Italian designer Francesca Castagnacci made a pair of heels fit for any girl—or at least any girl who’s serious about her bandwidth. They’re made from strands of fiber optics as thin as human hair and lit by a LED. More »
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Verizon is maturing its current Digital Voice product — available in 11 states and the District of Columbia — with a total Voice over Internet Protocol solution. The service transitions away from the analog switches used previously, leverages Verizon’s existing and future investment in fiber optics, and reduces costs while improving the quality of service.
From an infrastructure standpoint, the offering makes complete sense; maintaining old copper lines doesn’t come cheap. In 2007, an estimated $5.7 billion was spent by phone companies on servicing the copper pipes — that works out to $52 per line. Of course, laying fiber to the home is expensive too — approximately $650 per Verizon household, according to an October 2009 CSMG study. But once the initial investment is made, there’s far less upkeep for fiber than for copper lines. And since Verizon can use that same line for television, Internet connections and other service offerings like video on demand, the multi-use aspects help recoup costs faster.
Even with today’s cord-cutting trend — nearly one in four U.S. homes opt for wireless service in lieu of a landline – it could take a full generation before nearly all of us are wireless in the U.S. So Verizon hopes to offset the stinging losses of landlines by attracting new and existing FiOS customers with digital voice service that never interacts with the public Internet — allowing Verizon to manage voice quality. There’s little doubt that wireless is the future. Until that future arrives however, Verizon seems happy to piggyback digital voice revenues atop its fiber optic network just in case the FCC does mandate a national, all-IP network.
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Allied Fiber said today it’s begun construction of a nationwide wholesale fiber network that will span 11,548 miles. The New York-based company will build out the network in six phases, linking undersea cable landing points, data centers, colocation interconnection facilities, rural networks and wireless towers in order to feed the increasing demand for broadband capacity resulting from everything from the ever-growing number of cellular towers to cloud computing (we’ll talk about the bandwidth needs for cloud computing at our Structure 2010 conference next month).
A New Model to Meet Broadband Demand
But Allied’s effort isn’t just aimed at boosting overall capacity — it’s aimed at changing the underlying business model of providing long-haul telecommunications networks. Hunter Newby, CEO of Allied Fiber, wants to connect the U.S. with an open fiber network comprised of the three disparate systems that essentially make up the backbone of the Internet, and is targeting data centers, high-bandwidth sites, rural ISPs, wireless companies and long-haul networks providers as customers. But it remains to be seen if Allied’s model will compete, not just with offerings from backbone providers such as Level 3 Communications, but also with colocation companies and the tower industry.
Newby, who was the chief strategy officer at colocation provider Telex, is pretty impassioned about his plan to bring wholesale fiber to places where existing backhaul providers may not go. It’s a plan similar to Google’s experimental fiber network for consumer broadband, but enacted on a much larger scale, and for businesses. Newby believes that in underserved areas where Allied Fiber will have a presence, the cost of bandwidth will be driven down significantly because Allied will be willing to sell access to the long haul network, at competitive rates, to anyone who wants them — something the incumbents aren’t inclined to do.
Competition Drives Costs Down
The construction of Allied’s network is a big deal for small ISPs, which can find themselves having to pay more than $100 a megabyte for bandwidth, and may mean they don’t have to implement bandwidth caps as a means to keep their own costs down. It’s also a big deal for cellular carriers like Sprint and T-Mobile, as it will give them access to less expensive backhaul without having to pay the likes of AT&T or Verizon.
As Newby explains, rural providers or cellular providers needing rural coverage will be able to buy transport at wholesale rates from a colocation provider in the middle of field somewhere along a railroad right of way (Allied has a deal with some railways companies for access to their ducts). Such an approach could provide access for a single provider near the colocation facility or other regional providers could build off the Allied network. It would also open up the opportunity to locate data centers in rural areas, perhaps near renewable energy projects.
“The incumbents have control and have made it quite clear they’re not willing to make any significant capital investments in rural areas and are selling off rural assets,” Newby told me. “But you need to change the economics, and if these buyers can buy at even $15 per megabyte…the number of gigs and terabytes will eclipse the current rate because right now it’s so expensive.”
Building a High-Fiber Network
The first phase of the Allied network will cost $140 million, will connect New York, Chicago and Ashburn, Va. and will be completed by the end of this year. Newby said the second phase (from Atlanta to Miami) will cost $180 million, and the third phase connecting Chicago to Seattle could cost as much as $350 million. However, he added that potential customers are willing to go in with him on the cost of the connection to Seattle because big bandwidth providers like NTT Corp. need a shorter route to get their traffic to Asia. The final three projects aren’t budgeted yet, nor is there a definitive time frame.
