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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I asked several people in town for their reaction and thoughts on the news, and I’ve collected the responses here. Here’s what Austin businesses are saying about Google Fiber:

Luis Esteban Caffesse, co-founder of the video production shop Pitch Productions, can’t wait to watch Netflix while uploading client videos after hours:

I can tell you this — the single biggest bottleneck in my work everyday is my internet speed. It’s not my productivity, it’s not my computer’s render times. It is simply the amount of time it takes me to get video content to my clients. Having something with the kind of speed that Google Fiber offers can make the difference between hitting a deadline or not… or between getting a client a copy of their video today or tomorrow.

Internet service is the ONE service in my life that I am more than willing to pay for… but there simply isn’t anything fast enough, even if there were someone willing to take our money.

Brazos Hall in Austin where Google made its announcement.

Joshua Baer, the executive director of the Capital Factory incubator and Chief Innovation Officer at Return Path, is looking forward to the day he can stop waiting on the network to catch up to today’s hardware and software:

To geeks and creatives, having a fast internet connection is right up there with a big monitor and a nice chair. It’s one of the most important factors in job satisfaction and productivity for knowledge workers. At Capital Factory we have one of the fastest Internet connections around. It’s half as fast as Google Fiber and costs $4,000/month compared to $70/month for Google Fiber.

There are three direct benefits Austin will see from Google Fiber. One, Google Fiber will attract more talented workers and innovative entrepreneurs. Two, companies will choose to launch innovative new products in Austin where the market is most receptive and consumers have the infrastructure needed. This means more marketing dollars spent in Austin, more press and attention, and early access to technology for our residents. And finally, the next generation of technology that takes advantage of this new infrastructure will be conceived and developed in Austin.

Austin streets during SXSW 2013.

Kyle Fox, the director of the Austin Technology Incubator‘s IT and Wireless Portfolios, thought more about the bigger picture of a gigabit:

Google Fiber replaces MoPac as Austinites’ quickest route to work. We could no longer have a work commute, nor would we have to wait at the doctor’s office. This will dramatically change how we as humans interact with each other and with the core infrastructure we interact with on a daily basis.

Zach Richardson, a co-founder and CTO at the Daily Dot, an online publication based in Austin, thinks it will make his staff more productive and help recruit developers to town:

Almost everything in my life is somehow connected: workout logging with Map My Fitness, scanned physical mail delivery with Outbox, or HD streaming for TV. Right now I can’t watch TV in HD (streaming) and do some of my work at home at the same time. I had already been looking at multiplexing UVerse and TimeWarner to squeeze a little bit more bandwidth at home.

For any tech-focused business, recruiting and finding talent is one of the hardest things to do. I regularly look at ways I can squeeze every little bit of productivity out of the already existing team we have. This means eliminating non-break idle time. Fast computers and good tools are a large part it, but one of the main bottlenecks (and hardest to solve) is internet speed. It will also help with recruiting in Austin. Engineers want to live and work where they can focus on code and solving interesting problems, not waiting on the internet.

I’d say that personally and professionally these people are excited. I am too.

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Meanwhile, as we were getting our heads round the Challenge, the Empire, um, incumbent telcos struck back last week in Georgia with a an anti muni network bill that appears reasonable, but would kill hopes for a gig city in the Peach State. Windstream, AT&T and Georgia’s other incumbents are incapable of delivering gigabit services, so they have taken the easy way out and lobbied the legislature to kill cities’ ability to do so. Meanwhile, most of the gigabit networks elsewhere are run or being built by muni governments and public utilities, with just a few private companies leading gig projects.

Even the most ardent community broadband supporters, while happy the FCC’s gigabit challenge, believe the devil is in the details. Sure, quite a few fiber networks have moved past the planning stage. But it’s going to take hard work to meet the FCC challenge. Some of the hurdles are money-related. Others come from broadband policies and legislation that need to be approved, or improved, or as is the case in Georgia, flat out rejected.

The road to gigabit cities

FCC Chairman Julius Genachowski.

The panel consensus was that more effort must be made by the FCC and other policymakers to remove ALEC-type barriers to community networks (American Legislative Exchange Council). The FCC’s National Broadband Plan specifically advocates preventing states from restricting local broadband solutions, and just Friday FCC Chairman Genachowski formally voiced his opposition to this type of legislation. Communities are displaying a range of creative solutions to bringing broadband where it needs to be, and this must be encouraged, not hijacked by telcos that refuse to service areas most in need.

The panel went on to describe a need for the FCC, broadband advocates and others to understand that a lot more education needs to happen.

“We have to make sure the audience we’re trying to reach is ready for the message we’re trying to send,” states Arkansas State Senator Linda Chesterfield, a legislative champion for greater broadband deployments. “We have a youthful population here who sees the necessity of a gigabit network. Then you have the people with BlackBerries who think these are good enough to get online. Until you have an audience that is ready to accept the services you’re trying to render, efforts to convince them to support this initiative will do no good.”

