CenturyLink is upgrading its existing fiber architecture in west Omaha using GPON and will serve homes and businesses. Residential customers can bundle the gigabit speeds with existing video and voice service for $79.95 or subscribe to standalone service for $149.95. CenturyLink competes against Cox Cable in Omaha, which offers a 150 Mbps service.

This is a pilot project for the telco, and will cover its 48,000 customers in Omaha. When I asked CenturyLink why it was upgrading to a gigabit, a spokeswoman emailed the following:

CenturyLink needed to upgrade its existing fiber architecture in Omaha and wanted to create a more robust network that delivers fiber optic cable directly to homes and businesses. …We will evaluate our 1 Gbps offer to determine further deployment of this advanced technology.

Better broadband = More innovation

As a broadband reporter with a passionate belief that more broadband is better for our society and our ability to innovate, I’m thrilled to see more and more companies testing the waters on speed upgrades.

When Google launched its roll-out plans to build out a gigabit network in Kansas City, it showed that it was willing to enter a capital-intensive business in order to protect its access to the consumer. At that time, ISPs were implementing caps and making a lot of noise about bandwidth hogs and the cost to upgrade networks for people watching video over the top.

Yet, after Google announced Austin, Texas in April as its second location for Google Fiber, AT&T issued a press release saying it too wanted to use Google’s tactics to lay fiber to the home in Austin. It remains to be seen if AT&T takes those steps, but it’s great to see AT&T considering it. A week after Austin, Google said it purchased the fiber network in Provo, Utah (it apparently cost Google $1) and planned to turn on a gigabit network later this year. In Kansas City, Google charges $70 for gigabit-only service and $120 for a gigabit plus TV.

Municipalities and smaller telcos are also getting in the game. Last Friday I covered Vermont’s telco, VTel, and its existing gigabit network that residents can connect to for $35 a month. In a talk with the CEO of VTel, he told me that the he thinks that gigabit fiber is the only way to bring residents and his business into the future. But his $151 million investment costs were offset by $94 million in government loans and grants.

Meanwhile, Century Link isn’t totally throwing its conservative talking points to the wind. In the release announcing the gigabit construction it added a note of caution:

The company will evaluate its Omaha 1 Gbps offer before determining further deployment of this advanced technology, considering such factors as positive community support, competitive parity in the marketplace and the ability to earn a reasonable return on its investment.

I’m curious about all of those things myself. If a traditional telco can invest in gigabit networks and charge a fair rate for them, then I’ll expect to see them pop up in more places. And not just in places targeted by Google.

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It turns out that between the first of this year and April 8 (when I got the data from Ookla) roughly one in 10,000 devices in the U.S. are surfing at gigabit speeds and roughly 1 in 5,000 homes worldwide can match them. Ookla runs the popular Speedtest.Net service and got this data from users who tested their connections during that time period.

Unfortunately, the data on this is relatively inexact, because the art of measuring a gigabit is complicated. As late as last summer when Google launched the first plans for a fiber to the home buildout in Kansas City, the search giant had to work with Ookla to upgrade the test to even be able to read a gigabit. Even so, some customers with a gigabit might not show up because their Wi-Fi routers or computers can’t achieve those speeds and, thus, throttle them back to a mere 100 Mbps or so.

And the numbers provided by Ookla actually measure customers with speeds of above 800 Mbps, which is what it classifies as a gigabit. In the U.S. only 4,110 people have test results at that speed out of 45,468,731 people who used the Ookla tests. Globally, 34,721 users have speeds that high out of 224,404,945 tests. But, clearly not every broadband user is running Speedtest.net or has the right equipment.

Ookla also provides data on the number of people whose connection speeds are 300 Mbps or greater. In the U.S. this was about 51,100 devices or about 11 in every ten thousand users. Globally it was 204,315 devices or 9 in every 10,000 users.

For additional data points, we can turn to the Fiber to the Home Council, which said a few weeks ago that 640,000 subscribers are buying connections of 100 Mbps or more across North America. That’s a significant number, although the FTTH Council is measuring capacity that is 10 times less than what a gigabit connection can offer. For reference, the FCC in February noted that the average U.S. subscribed broadband speed is now 15.6 Mbps, representing an average annualized speed increase of about 20 percent. And below is a chart from FCC data at the end of 2011 showing the distribution of broadband speeds at the time.

This chart measures both wireless and wireline speeds as of Dec. 2011.

