Why Boston needs to build its own fiber-optic Internet networkâ€”now.
In February 2010, Google sent American mayors into a tizzy when the company announced that it wanted to build an experimental, blazingly fast fiber-optic network for one lucky city. It would feature speeds more than 100 times faster than standard cable broadband service (1 gigabit per second, compared with roughly 7 megabits per second) but would cost users only $70 per month. More than 1,100 towns and cities applied, with elected officials scrambling to come up with attention-grabbing gimmicks. Sarasota, Florida, for example, temporarily renamed one area â€śGoogle Island,â€ť while Peoria, Illinois, flew a plane trumpeting its candidacy over Googleâ€™s headquarters.
Here in Boston, we responded as one might expect, with an attitude that suggested Google would be foolish to build a network anywhere else. The mayorâ€™s office proclaimed us â€śGoogle-readyâ€ť and released a nine-minute video touting Boston as a global metropolis with a small enough footprint to make the running of pricey fiber-optic cables relatively affordable. The city also played up our role as a nexus of technological, academic, and healthcare research. What better use for a lightning-fast fiber network than connecting Bostonâ€™s â€śopportunity hubâ€ť of the Longwood Medical Area, the Innovation District, and the universities?
Unfortunately, Kansas City won the Google Fiber Lottery. (Boston, according to Bill Oates, the cityâ€™s chief information officer, was on the â€śshort list,â€ť although apparently not short enoughâ€”in April of this year, Google Fiber announced that its second and third cities would be Austin, Texas, and Provo, Utah.) The Google Fiber service debuted in November 2012 to rave reviews, adding kindling to an already hot startup scene in Middle America and earning Kansas City the nickname â€śSilicon Prairie.â€ť Other cities are now building their own networks, without the help of a cash-flush tech or telecom company. Not all of those networks are as fast as Googleâ€™s, but theyâ€™re still as much as 10 times faster than Comcastâ€™s, for about the same price (roughly $50 to $70 per month). And the nature of fiber makes upgrading them to be even faster relatively easy.
Boston, though, remains no closer to an affordable fiber-optic network than it was three years ago, despite the fact that City Hall had it absolutely rightâ€”weâ€™re the perfect place to build one. Our cutting-edge hospitals could leverage the networkâ€™s speed for medical imaging and experimentation in remote care; startups in the Innovation District could break new ground in gaming and Web applications; and dorm-room geeks could harness the speed to build the next big company. We donâ€™t know exactly what people will build yet, just like we couldnâ€™t predict what would happen when communities started to migrate from dial-up Internet to broadband. What we do know is that people are increasingly using data-hungry technologies like cloud computing, video chatting, and video streaming, and our current network is becoming outdated.
If we donâ€™t upgrade soon to a network thatâ€™s dramatically faster than what we have now and cheap enough for everyone to afford, weâ€™ll miss out on all that exciting tech growth. Letâ€™s stop waiting for a fiber-optic savior and build our own network right now.
The Internet may have started as a luxury plaything (not unlike cable TV or satellite radio), but is now a basic utility thatâ€™s necessary for running a modern business. A recent report from the Bay Area Council Economic Institute found that jobs in technology are growing three times faster than those in the rest of the private sector. Each of those jobs also pays 17 to 27 percent more and helps create 4.3 other jobs in the overall economy.
Boston is constantly calling itself an innovative tech hub, but our economy is only as strong as the infrastructure supporting it. Unfortunately, the odious telecom companies hold a monopoly over our wired networks and stubbornly refuse to improve them. Comcast, which provides the majority of Internet service to Boston residents and businesses, has so far found its current broadband Internet serviceâ€”which runs on the cable network they built decades agoâ€”to be perfectly adequate, not to mention insanely profitable for shareholders (the company produced $6.2 billion in net income in 2012).
Comcastâ€™s interests, though, arenâ€™t the same as the cityâ€™s. â€śRight now, Boston is trying to attract businesses that need next-generation connections and hoping that Comcast will provide those,â€ť says Christopher Mitchell, of the Institute for Local Self-Reliance, a group that advocates for communities to oversee essential systems. â€śBut Comcast has no incentive to provide those services.â€ť
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 otherâ€™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, Googleâ€™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 weâ€™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 itâ€™s 60 percent. Since our telecoms are focused on profit, rather than on developing our local or national economies, theyâ€™re not pushing forward. (Comcast does offer a fiber package to business customers, but it is prohibitively expensive, costing thousands of dollars a month.) â€śLeft to their own devices, private companies will consolidate and price-gouge,â€ť says Susan Crawford, a former technology adviser to President Obama and a director at Harvardâ€™s Berkman Center for Internet & Society. â€śThis is an area with high up-front costs and capital-intensive infrastructureâ€”business wonâ€™t serve all parts of Boston fairly unless thereâ€™s government intervention.â€ť
And thatâ€™s just whatâ€™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 speedsâ€”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 theyâ€™ve each seen the creation of thousands of jobs. Chattanoogaâ€™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 programâ€™s first decade, mostly from increased tax revenue related to job growth. Lafayetteâ€™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 donâ€™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 weâ€™re looking at a price in the hundreds of millions of dollars. (Of course, given that 80 percent of the cost is labor, weâ€™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 profitableâ€”or at least break even.
But hereâ€™s the thing: Bostonâ€™s already running a fiber network, and itâ€™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 cityâ€™s CIO, thatâ€™s resulted in $1.5 million in annual savingsâ€”meaning that in just four years, the city will have made its money back on the installation costs.
And itâ€™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 publicâ€™s interest. Instead of building a network for the whole city, theyâ€™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 weâ€™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 stayâ€”and others to settle here.
Oates says that while heâ€™s keeping an eye on experimentation in other cities, â€śthere is not a pilot project in the works right now.â€ť 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 mechanicâ€”and if he doesnâ€™t, all of the mayoral candidates should be clamoring for a faster, brighter technological future for the city. â€śAs a city of knowledge workers, itâ€™s a particularly good place for a fast information network,â€ť says Crawford, of the Berkman Center. â€śIf any city in America can do it, itâ€™s Boston.â€ť
Source URL: http://www.bostonmagazine.com/news/article/2013/05/28/boston-fiber-optic-internet-network/