Everybody partner up

Putting aside the discussion of large incumbents stifling communities’ efforts, many private sector companies collectively are also a necessary component of any drive for more gigabit cities. Yet they face barriers too. From panelist and Broadband Communities Magazine Editor Masha Zager’s perspective, “The Chairman’s goal is achievable in that there are providers who could bring this capacity to communities, but aren’t doing so today. However there is the question of whether they can do so and meet their ROI needs.”

Jim Baller, president of Baller-Herbst Law Group,notes that there are many legal issues that hold potential providers from developing gigabit networks. These include IRS’s ‘private use’ rules that discourage public-private partnerships, FCC limitations on access to universal service subsidies such as the preference for price cap carriers and FCC rules that adversely affect small providers.

Given the challenges facing both communities and private sector companies, one logical course of action is a greater pursuit of public private partnerships in which both groups are full partners in projects.

The panelists went on to describe a number of policy, logistical and financial issues that public, private and government stakeholders need to resolve if the U.S. wants to meet or surpass the FCC’s initiative. As people roll up their sleeves and prepare for some heavy lifting, it will be difficult to ignore the 800-pound gorilla in the room – politics.

“I’ve been very critical of the FCC, but I believe this is a good initiative from this particular FCC,” stated Christopher Mitchell, Director, Telecommunications as Commons Initiative at the Institute for Local Self-Reliance. “You have to recognize the power of the carriers in Washington. If the FCC had come out with a truly bold initiative that would have knocked us all backwards, it would have incited the carriers to give a whole bunch of money to Congress, who would have been on the FCC and probably taken away the FCC’s authority. We have to recognize that we must change more things if we’re going to have an FCC that will take the actions we would like to see it take.”

As much as some people prefer to avoid the hurly burly of the state and national capitals, it is almost inevitable that every broadband project will become political, for better or for worse. Therefore it is best to be prepared for that which we cannot avoid.

Craig Settles is a consultant who helps organizations develop broadband strategies, host of radio talk show Gigabit Nation and a broadband industry analyst. Follow him on Twitter (@cjsettles) or via his blog.

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Residents and business in a roughly 12-block area will get the possibility of gigabit networks and prices for the service will start at $99 for a 50 Mbps connection. Those wanting more can contact GRU for personalized pricing plans. The university will offer labs and students faster connections on campus, but that gigabit connection isn’t going to be in most people’s price range. However, for a limited area the infrastructure will be there for when the costs of a gig drop.

And that is the promise of building out these networks. Despite the small area, letting colleges get on superfast networks without worrying about capacity constraints mean that the next Facebook or Skype could come out of a GigU supported dorm room. So yes, while the current connectivity is limited in availability and pricey, it also could prime the pump for new businesses and the next generation demand for broadband.

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Mark Ansboury, the president of Gigabit Squared, chatted with me on Wednesday morning about the company and its plans to lower the cost of deploying and operating a broadband network. His goal is to bring gigabit speeds to as many places as possible, and along the way he may join firms like Google, Sonic.Net, Allied Fiber and several municipalities in changing the way broadband is deployed and operated in the U.S.

Bypassing red tape keeps projects in the black

For the Gig.U project, Ansboury is offering to spend up to $200 million helping build broadband in six selected communities. The money comes from a combination of vendor financing provided by companies such as Alcatel-Lucent, Ericsson, Corning and others who are working with Gigabit Squared as well as Chicago investment bank Stern Brothers. Communities that apply are expected to contribute too, but instead of cash they will have to make commitments that will lower the cost and headache of deployment.

Communities should work to offer easy-access utility poles, making right-of-way access discussions fast and painless, and may even commit to becoming primary customers for broadband or helping Gigabit Squared sign up new customers. Google has said the municipality’s willingness to help lower its deployment costs as well as smooth the political process was one of the reasons Kansas City, Kan., was chosen as the place where it would deploy fiber.

So in that way, Gigabit Squared is taking a page from the search giant. However, it also plans to work with cities to develop programs that will take advantage of the network, which is something Chattanooga, the nation’s first gigabit network, is trying to do. Creating programs that use the network will help drive residents to use it and engender support among different members of the community, from teachers to public safety officials.

Ansboury is even happy to bring on local ISPs if they want to come to the table to help build networks, although he does expect the first six projects done with Gig.U will be owned and operated by Gigabit Squared. But he’s not averse to a municipality or other network provider taking over, he said. “We think of ourselves like a developer. We have a road map we’ve created to help deploy these networks. We lay out a path for communities to follow,” Ansboury said.

Can this new model work?

Currently Gigabit Squared employees have experience consulting on gigabit networks, but the company doesn’t operate one. For example, Ansboury was the former SVP and Chief Technology Officer of One Community, which helped build high-speed broadband networks in Ohio. Other executives at the company have a variety of roles in infrastructure development and finance, but not everyone has broadband experience, according to their bios.

