Google Data

Posted by Derek Slater, Policy Analyst

It may sound strange, and it's certainly not what we're used to. Today we have a "carrier-centered" model; phone and cable companies spend billions to build, operate, and own the "last-mile" connection -- the copper, cable, or fiber wires that come into your house. Individual consumers then pay for particular services, like phone service or Internet access.

In turn, we tend to think about broadband deployment in carrier-centric ways. If we want to see super-fast fiber connections rolled out to consumers, the main question appears to be whether carriers have appropriate incentives to invest.

But there's no law of nature that says this is the only possible model. Many businesses, governments, universities, and other entities already own their own fiber connections, rather than leasing access to lines. It may also be possible to find ways for consumers to purchase their own last-mile strands of fiber.

Here, as anywhere, there would be certain advantages that come with ownership over renting. No one necessarily needs to own skis or a car, but many of us do. If you owned your own fiber, you'd be able to connect it to a service provider of your own choosing. Over time, you might save money, and it could make your house more valuable to have a fiber "tail."

This may all sound rather abstract, but a trial experiment in Ottawa, Canada is trying out the consumer-owned model for a downtown neighborhood of about 400 homes. A specialized construction company is already rolling out fiber to every home, and it will recoup its investment from individual homeowners who will pay to own fiber strands outright, as well as to maintain the fiber over time. The fiber terminates at a service provider neutral facility, meaning that any ISP can pay a fee to put its networking equipment there and offer to provide users with Internet access. Notably, the project is entirely privately funded. (Although some schools and government departments are lined up to buy their own strands of fiber, just like homeowners.)

The main challenges with this model are economic, rather than technical. Most importantly, ownership has to be made appealing and affordable to consumers. The construction company is using conservative estimates that only 10% of homeowners will sign up and there will be a per-customer cost of $2700. If you assume 50% take-up, then the per-customer cost drops to $1100. Both figures might seem like a lot, but people pay for a variety of improvements to their home -- like remodeled kitchens, or a deck -- that also cost large sums.

This model faces other significant obstacles as well and it may only be possible in certain circumstances, if it's practical at all. But the only way to really figure that out is to experiment. Cable television started out as CATV -- community antenna television, an experiment by individual entrepreneurs and rural towns to deliver broadcast signals across longer distances. The Internet started as an experiment in the research community before becoming the worldwide network we know today.

It's also worth considering that, as recently as a few decades ago, personal telephones were unheard of -- the telephone was owned by Bell and simply part of the network. Similarly, the very idea of a "personal" computer used to seem ridiculous, and people relied on sharing access to mainframes. Sure, there are differences between owning your own computer and your own Internet connection, but perhaps one day we may see that the differences weren't as great as we thought.


The Ottawa trial was driven forward by Bill St. Arnaud, Chief Research Officer at CANARIE, a nonprofit research group devoted to promoting advanced network infrastructure in Canada. If you want to learn more about this idea, check out his presentations here.