The first phase will provide a combined 648 dark fibers, 19 colocation facilities and 300 tower sites. From the press release:
Allied is deploying a 432-count, long haul cable coupled with the 216-count, short-haul cable that will be a composite of Single-Mode and Non-Zero Dispersion Shifted fibers. Allied Fiber has implemented a new, multi-duct design for intermediate access to the long-haul fiber duct through a parallel short-haul fiber duct all along the route. This enables all points between the major cities, including wireless towers and rural networks, to gain access to the dark fiber. In addition, the Allied Fiber neutral colocation facilities, located approximately every 60 miles along the route, accommodate and encourage a multi-tenant interconnection environment integrated with fiber that does not yet exist in the United States on this scale.
If Allied Fiber can build an open fiber network that spans the country and includes colocation and towers, it could provide a way for municipal fiber networks and rural ISPs to get online and connect to backhaul for less, while bypassing their potential competitors (for example, a muni fiber network might compete against AT&T but may also have to buy access back to the Internet backbone from AT&T because it’s the only provider in the area). We’ve long argued that open networks are the way to go when it comes to big infrastructure, something with which Newby agrees. “I believe in the power of open networks,” he said, “but instead of talking about it or writing, about I want to do it.”
He went on to say that: “I encourage other people to copy our model and philosophy of neutrality. It drives growth and it’s what drives the innovation and bridges the islands of broadband we have in this country.”
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Just 8.7 percent of Africa’s billion-plus residents have Internet access, but one man plans to increase that percentage by spreading Wi-Fi throughout the continent over the next decade. Paul English, CTO and co-founder of the travel search site Kayak.com, has installed small-scale, one-off networks in various African nations and now plans to use the wealth created from Kayak to scale up his access efforts, reports Fast Company. English’s ambitious non-profit JoinAfrica project will launch launch later this summer.
In the Google Group set up for JoinAfrica communications, a resident of Ghana expressed concern that such an approach won’t allow the free market to take its course when it comes to African web access. English himself responded by saying:
“JoinAfrica intends to work with for-profit African teams, in developed areas and under-developed areas. We plan to start first where there is existing fiber, and to provide tools to setup bandwidth-shaped free wifi limited to text (and small graphics). This should grow potential userbase.
And once people want to move from the free text-only Internet to an Internet with voice, video and large images — they can then pay market rates to a local African company to have the “full” Internet. I expect JoinAfrica to have many phases. Once we prove the free-to-fee wifi model in areas with fiber, we then need to find ways to use this model to finance more and more fiber for other areas.”
This isn’t the first undertaking to expand web access in Africa — in 2008, Google invested in O3b Networks, a satellite and fiber solution launched to blanket emerging markets with the Internet. But the JoinAfrica endeavor is taking a different approach: The initial focus will be on spreading free and low-cost Wi-Fi access to existing or planned bandwidth pipes for basic web usage, but still leave room for businesses to join in and make money through value-add services. A major infrastructure partner is expected to help JoinAfrica, but English hasn’t yet revealed who that might be.
Even if JoinAfrica increased web access to just 15 percent of the total African population, the impact would be monumental as it would enable 63 million — or roughly the equivalent of the entire UK population – more people to communicate, investigate and participate on a global network. That sounds like a journey that’s right up English’s alley.
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BT, a British telecom, said today it would spend an additional £1 billion ($1.49 billion) to deploy fiber to up to two-thirds of the homes it serves by 2015, up from 40 percent by 2012 that BT said it would reach late last year. The $1.49 billion boost in spending will increase its total investment in fiber to $3.72 billion.
The plan still relies on the fiber to the node, as opposed to the fiber-to-the-home, but the network is open to all service providers — a difference between the BT network and networks in the U.S. However, that hasn’t stopped BT from some bad behavior on the network management side. Unlike Australia’s future fiber to the home network, BT’s network doesn’t have government funding.
Ian Livingston, CEO of BT, said he expects four million homes to have access to superfast broadband, with speeds of up to 40Mbps, by the end of this year. The government goal is to have available speeds of up to 2 Mbps across the country by 2012. Suddenly our National Broadband Plan of giving 100 million homes 100 Mbps broadband by 2020 isn’t looking too terrible, especially since about 60 million homes already have access to broadband that can deliver 50 Mbps.
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The government of Australia has committed AUS$43 billion ($38.9 billion) to build out a national fiber-to-the-home network that will serve 93 percent of its citizens, with those in rural areas guaranteed satellite or wireless service of up to 12 Mbps. The government’s plans also include opening the network to commercial providers that might want to offer access as well as services through the pipe, creating a communications network that might resemble Google’s proposed fiber network, but on a much larger scale.
It’s not a cheap effort, and Australian ISPs have both derided and fought against the project, arguing that the network will compete against theirs and that the government has no business running a broadband network anyway. But as Nate Anderson at Ars Technica notes, the fiber-to-the-home network has been validated in an independent report issued by KPMG and McKinsey. Anderson breaks it down for people in an analysis that everyone in the U.S. who cares about broadband should read.
