So far, 2014 has given us the XXII Winter Olympics, FIFA World Cup (congrats to Germany!) and Gigabit Broadband. And while the excitement from the two major sporting events has already waned, the excitement over Gigabit Broadband is just getting started.

Over the past year, the number of proposed and live gigabit networks has accelerated. The question is whether these proposed networks are setting customer expectations too high – especially in markets where they are “investigating” the opportunity, but may never actually build.

Imagine you live in a city that is being considered for gigabit broadband and then is not selected. That is a significant let down – especially if you are unhappy with your current provider. But even if your town is selected – there is no guarantee that your particular community and/or street will get this service. And for those that do – the wait for actual service could be years.

Let’s take a look at Austin, TX. Google Fiber announced its plans to launch in this market in April 2013, with expected availability of services in mid-2014. Although there is active work to build out the distribution network within Austin, no information on “fiberhoods” has been released and customer sign-ups are not expected to open until the end of the year – meaning actually connections are not likely until mid-2015 – and that is for the early areas. In the meantime, AT&T is rapidly upgrading its existing network to offer faster speeds – maybe not Gigabit speeds, but it’s better than nothing and in many cases, better than the alternative options offered by cable. Nonetheless, I imagine there are a number of Austin, TX residents that are disappointed by the slow pace of Google Fibers plans.

Time to Market Remains Biggest Challenge

For most FTTH networks – the biggest challenge is time-to-market.

It takes time to survey the neighborhoods to determine where and how the network will be built. Then there is the time it takes to get community input and city approvals, secure right of way and pole attachment agreements, and lots and lots of permits. After all of this is done, it’s time to start marketing the service and securing customer demand.

In some markets, the time between initial planning and the start of deployments has been multiple years (5+), but on average it typically runs about 12-18 months.

The more successful roll-outs of FTTH have learned that the best approach to building out the last mile is based on demand. As such, more and more operators are turning to the pre-registration model favored by Google Fiber – which sets a predetermined minimum baseline of subscribers, before it begins a build. The City of Los Angeles is considering this approach as it looks to provide city-wide gigabit services.

Jumping on the Gigabit Bandwagon

Google Fiber was certainly not the first operator to roll-out gigabit broadband services – that distinction belongs to a handful of ISPs in Sweden as far back as 2006. But it took Google’s interest in building and selling gigabit broadband services to set the market on its current path and put the term gigabit in the vernacular for consumer broadband.

In many cases, we are witnessing municipalities jumping on the gigabit bandwagon simply out of fear of “falling further behind”. In other cases, it’s about bragging (and marketing) rights and the ability to claim they are part of the exclusive “gigabit community”. In some instances – it seems more of a threat to the incumbent operator to “put up or shut up” – and frankly, this seems to be fairly effective. In the U.S. market, this threat has been somewhat successful, as a number of operators are upgrading their networks to vastly improve speeds and services. Finally, it is the simple recognition that the time to act is now – understanding that while most consumers really don’t need 1Gb broadband today – by the time the network is built – the story may have a different ending.

Economic Development Remains #1 Driver

After reviewing numerous proposals on next-generation broadband – the number one driver for investing in this infrastructure has been economic development - the ability to attract new businesses and business investments into local economies.

According to officials from Kansas City (the 1st Google Fiber city) - while it is still too early to see any tangible economic benefits from having gigabit services, it has ignited the entrepreneurial community. More people are working from home and more home-based businesses have emerged – but it will take a few years to be able to quantify the economic impact.

Chattanooga will go on record to say that their gigabit network has been instrumental in the creation of 6,000 new jobs and generated $400 million in new revenue. While many other municipalities will state that their broadband networks were instrumental in attracting new business.

But this wasn’t always the case.

In Chattanooga, the build out of fiber was driven by the utility (EPB) to improve power delivery to its customers. Improving city services was the key driver, but they soon realized the same infrastructure that provided the control network for the utility could also be used to deliver Internet connectivity.

In the case of Sweden’s Stokab, the initial network mainly connected public institutions and universities, then moved on to support large enterprises and government agencies and finally moved towards providing residential services, but it took over a decade to get there.

This is a similar strategy being put in place by Gig.U in the U.S., but hopefully with a slightly quicker timeframe.

From the minority to the majority

According to Akamai’s latest State of the Internet Report (1Q14), the global average broadband speed was 3.6Mbps, while the peak speed was 21.2 Mbps. Even in markets with significant FTTH deployments such as South Korea, Hong Kong, Singapore and Japan – the fastest peak speeds were well below 100Mbps – let alone 1Gbps. So it is safe to say that gigabit broadband remains in the minority.

How and when will it become mass market? A long, long time.

Getting from multi-megabits to a gigabit will remain challenging for most operators- especially if there are concerns regarding demand and return on investment. As such, it would make sense for EVERY operator to at least commit to a pilot trial for gigabit services to better understand its own deployment challenges and gauge customer interest.

In the meantime, let’s continue to encourage smaller operators and municipalities to “think big with a gig”. Eventually, all of these smaller pieces will be woven together to form a larger footprint that will be harder for the bigger guys to ignore.