But it looks like the FTTH Council — as well as Google’s experience in getting 90 percent of the neighborhoods in Kansas City signed up for fiber — can tell us something definitive about gigabit connections: People want them. When fiber-to-the home is offered 44.8 percent of the homes passed take the service. Given that those are generally the most expensive connections, that’s a pretty high take rate.

So it looks like even a few thousand Kansas City, Austin, Texas or Provo, Utah homes connected via Google Fiber will not only significantly change the percentage of gigabit customers in the U.S. but also around the globe. Still, we have to start somewhere.

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AT&T plans to build a gigabit network in Austin, Texas according to a company release Tuesday. On any day this would be big news, but Google just announced its own plans to build a fiber to the home, gigabit network in the Texas capital. Looks like Google’s plans to tweak the incumbent broadband players is working — at least at the press release level.

Google’s Kevin Lo said earlier today that the Google network won’t be available until mid-2014 and it’s unclear when AT&T’s network will be rolled out. Larry Solomon, a spokesman confirmed that AT&T’ plans to build a fiber-to-the-home network to “homes and buildings” in Austin. However, the timing depends on how soon AT&T can work with city and state officials to roll out service in a manner similar to how Google rolls out broadband in Kansas City.

In Kansas City Google deploys service in areas where a certain percentage of homeowners have already committed to taking the service. This helps it save money on deployment, because it can avoid building out to areas where interest is low and because it can deploy “in bulk” to neighborhoods when it goes out to dig trenches and connect homes.

Currently AT&T provides a fiber to the node product called U-verse that offers speeds of up to 24 Mbps down. However, as Google expanded in Kansas City, it received some concessions around permitting that the incumbents later complained about.

As a result, both Time Warner Cable and AT&T were granted similar benefits in Kansas City. However, in Austin, the agreements that Google has signed with the City of Austin are no different than the ones that AT&T and Time Warner have signed according to Laura Morrison, an Austin city councilwoman. Yet, AT&T in its release of the gigabit network seems to imply otherwise. From the release:

Today, AT&T announced that in conjunction with its previously announced Project VIP expansion of broadband access, it is prepared to build an advanced fiber optic infrastructure in Austin, Texas, capable of delivering speeds up to 1 gigabit per second. AT&T’s expanded fiber plans in Austin anticipate 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. This expanded investment is not expected to materially alter AT&T’s anticipated 2013 capital expenditures.

When asked about AT&T’s plans, Google’s Lo responded “We think that Gigabit speeds are the future of the Web, and we believe that choice and competition are ultimately better for users.” This is good because aT&T’s Solomon says that AT&T plans to offer “competitive” rates on a gigabit and that it plans to bundle existing AT&T services with broadband packages. Solomon was vague on timing, since AT&T needs to work with the city to ensure it can build out the way it wants to.

As an Austin resident and broadband lover, I’m ecstatic that I might soon have not one, but two gigabit capable networks. Of course, with so little known about the cost, timing or the locations of either Google’s or AT&T’s network, I’ll wait to get out my party hat.

Updated at 12:01 PT to reflect incorrect information on the AT&T plans. Updated again at 12:27 PT after AT&T clarified further that it is planning a fiber to the home network.

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The number of households connected with FTTH now stands at 9.7 million, an increase of more than 20 percent over April 2012.

Most of the cost savings associated with FTTH deployments came from an end to costly maintenance and down time on telco networks, which one would expect if you are going from an aging DSL network to a newer network. However, offering fiber also enabled these smaller and mid-sized telcos to offer TV offerings as well as faster speeds, which enables them to compete against cable or satellite providers.

While in North America the lion’s share of fiber to the home deployments are deployed by Verizon’s massive FiOS build out and a similar (but smaller) Bell Aliant roll out in Canada, the survey notes that over 600 smaller ISPs have deployed fiber to the home in some or all of their footprints and about 100 municipalities have also built out networks. It also found that more than 640,000 North American households now get 100 Mbps service through a FTTH network, and many of those connections offer the same speeds for both uploads and downloads.

Google Fiber in Kansas City and EPB Chattanooga in Tennessee both got a shout out in the release accompanying the survey for their gigabit connections. And for those wondering why their ISP would spend the money to deploy fiber to the home, it’s clearly something customers are warming up to — there’s a 44.8 percent take rate in homes passed — a number that is on the rise.

The survey was conducted for the council by RVA LLC and involved more than 350 telecommunications providers across North America.

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But of course, that’s not the only stat users might care about, which is why the FCC measures 13 different variables as part of its data collection efforts here. The data comes from Sam Knows and special routers sitting inside roughly 10,000 homes (I have one!). Those routers report on upload and download speeds, latency and customers’ service tiers to create a nationwide picture of broadband quality.

