Consumer-Owned Fiber Could Boost U.S. Bandwidth, Professor Says
A “do it yourself” broadband model in which consumers buy their own last-mile fiber connections could be a path to more broadband deployment in the U.S., said Columbia Law School professor Tim Wu. He and Google policy analyst Derek Slater presented their paper, “Homes with Tails,” in a Friday New America Foundation panel. The proposal met some resistance from panelists representing Verizon and the Information Technology and Innovation Foundation.
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Americans have a long history of building for themselves what industry can’t provide, Wu said. For example, decades ago rural communities that lacked phone service built their own cooperative phone networks, he said. Boosting Internet bandwidth in the U.S. “is a daunting problem, no matter what angle you look at it from,” Wu said. The private sector must justify spending “billions and billions of dollars” to deploy, with no clear “killer” application to attract consumers, he said. And the government hasn’t determined definitively what role it should play, he said. “It may be time for consumers to take matters into their own hands.”
Under the “homes with tails” model, consumers would buy last-mile fiber connecting their homes to a central facility. The facility would be open, providing equal access to multiple service providers, Slater said. Fiber would be sold like “condominiums,” he said. Private firms or municipalities would sell individual fiber strands to consumers, with sellers managing maintenance, he said. Buying a tail for a home could cost households $2,000 apiece, not a lot in light of the “tens of thousands of dollars” many spend on renovations, Wu said. Government could sweeten the deal by giving tax credits to homeowners or renters who buy connections, he said.
Downtown Ottawa is testing a consumer-owned network, said Slater. A company that builds fiber networks there, P2P Fiber, partnered with electricity resellers, and consumers can choose to get fiber bundled with their electricity service, he said. Consumers have shown significant interest in the project, he said. But it might not work everywhere -- the test was run in a wealthy area, Slater said. However, experiments like that one are integral to spurring interesting new ideas, he said.
Some panelists voiced resistance to the idea. ITIF President Robert Atkinson said the model is probably more practical in underserved areas than in places with existing fiber and cable infrastructure. People who already have high-speed might not see value in buying their own fiber connections, and would opt to keep their existing service, he said.
The consumer-owned fiber model seems to be “another form of unbundling,” requiring government-mandated interconnection, said Link Hoewing, a Verizon assistant vice president. Building fiber is a “a very high fixed-cost investment, so recovering that cost is important,” he said. “We've kind of gotten away from [unbundling] in the past, and I think it hasn’t worked.” Retorted Wu, “Ownership of property is not unbundling.” And companies like Verizon still could recover costs, because consumers would be paying the carriers thousands of dollars for the fiber, he said. “It could replace the … money you end up making back through retail services, so you wouldn’t have to count on selling that triple-play package.”