He notes that the two countries are different, with most of Australia’s population living at the perimeter of the continent, and points out that the effort will require 250,000 kilometers of fiber and 5,000 visits per day to customers’ homes over a period of eight years in order to get fiber to that 93 percent of residents. But the McKinsey and KPMG report ultimately estimates that the cost to the consumers will be the equivalent of $27-$32 a month for 20 Mbps voice and broadband access. I pay much more for much less.
The key will be the open network, which the McKinsey report says will create a “fundamentally different industry structure…This change will accelerate the evolution of the industry. At times this may be smooth; at other times it will be uneven. New business models and companies will emerge.”
Unfortunately, opening up existing networks wouldn’t work in the U.S. (some with ties to the current telecommunications industry argue the entire Australian model wouldn’t work), as the U.S. telephone and communications network has been built by private companies. Forcing ISPs to open their networks isn’t an option that will sit well with ISPs, their shareholders and even many in the government. However, the answer to the lack of competition isn’t data, as the National Broadband Plan proposes, nor is it wireless, which can never deliver the kinds of speeds a fiber-to-the-home connection can.
The answer to the lack of competition is…well, competition. We see it in places where Verizon has rolled out its fiber-to-the-home offering and the cable companies are forced to compete; we see in areas where municipalities have managed to deploy their own fiber networks; and perhaps we’ll see it in whatever lucky town gets Google’s experimental network. So while forcing open access here isn’t an option, and it’s unlikely that the feds will greenlight what could cost up to $350 billion for a fiber-to-the-home network, we only need to look to Australia to see how valuable they can be.
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Google’s planned experimental fiber network will be so open that the company hopes to see other ISPs ride it in order to deliver their own services, according to a story by BroadbandBreakfast.com. The publication quotes a project manager in charge of the program (whom we’ve also interviewed before), as saying:
“We definitely inviting the Comcasts, the AT&T service providers to work with us on our network, and to provide their service offering on top of our pipe – we’re definitely planning on doing that,” said Minnie Ingersoll, Google’s product manager and co-lead for alternative access. “Our general attitude has been that there’s plenty of room for innovation right now in the broadband space, and it’s great what the cable companies are doing, upgrading to DOCSIS 3.0, but no one company has a monopoly on innovation.”
Although I can’t imagine any of the larger ISPs taking Ingersoll up on the offer, it deos represent a chance for them to get away from being dumb pipes by truly proving the value of the services they offer to their users. And in the process, they could try to overload Google’s network with their content, as they accuse Google of doing to their own networks. Except that Google’s small network would be fiber-to-the-home, rather than a a more easily-congested cable or copper pipe.
While Ingersoll didn’t share when Google might announce which of the 1,100 municipalities that applied for the fiber network to be built in their town, she did say she was evaluating them based on “the efficiency with which such networks could be rolled out, and how the targeted communities could benefit from the roll-out of such a network,” according to BroadbandBreakfast.com. As much as I’d like to see that fiber installed in my city, I’m even more excited to see how the whole project plays out in terms of costs and what it can show us about the economics of delivering fiber to the home.
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Google’s bringing fiber to a special city—whichever city can prove its worth. Portland just threw down some heat by creating its own beer, “Gigabit IPA“. It goes up for a tastetest tomorrow. Will it woo the Goog? [Taplister] More »
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If you live in New York City or in any of the heavily populated and wealthy areas of the Northeast, you likely have access to some of the fastest broadband speeds available in the country. If you live in a suburb of Austin, Texas, however, you’re offered speeds some six times slower for about half the price. And as the technologies race ahead for network access, ISPs with fiber to the home and cable-provided Docsis 3.0 service are going to surpass the speeds that providers using old-school copper and even wireless can offer.
Which means that while some people will be living in the 21st century, great chunks of the country will be subsisting on the 2010 version of dial-up. Don’t believe me? Verizon has tested a tech that requires software upgrades to deliver a 10 Gbps connection that’s shared among 32 homes. Meanwhile, technologies such as the next generation from AT&T are going to require swapping out gear at the node and inside your home so the companies still using copper can squeak up to speeds that most analysts doubt will even reach 100 Mbps. That means a hundred-fold disparity in connection speeds. Holy cow.
We’ve addressed this in stories, when FCC chairman Julius Genchowski came to visit our offices and even in conversations with service providers. It’s the key reason the U.S. isn’t competitive with other countries when it comes to the rapid deployment of next-generation networking technology. So we think it’s a big issue. The FCC even thinks it’s a big issue. Google thinks it’s a big enough issue that’s it’s going to spend hundreds of millions of dollars to build a shared, experimental fiber-to-the-home network — and embarrass the ISPs and the government in the process.