And in general people should be pretty happy. As the chart above shows, people are mostly getting what they pay for, with customers of AT&T most likely to feel short-changed. What’s most surprising about this data is that satellite has moved from being pretty spotty to achieving high throughputs even at peak times, thanks to new satellites launched in the last two years. Sure, the service maxes out at 12 Mbps, but customers are getting those 12 Mbps and then some.

What else should the FCC monitor?

With most customers getting within 90 percent of the advertised speeds, the FCC should turn to gathering other data as well. Last summer it asked for comments on how other factors such as data caps might affect broadband quality. For example, would a service with a cap that delivers high speeds most of the time be as good as a service that has slightly lower consistency but no cap? Those comments were due last month, but there’s no mention of data caps in the report so far. Maybe we’ll see it in the next go round of this data. The FCC plans also to take a look at even faster speed tiers (maybe a gigabit) in later reports.

And in general it looks like customers are moving up to higher speeds, especially if they are starting out on the slow side, as the chart below indicates. This is great. Getting more people online and subscribed to real broadband will be important in both closing the digital divide but also make it easier to design sites and services for more of the population. At those 1 Mbps and below speeds news stories featuring animated GIFs are a nightmare.

As a reporter, I’m glad the agency is collecting and reporting this data. Even though firms like Google and Netflix have options for measuring how your ISP stacks up, getting something objective from the FCC has a bit more cachet. Of course, the hope at the FCC is that the release of this data will help keep what is a relatively uncompetitive market for last mile broadband access a bit more honest.

But as a subscriber whose ISP isn’t quite delivering at the 100 percent mark — Time Warner Cable is pretty much the worst cable provider there is in terms of delivering on advertised speeds according to the chart below — there’s little I can actually do with this information. My only other option is the even-lower-performing AT&T. Add in the $10 rate hike I just got from TWC after I moved, and I’m left knowing that I have less-than-spectacular service but can do nothing to make it better.

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From the a story on Australian tech news site Delimiter on the topic:

Sources at NTT East and NTT West are unequivocal in their views that the biggest single reason for the slowdown in FTTH subscriber growth is the fact that many young subscribers now prefer to have their own ‘personalised’ LTE broadband services rather than paying for a household-based FTTH service – in addition to which they would be paying for a Smartphone LTE data plan anyway.

And while popular Japanese carrier NTT DoCoMo (NTT is not allowed to bundle its two services, according to analyst firm Telegeography) is killing its unlimited data plans for those with caps, it seems that some in Japan are still content to go completely untethered on pricey connections. Australia is concerned about the possibility of this trend developing because the government has spent billions on a nationwide broadband network.

However, the risk of millions of people dumping wireline connections is a possible problem for the U.S. market as well. While I know of only two people who rely solely on their mobile broadband for all of their internet access, faster speeds and a lack of interest in web services such as Netflix or Hulu mean that some people could find mobile a “must-have” service and fiber or any wireline service an extra cost without much value.

Photo: Shutterstock / Paveonephoto

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Google didn’t really explain its decision, but plenty of business people in Kansas City expressed confusion or complained about the decision in private, while lauding Google publicly. After all a $70, fiber-to-the-home connection for residents was still going to be great for the city. But the startup community wasn’t willing to settle — and since most of them worked from their homes, coffee shops or communal space anyhow, it wasn’t a big leap to decide to find a house in an area slated for fiber and move in.

Mike Farmer, CEO of Leap2 on the porch of the Hacker House in Kansas City

Vanwinkle is part of the new KC Startup Village, a loose coalition of startups in the Hanover Heights neighborhood of Kansas City that are either buying or renting homes to take advantage of their awesome broadband connections. Even former Kansas City residents are taking notice. I spoke with Shashi Jain, the founder of ad startup Grepic, who is in Portland, Ore. but returned home to talk about the startup community’s efforts around Google Fiber. “I might buy a house there,” he said. He mentioned that he heard a home in the neighborhood had just sold for $48,000, while noting, “they aren’t great houses.”

Great or not, they come with a gigabit, and will also soon feature an established community of entrepreneurs who you can work with and learn from. Some of the startups there other than Leap2 are Eye Verify, a biometrics company; RocketFuel Partners, a innovation consultancy; Local Ruckus, a local event finding app; and several others. However, not all of the Startup Village participants have fiber. Laura Lightbody, a director at RocketFuel Partners, says she’s next door to the Hacker House in a commercial office building with other startups — many of whom are exploring residential options. “I think this will be an exciting and growing trend because of the barriers to getting fiber to the commercial space,” Lightbody said.

