Why Boston needs to build its own fiber-optic Internet network—now.
Our savior was supposed to be Verizon, which started building its FiOS fiber-optic network about a decade ago. As Verizon installed FiOS in some suburban Boston communities, it seemed that it would be only a matter of time until it got to the city. But in 2011, Verizon cut a $3.6 billion deal with Comcast and other cable companies that allowed each side to sell services to the other’s customers. The deal led to speculation among analysts that Comcast and Verizon had declared a cease-fire in their competition over the cable, Internet, and wireless markets. It also triggered a Justice Department investigation. (Verizon, for its part, announced that it would stop building out its FiOS network, but would continue to offer its services to existing markets.) In any case, the partnership was great for corporate cost savings but terrible for consumers. In Kansas City, Google’s entrance pushed the lumbering Internet provider Time Warner to speed up its connections, but here in Boston, we have even less competition than we did before.
And we’re not alone. America, once the global leader in average Internet speed, now ranks eighth in the world. Just 7 percent of our Internet connections are fiber, according to the Organization for Economic Development and Cooperation. Compare that with Japan, where 65 percent are fiber, or South Korea, where it’s 60 percent. Since our telecoms are focused on profit, rather than on developing our local or national economies, they’re not pushing forward. (Comcast does offer a fiber package to business customers, but it is prohibitively expensive, costing thousands of dollars a month.) “Left to their own devices, private companies will consolidate and price-gouge,” says Susan Crawford, a former technology adviser to President Obama and a director at Harvard’s Berkman Center for Internet & Society. “This is an area with high up-front costs and capital-intensive infrastructure—business won’t serve all parts of Boston fairly unless there’s government intervention.”
And that’s just what’s happened in some cities and towns. Acting as their own Tennessee Valley Fiber Authorities, 89 American cities and towns have built their own fiber networks, and more than 180 others have wired partial systems, according to the Institute for Local Self-Reliance. Tiny Bristol, Virginia, for example, now boasts 1-gigabit Internet speeds—and has saved $10 million in service costs over its first six years in operation. Small cities such as Chattanooga, Tennessee (170,000 residents), and Lafayette, Louisiana (120,000), have each launched networks that feature speeds up to 1 gigabit, and they’ve each seen the creation of thousands of jobs. Chattanooga’s $220 million network sounds expensive, but a study by the Journal of Applied Business Research predicted that the city would see more than $350 million in economic impact in the program’s first decade, mostly from increased tax revenue related to job growth. Lafayette’s network, meanwhile, cost $125 million, but will result in consumers saving between $90 and $100 million on their Internet bills in its first 10 years.
It turns out that when you don’t need to make a big profit, super-fast Internet can be downright affordable.
Building our own municipal network would pose serious challenges. There is the expense, to start. Experts estimate that it would cost $500 to $2,000 to wire each home, so we’re looking at a price in the hundreds of millions of dollars. (Of course, given that 80 percent of the cost is labor, we’d also be creating a lot of jobs with all that digging up of streets and running of cables on telephone lines. Fiber also lasts for decades, and the speed is easily upgraded.) Beyond the price, though, is the question of whether the city could actually run such an advanced network and make it profitable—or at least break even.
But here’s the thing: Boston’s already running a fiber network, and it’s working fantastically. In 2009 the city started a $6 million project to run fiber to municipal buildings like City Hall, fire stations, and libraries, each of which were previously paying around $1,000 a month to private companies (mostly Verizon) for phone and Internet services. Today, more than 200 municipal buildings are wired with fiber. According to Oates, the city’s CIO, that’s resulted in $1.5 million in annual savings—meaning that in just four years, the city will have made its money back on the installation costs.
And it’s not like we need to build out a fiber network that reaches every home in just one year. Instead, we should follow the lead of other cities and take small steps. Santa Monica, for example, started putting fiber in the ground whenever its streets were being torn up for various projects, and now has a burgeoning fiber network connecting businesses. Seattle and Chicago, meanwhile, have recently launched pilot projects with Gigabit Squared, a new broadband provider, to test the public’s interest. Instead of building a network for the whole city, they’re bringing fiber service to just a handful of neighborhoods to start.
A similar pilot project would make sense in Boston, where we could extend the city network we already have to a few key areas. Like, say, the places where we’d wanted Google Fiber to run: Longwood Medical Area, the Innovation District, and the universities. Affordable fiber service would not only help our existing tech companies, it would also encourage local entrepreneurs to stay—and others to settle here.
Oates says that while he’s keeping an eye on experimentation in other cities, “there is not a pilot project in the works right now.” There should be. Menino ought to use some of his remaining political capital to propose a system that would help cement his reputation as the ultimate urban mechanic—and if he doesn’t, all of the mayoral candidates should be clamoring for a faster, brighter technological future for the city. “As a city of knowledge workers, it’s a particularly good place for a fast information network,” says Crawford, of the Berkman Center. “If any city in America can do it, it’s Boston.”