I’m excited about the potential of gigabit broadband services, but I also know it is unlikely my current broadband service provider will offer these kinds of speeds within this decade or perhaps even next. If I should be so lucky to have access to gigabit speeds (heck, I would be happy with 50Mbps) in the foreseeable future, it will likely be provided through my own city government in some form of a public-private partnership.

This decision will come about – not because they want to service the residential market – but driven primarily by economic development. And while they are running fiber rings about the city, why not extend those services to the consumers, who remain under-served by the incumbent.

The Gigabit Challenge

On January 18, 2013 FCC Chairman Julius Genachowski issued his Gigabit Challenge – challenging broadband Internet providers and local and state governments in the United States to bring at least one gigabit-speed Internet community to all 50 states by 2015.

This follows one of the 6 mains goals of the National Broadband Plan (Goal #4) that “every American community should have affordable access to at least 1 gigabit per second broadband service to anchor institutions such as schools, hospitals and government buildings.”

The current thinking is that once community anchors are connected to gigabit speeds, it would presumably become less expensive and more practical to get the same speeds to homes.

This is a lofty goal – but not impossible. At present, Gigabit broadband networks exist in only thirteen states – with the majority provided by municipalities and the remainder a combination of competitive operators and public-private partnerships. However, activity by two organizations – The University Community Next Generation Innovation Project (also known as Gig.U) and US Ignite are hoping to not only accelerate the timeframe, but expand beyond the current target.

• Gig.U is a group of 30 leading research universities from across the United States seeking to accelerate the deployment of ultra-high-speed networks to leading U.S. universities and their surrounding communities.
• US Ignite is focused on the creation of next-generation Internet applications that provide transformative public benefit across six focus areas: Education & Workforce; Energy; Health; Public Safety; Transportation and Advanced Manufacturing. Their goal is over the next five years is to create 60 next-generation applications and 200 community test beds where applications can be researched, developed, tested, refined, and deployed.

The Cost Challenge

In many instances, the two biggest reasons major network operators are not investing in new infrastructure to support 1 Gigabit are (1) cost and (2) the belief that “there are not many applications which would require these types of bandwidths in the foreseeable future”. Another reason cited for not making investments in faster networks has been lack of demand. Many operators state that in markets where they are offering premium speeds, only a very small fraction of the customer base opts for that service.

The cost issue is understandable – there is significant risk that the returns for the investor do not justify the investment.

From a competitive perspective, cable operators have a less expensive upgrade path, as DOCSIS technology provides a clear upgrade path that could easily enable 1Gbps broadband services. On the other hand, the upgrade path for Telcos is significantly steeper, takes significantly longer and is more cost-prohibitive – often requiring the replacement of copper cables with fiber optics.

This challenge, while daunting, is not insurmountable. But it may require operators to partner with its communities in order to reduce the risk and the cost, while enabling higher revenues through new and different services.

The Applications Challenge

Yes, it is fair to say - at present - the vast majority of broadband users would have a difficult time consuming so much bandwidth and yes, it is fair to say that many ISPs could not meet such heavy capacity demands. But that is today and Cisco’s VNI annually illustrates just how fast bandwidth demand is growing.

According to the most recent VNI (published in May 2012), Global IP traffic has increased eightfold over the past 5 years, and will increase threefold over the next 5 years. Overall, IP traffic is expected to grow at a compound annual growth rate (CAGR) of 29 percent from 2011 to 2016. Based on the growth of streaming video services, it is likely that this forecast is low.

Gigabit networks will bring about a revolutionary change in how people use the internet and will be a catalyst to a host of new devices and applications that can take advantage of these speeds.

Applications such as 3D imaging and printing, haptic devices, health pods (virtual doctor’s office) as well as immersive applications that benefit education and health care will become more common place and cities will actually become smart.

The Google Challenge

Google was on the right path four years ago (April 8, 2009), when it made the following recommendation as part of its reply comments to the FCC Notice of Inquiry “In the Matter of A National Broadband Plan for Our Future”, GN Docket No. 09-51:

“As one example, the Commission should select several U.S. communities as test beds for installing a minimum of 1 Gbps fiber connection to every residential household. By creating these test beds now, the agency can learn valuable lessons about the various technological and market challenges associated with such private sector deployments. These learnings in particular can foster greater understanding about where to place the appropriate dividing line between private sector and public sector support for build-outs of broadband plant. The test beds also can pave the way to establish loftier benchmarks for future fiber build-outs.”

This of course did not happen – but imagine where the world might be if the FCC had put even a small percentage of its stimulus funds towards this recommendation – it might have removed some of the hesitation to invest.

Instead, Google announced its “Think Big with a Gig” program in February 2010, with plans to build and test ultrahigh-speed broadband networks for up to 500,000 customers. Issuing an RFI, Google basically asked cities across the U.S. why they should be a Gigabit city and 1,100 responded.

Kansas City was selected as the first Google Fiber city and Austin, Texas is set to become the next.

One thing that was most interesting about Google’s approach is that they are building to demand. Google divided Kansas City into fiberhoods of 250-1,500 households and set a customer participation goal (anywhere from 5 percent to 25 percent. And to motivate people’s competitive spirit, Google Fiber prioritized its build-out to those with the greatest participation and those that met their pre-registration goals.

Economic Development Key Motivation (and Bragging Rights!)

Many cities understand that bandwidth has significant external benefits for their communities including economic development as well as acting as an essential foundation for health care, education and public safety. It also gives them bragging rights – just take a look at Chattanooga which has rebranded itself the “GigCity”, while Kansas City is now calling itself “Silicon Prairie”.

What is most notable about Chattanooga's gigabit fiber network was that it was put in place by the municipal electric utility, EPB, to improve power delivery to its customers. Improving city services was the key driver, but realizing the same infrastructure that provides the control network for the utility could also be used to deliver Internet connectivity (once the fiber network was in place) was an added bonus.

Chattanooga is providing a wealth of examples of how the city is utilizing the capabilities afforded by its Gigabit network. Beyond smart grid applications, the city is using its network to monitor and control downtown areas, which have improved safety and reduced crime; as well as the implementation of intelligent sensors for street lighting and traffic signal control. At the end of 2012, the city had built more than 50 apps to use the fiber connections, and more are on the way.

But perhaps most importantly are the economic benefits that these types of networks afford. In the case of Chattanooga, its network has been instrumental in the creation of 6,000 new jobs and generated $400 million.

Taking a Leap of Faith

A handful of operators, communities, utilities and municipalities have taken a leap of faith towards a gigabit future and are already seeing a positive return on that investment. More importantly it is spurring activity in other cities – as more communities understand the benefits to its economy and quality of life.

The path towards 1 Gigabit will not be simple; it will not be fast; and it will not be easy. But it is not impossible. Innovators such as Google and the grassroots efforts of municipalities, communities and universities has the potential to spur investment, so that we may all enjoy the benefits of Gigabit broadband.

And we have already seen an example of this – as AT&T announced its intent to build a 1GB fiber network in Austin, assuming it will be granted the same terms and conditions as Google on issues such as geographic scope of offerings, rights of way, permitting, state licenses and any investment incentives.

Who says miracles can’t happen?!