The KC Startup Village is also actively recruiting others to their neighborhoods, as shown on the map below.

View KC Startup Village in a larger map

In general, I’d be hard-pressed to pass up a gigabit, but it’s also unclear exactly what the entrepreneurs will get out of it yet. After all, Leap2 is a mobile application, so adding gigabit features won’t help its target audience. But Vanwinkle laid it out really well.

“We’ll get to be the first to experience a gigabit and see what the consumer could experience,” Vanwinkle said. “There’s no question that seeing that will be to our advantage, and give us foresight into the future customer experience. But with that being said the majority of the world doesn’t have a gigabit and we have to have a good experience for them.”

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For the last year Verizon has been trying to buy the unused Advanced Wireless Services (AWS) licenses of Comcast, Time Warner Cable, Bright House and Cox Communications, giving it a treasure trove of new airwaves for its future LTE expansion. But those companies aren’t just swapping cash for spectrum. They also revealed so-called joint-marketing agreements, essentially deals to resell each other’s wireline and wireless services.

The Justice Department is imposing a five-year limit on those joint-marketing agreements, after which they’re presumably subject to additional antitrust review. The other condition isn’t much of a condition at all: Verizon has agreed to not to resell cable’s residential services in areas where it offers its FiOS fiber-to-the-home network, which Verizon was never planning to do in the first place. While it’s getting killed by cable in territories where it only has pokey DSL, Verizon can compete head-to-head with cable in its FiOS markets.

Surprisingly, spectrum concessions seemed to be the deciding factor for the DOJ. Antitrust lawyers said that Verizon’s agreement to sell T-Mobile a portion of its AWS haul was a key factor. Here’s the statement from Acting Assistant Attorney General Joseph Wayland, who heads up the DOJ’s Antitrust Division:

“By limiting the scope and duration of the commercial agreements among Verizon and the cable companies while at the same time allowing Verizon and T-Mobile to proceed with their spectrum acquisitions, the department has provided the right remedy for competition and consumers. … The Antitrust Division’s enforcement action ensures that robust competition between Verizon and the cable companies continues now and in the future as technological change alters the telecommunications landscape.”

Update: Now the ball goes to the FCC, and it looks ready to approve the deal as well. Thursday morning FCC chairman Julius Genachowski said he would begin circulating a draft order recommending the transaction be approved. We could see a final decision in the coming weeks.

FCC Chairman Julius Genachowski

The commission — which has regulatory authority over the spectrum part of the deal, but not the joint-marketing agreements – is demanding concessions on data roaming, which Verizon has agreed to meet in an FCC filing. Verizon said it would sell access to its LTE network at “reasonable rates” to roaming partners. That should put rural carriers worried about being shut out of Big Red’s 4G network partially at ease, though I’m sure they would have much rather Verizon spelled out specific rates.

The FCC also won a concession that really wasn’t much of a concession. Verizon has agreed to begin deploying LTE on those AWS frequencies within three years and to reach 70 percent coverage in seven years. Considering that those airwaves have already sat idle for six years and that Verizon has claimed it desperately needs more spectrum to meet mobile broadband demand, Big Red doesn’t seem to be in that big of hurry.

Here’s an excerpt form Genachowski’s statement:

“Specifically, Verizon Wireless has undertaken an unprecedented divestiture of spectrum to one of its competitors, T-Mobile, and has committed to accelerate the build-out of its new spectrum and enhance its roaming obligations. In addition, the companies’ commercial agreements will be modified to, among other things, preserve Verizon’s incentives to build out FiOS, increase wireless competition, and ensure that the proposed IP venture is pro-consumer and that its products cannot be used in anti-competitive ways.

“Approval of the substantially modified transaction will promote the public interest and benefit consumers in several ways. By advancing U.S. leadership in 4G LTE deployment, the transaction marks another step in our effort to promote the U.S. innovation economy and make state-of-the-art broadband available to more people in more places. The transaction will preserve incentives for deployment and spur innovation while guarding against anti-competitive conduct. And vitally, it will put approximately 20 megahertz of prime spectrum—spectrum that has gone unused for too long—quickly to work across the country, benefiting consumers and the
marketplace.”

Image courtesy of Flickr user turtlemom4bacon.

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To be clear, community ownership and local government ownership do not have to be one and the same. But using Google Fiber’s planned gigabit fiber-to-the-home network in Kansas City as an example, corporate ownership of a network means community interests may not always win out.