To quote the Google blog: “After all, you shouldn’t have to jump into frozen lakes and shark tanks to get ultra high-speed broadband.” Oh, but that’s what people are willing to do because the ISPs are so focused on the short-term bottom line to spend billions (yes billions) on big pipes. When I talk to many ISPs, the No. 1 reason they give me for the lack of investment in faster infrastructure is that users don’t want it. There’s no killer app driving demand.
I’d buy that if ISPs were investing in research to find those killer apps, or weren’t actively seeking to whittle down connection speeds with tiered pricing plans or caps. But consumers are finding killer apps of a sort — only those killer apps interfere with the pay-TV side of the equation for cable guys and telcos that have invested in IPTV infrastructures. But even if the idea of another we-have-more-HD-channels-fight thrills you, the truth of the matter is that competition in broadband speeds will bring about the connected home.
No longer will just your computer always be on; your thermostat, your television, your appliances and your links to loved ones will be, too — and possibly throughout every room of your home. But that’s not going to happen for those without fat pipes. Which is why I and others found the National Broadband plan so disappointing. While it gets a lot of things right when it comes to boosting broadband adoption, it doesn’t really help drive innovation or ensure competition.
And the plan’s authors are aware of this. They offer the salve of data as a means to possibly protect consumers from overcharging and to shame providers into offering better service, but that’s going to require an activist FCC like the current commissioners are, and in a few years, who knows if that will be the case. And I am as excited about faster mobile broadband as anyone (maybe more), but mobile data isn’t going to replace wireline broadband — nor should we be content with those speeds.
I understand that having spent $19 billion building out a fiber network, Verizon would be justifiably upset over sharing its fiber with competitors. We also currently have a huge variety in our network providers that makes sharing lines difficult from both a technical and regulatory perspective. However, the type of open-shared network that Google is proposing is the fastest ways to get the U.S. big broadband quickly.
Since the FCC can’t get it done through the Broadband Plan (it isn’t even trying) and Congress decided not to get it done with the stimulus money (a few fiber projects were approved), then it’s up to the FCC and Congress to make it easier for cities to deploy their own fiber networks which can then be opened up to competition. That means making it possible to change the laws in the 18 states that make it difficult for municipalities to own fiber networks or offer competitive communications services, but will likely evolve as a states rights battle.
Right now, Google and consumer demand is our best hope for better broadband, which isn’t making me feel too great about the future. Anyone have a freezing lake I can dive into?
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Tomorrow is the last day municipalities can submit their applications to be the location for Google’s experimental fiber to the home network that will deliver 1 gigabit per second to homes. While not many are aware of how fast a Gigabit connection could be or what it could be used for, (our commenters think 3D television is a good use, the smart grid is a possibility and I’m partial to the idea of an always-on home, which I submitted) it’s pretty clear that a lot of municipalities sure want it.
Aside from some of the crazy stunts that mayors and towns have pulled in order to attract Google’s attention (swimming in frozen lakes! swimming with sharks!), I thought the greatest thing to come out of this is how towns are reaching out to their citizens using social media. Christopher Swanson, the project manager for getting Google Fiber to Duluth, Minn., says “Social media has been the most important part of our engagement. We did postcards and all kinds of things, but what has brought in the most involvement has been social media.” He credits social media with getting about 30 percent of citizens on board with the town’s fiber application.
My home town of Austin, Texas has set up a web site, sends out tweets and created a Facebook page with more than 5,000 fans. Looking around at other cities, the effort to engage citizens has encouraged city officials to use social media tools and citizens to engage with their governments. I hope that lasts, because that’s potentially farther reaching than the initial fiber effort.
That said, however, some of the engagement is a bit creepy. Check out the City of Asheville’s pandering of their students to Google. The elementary-school kids chanting, “I love you, Google” is great for the Google brand, but hard to watch. We’ve already discussed what it might cost Google to build out the network, which would serve between 50,000 and 500,000, and have outlined other areas of the world that have gigabit connections already.
So while they may only be just one Google testbed network announced some time this year, the benefits could accrue to municipalities through a more connected and engaged citizenry and hopefully through showing the U.S. what it means to have a truly open fiber network that could boost competition for broadband connectivity. From Austin’s FAQs on the topic:
Moreover, Google plans to open the network to competitive service providers. This means you may choose to buy your service from a completely different company – possibly a local Austin service provider. You old-timers will remember the dialup modem days, when we used to be able to choose from a long list of Internet service providers. The Google open network would restore that choice, but this time running at gigabit speed.
This openness is the answer to the lack of competition when it comes to broadband access in the U.S. today, not more data or wireless networks as the National Broadband Plan is trying to offer as a salve. So as we countdown to the application deadline, and the eventual network build out, I’m hoping the entire process makes its mark on cities even if they don’t win.
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