Will I ever get fiber?
With consumer demand for fiber-to-the-home service increasing all the time, more and more people are asking, “Will I ever get fiber?”. Providers like Verizon FiOS have been impressing consumers with their super fast fiber based broadband and TV service. They consistently rank in the top for customer satisfaction survey’s and outperformed all other ISPs ability to deliver advertised speeds according the first FCC Broadband Report (published 2011). In fact, Verizon’s FiOS service and the FCC Broadband Report was probably the biggest factor in pushing other ISPs to actually deliver on their advertised speeds as evident by the most recent 2013 study.
Google has changed the course of history for one small town in Kansas by choosing it as their test ground for Google Fiber: a super fast fiber to the home service offering speeds of 1 gigabit. But what about the majority of the population in the U.S. that does not have access to fiber-to-the-home? Unfortunately Google isn’t planning to grow into a large ISP. Any additional Google Fiber cities will be few and far between. The same goes for FiOS. Verizon spent over $20 billion building the FiOS infrastructure, and the capital costs have taken a toll on their balance sheet. In order to keep investors happy, they had to stop new FiOS build-outs and focus on customer acquisition in the existing areas. If there’s no FiOS installations in your town now, don’t expect any in many years to come. If you live in a town where Verizon is not the incumbent phone service provider, don’t expect FiOS in the next decade.
Other ISPs like U-verse have made strides to incorporate fiber into their network. However U-verse is not fiber-to-the-home and faces major bandwidth limitations when compared to services like FiOS. Investing in last mile fiber (so the fiber makes it all the way to each home) is a big investment for ISPs and in most cases it has not made financial sense. Same goes for most cable companies; they have upgraded their backbone networks to fiber because its much more cost effective (and they can recoup the costs much faster), but the last mile remains a shared coaxial cable. Theses large businesses have a hard time investing in last mile fiber because the time to recoup those investments is too far out.
It’s not that fiber service isn’t profitable. Verizon’s FiOS service is a huge revenue generator for them. Maintenance costs are much lower than old copper telephone cables and the services offered through fiber are better and usually have higher margins. How can we get companies to install a fiber network in more cities? The best answer probably doesn’t lie with big companies, but rather public municipalities.
The Saving Grace for Fiber
Over 150 communities have built their own cable or fiber network. This may be the only viable option for many cities and towns to be “lit up” with fiber. The biggest hurdle is educating community officials and the general public on how it can be done and why it would be beneficial. It’s not an easy undertaking. Almost all cases of community broadband utilities have met legal opposition in the form of big telecom and cable companies. However when it has succeeded, citizen’s get access to higher speeds at lower prices. New businesses, especially tech-related businesses are attracted to next generation services like fiber broadband. A local fiber network could have a huge impact on future economic conditions. This is not something that the big ISPs are thinking about. Like most businesses, they are driven by profit.
If you community doesn’t have fiber already, then let your local leaders know that a community fiber network could be a great asset. Encourage them to learn more about how it can be accomplished. Broadband at the Speed of Light by the Institute for Local Self-Reliance is an in-depth study on how three different communities built their own fiber networks. It is a great resource for local officials to learn about the possibilities for their community and so is their Broadband 101 Fact Sheet.
Most fiber providers also offer TV service in addition to broadband internet service. This can help make the fiber network profitable, but it doesn’t work as efficiently for small providers. Each provider must negotiate rates and conditions with every media provider in order to offer their channels to subscribers. It works much better on a large scale. However, the current system doesn’t allow for a TV provider to offer their service to anyone with an internet connection. This is due to the media companies, many of which are also ISPs, trying to protect and control their distribution and profits. If it was possible, then creating local fiber networks would be much easier to accomplish.
Imagine getting super fast fiber internet from your local municipality, and then choosing a TV service, with just the programming you want to watch, to be delivered over your broadband connection. Either a la carte or in big packages. Obviously this has already started with Netflix, Vudu, Amazon, and Hulu, but you still can’t access the majority of cable and network programming, without physical service from a TV provider, due to the constraints set by the media companies. Just like the music industry fought digital media for years and eventually settled for lower margins, the TV industry will have to do the same. Technology growth cannot be stopped.