Connecting for Good, a Kansas City local nonprofit, and the Rosedale Development Association teamed up to propose the idea of a Wi-Fi co-op that would tap into Google Fiber to provide Internet connectivity for Rosedale, a low-income community. Rosedale has no library or central community center that might otherwise act as a broadband hub.

The issue isn’t about the merits of the co-op since it’s actually just a concept for now. It’s not about the fact that Google pretty much slammed the door on the idea before the group could even develop a specific proposal (that’s a separate discussion). What’s really at issue here is that if communities are not holding the driving wheel and they don’t own or at least rent the vehicle, they are ultimately a passenger in someone else’s ride. At some point, the needs of the network owner could trump the needs of the community.

Communities that do not have the financial resources, legal latitude or political will for local government or the public utility to own the network must rely on alternative sources to fund and/or run the network. With those alternatives come trade offs – how much control does a community have over the business of using broadband to transform communities versus how much control the entity has that brings cash, management and maybe ownership of the infrastructure.

Blair Levin, National Broadband Plan architect and driving force behind Gig.U, responding via Twitter to an article about control versus capital states “there is definitely a tension that happens between communities and partners that needs to be addressed.” John Brown, CEO of CityLink Telecommunications told Gigabit Nation this week that communities have to do a great job crafting the deals they strike with private sector companies if broadband is to deliver the benefits communities expect.

Fort Wayne, Ind. entered into a public private partnership with Verizon to bring fiber connectivity to residents. However, Verizon sold its FIOS assets to Frontier.  Frontier promptly raised rates 46 percent on subscribers’ TV services and introduced $500 installation charges, effectively neutering fiber’s progress there. Gary Evans, CEO of Hiawatha Broadband Communications, which partners with several municipal governments, believes that strong legal contracts can protect communities in this kind of scenario.

Private companies provide only some of the challenges. Recently, President Barack Obama issued an Executive Order directing relevant agencies to lay conduit in the ground anytime transportation or other public works programs result in digging up the ground. It further directs agencies to work with state governments to help them streamline right of way and other rules to support his “Dig Once” mandate. An automatic win for cities and counties? No.

Communities have to own this process as well, actively inserting themselves into negotiations, rule-making and program implementations. Otherwise, the Feds and the statehouse can create procedures beneficial to them, but not so much for local communities. For example, Brown says, “Mayors should take the lead in putting rules in place that mandate public works projects be publicized and all interested parties be given 90 days to respond with their intent to lay conduit and fiber with open access clearly a requirement.”

The bottom line is, every community that accepts money, materials and support from within or outside of the community need to deal upfront with the tradeoffs between capital and control of the process – the business of broadband. Understand that acceptance has a price. Manage that cost, your constituents’ expectations and your broadband plans accordingly.

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Verizon will also add a 75/35 tier with download speeds of 75 MBps and upload speeds of 35 Mbps. On the upload side, the 300 Mbps package will feature 65 Mbps upload speeds. Verizon hasn’t yet disclosed the cost for these speeds, but all excepting the 300 Mbps service can also be bundled with Verizon’s pay TV and voice services. And because there’s no data cap on Verizon, you can blow out your modem with your usage and not get cut off or charged more for a bucket of 50 more gigabytes per month.

Verizon clearly understands how people are using the Internet to consume more of their entertainment and do most of their communications. It also understands the impact of more devices in the home. For example it recommends its new 75/35 Mbps for a household that “streams HD movies to the TV, downloads or uploads video files, participates in multiplayer gaming, and has three or more Internet-connected users on multiple devices.”

The higher 150/65 and 300/65 Mbps speed tiers are aimed at larger families with 5 or more people doing streaming, gaming, etc. things on a variety of devices. And thanks to new routers coming out that will support gigabit Wi-Fi, the networks inside our homes will be able to pass along the faster network experience throughout the home.

Verizon offers the following comparisons of the top speeds:

With a 300 Mbps speed, consumers can download a two-hour, standard-definition movie (1.5 gigabytes) in less than 40 seconds; and a two-hour, high-definition movie (5 GB) in 2.2 minutes. On a 150 Mbps connection, the same two-hour, SD movie can be downloaded in less than 80 seconds, and the two-hour, HD movie in less than four-and-a-half minutes.

And most important are the things we don’t even know that we want to download. Fast, low-latency fiber-to-the-home connections offer the possibility of medical care in the home, video presence in HD, or maybe even your own personal holodeck. As efforts to build gigabit networks expand around the country, we’re going to see new applications. Verizon at least is letting its customers get a taste of what those might be. With faster speeds and without a data cap to keep them in check.

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