Since the introduction of Google Fiber, cities across our country have been vying for Google's attention. Once the first city, Kansas City got it, people have been in awe of the speed and the price of Google Fiber. $70 for gigabit access to the internet? Who could believe it when most of us are lucky if we can crack 10Mb/s from just one provider let alone two. For perspective, a gigabit is about 100x faster than 10mbs, which is typical in most places that have internet access in the US.

As good as Google Fiber seems to be, there is still an alternative that should not be missed: community broadband. Why is this? Why not take the commercial alternative to the incumbent carriers? They won't raise my taxes, right? They'll cover everyone, right?

Google appears to be on the right track with their Fiberhoods. The Fiberhood is built by surveying residents to see who will commit to signing up for the service. If enough people sign up, you're in luck and you get connected. If not, you may have to wait until more people get fed up with legacy incumbent service.

Community broadband is different. They are committed to connecting everyone, regardless of the neighborhood or the profit margin that can be derived from the neighborhood. Yes, they're a monopoly, just like Comcast, Time-Warner and Verizon in their respective service areas. But legacy incumbent service providers tend to cherry pick service areas - community broadband does not.

Google Fiber has definitely upped the ante for legacy incumbents, but they are still playing by the market. They look for demand and then they build. Remember the movie, Field of Dreams? The tiny voice in the ear of one character says, "Build it and they will come." This is the motto of community broadband, not that of the commercial internet service providers, including Google.

Where Google and the incumbents use the market to see if the demand is there, community broadband is built with the assumption that everyone should have access. This is the debate in my city. An entire buildout is being held up over a utility fee. What is being held up? A proposal to finance the buildout of fiber to every business and home in every city that is part of the Utopia group of cities. Of 11 cities, 5 have opted out, risking the legal costs of letting their network go dark while still paying off bondholders, if they still can. Why would they let the network go dark instead of using it to raise revenue? Fear of a utility fee.

Opponents like Comcast and Centurylink have seized upon this fee as a tax through their proxy, the Utah Taxpayers Association. By calling a fee a tax, they are playing upon the conservative sentiment about taxes. But they are silent when it comes to the "tax" that incumbent impose on heir customers: slower speeds at a higher cost than community broadband offers. Incumbents are silent upon the fact that their business model and the profits derived, require little or no competition. They assume that their customer base must be "price takers" or their model won't work.

Legacy incumbents claim that community broadband is unfair competition from municipalities. I guess they're afraid that government can outperform private enterprise. If that's their fear, then they're not really competitors. They're private monopolists that could never really survive in a free market.
Post a Comment