Ansboury says the company is involved in some broadband stimulus grant efforts and may even make some investments in those networks, providing the private equity for those public-private partnerships. Like someone who has somehow managed to discover an entirely new way to lose weight, he seems excited to bring his models and theories to smaller cities around the country and put them to the test. Unlike Google or even Sonic.net, an ISP in California that’s deploying fiber on top of its existing DSL network, Ansboury is going big and getting there fast.

But, its unclear how much a city can promise under a model like this (or how much it will matter in the end for Gigabit’s Squared’s ROI). Google’s fiber project hit some delays while the city’s utility and Google came to terms on how and where Google would string its fiber on the poles. There is also always the possibility of messy citizen battles over ugly equipment or rights-of-way the city can’t really ignore. For example, residents in San Francisco have sued to stop the placement of AT&T’s fiber-to-the-curb termination cabinets.

An open network means anyone can access that gig

Ansboury says city involvement is just one element of cutting costs, although he declined to get into the specifics of the cost per home passed or the details of how GB2 would build its networks. He did say there are several elements that will enable Gigabit Squared to not only deploy a network for less but also sign customers and achieve a penetration rate that offers a return on Gigabit Squared’s investment. Part of that return might come from Gigabit Squared’s commitment to running “open” networks, by which Ansboury means he will resell capacity on the network to others.

“We realize that if we want to get high take rates and be hyperlocal, we have to think differently and part of that means you have to change that paradigm,” Ansboury said. “You have to be a triple-play provider with broadband video and voice but that’s not only it. With the emergence of over the top services and big bandwidth sucking applications we are creating an open access strategy that allows for a town to have a something like a digital economic development service model.”

He used the example of Netflix coming in and buying capacity to deliver its service to customers directly and confirmed that other ISPs could buy capacity on its fiber. The model looks like a last-mile network that might be as innovative as what Allied Fiber is trying to do nationally for the middle mile. Ansboury expects we will see the first network in the early part of next year as part of the Gig.U program. The Gig.U project communities have two application windows; one closes in July and the other in November, so interested communities should check it out.

As for why this effort matters, Blair Levin, the executive director of the Gig.U project, summed it up nicely in a chat with me on Wednesday. “The problem isn’t that we don’t have a gigabit everywhere. The problem is we don’t have it anywhere,” he said. “And if we need it, we’ll need it in university towns first so let’s get on with it. It’s too late when we discover we need it everywhere because then we are pure consumers of what everyone else [namely places with existing gigabit networks like the Netherlands, Hong Kong or North Korea] else is producing.”

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In Chattanooga, Tenn. the creation of a gigabit network has led to the formation of an incubator that wants to attract startups to the city this summer to play around with the nation’s first gigabit network. I spoke with Jack Studer, the managing partner at Lamp Post Group, which is the incubator hosting the contest, on what kinds of applications might drive people to get a gig.

Studer explained that while consumer applications were fun, the lack of other gigabit networks around the country made it a bit difficult to justify building a startup or business that needs a gigabit connection. Even if Studer has the bandwidth to receive a massively fat 3-D holographic image of me for a video conference, I couldn’t reciprocate on my 60 Mbps cable connection (that really delivers 30 Mbps) so building a consumer 3-D holographic web conferencing business is probably a long shot. Other similarly bandwidth-intensive ideas are also out … for now.

“Startups that require a gig — well, that business plan would suck. It’s like building up a business based on teleportation. It doesn’t exist yet,” said Studer.

Where the gigabit network really shines is business productivity says Studer. He points out that he can do things between his offices in Chattanooga that are truly business-changing such as real-time and continual data backups and replication. And that’s just the beginning. Studer has ideas around connecting distributed compute nodes around the city that could essentially turn Chattanooga into a giant supercomputer.

Gigabit speed, and the fact that no applications today require such speeds, mean a variety of services that now run on the computer might run in the network instead without it affecting the end-user. That has implications for data processing and the creation of new services based on an intelligent network. Such services might even become necessary as we connect more devices to the network.

For example, if we have a smart home where our computers, CE devices and even our lighting or appliances are connected to the network, we have to think about securing all of those endpoints. The current model of having antivirus software sitting on a PC no longer makes sense, but what about putting it on the network? A fast network means one could run services such as antivirus on the network without the user noticing.

But to bring the future to life, Studer needs students, venture capitalists and entrepreneurs to come to Chattanooga to play around with the network. Who’s up for the challenge?

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Kevin Lo, Head of Google’s fiber access program speaking at the Broadband World Forum in Paris was pretty candid when he said:

“If you put a gigabit in people’s homes they will be inspired to find new ways to use it. We have no idea why you need a gigabit today, but when we all had dial up you could not possibly imagine watching video over them. It’s not about doing email faster, it’s about doing those new things that you don’t do today.”

Lo singled out HD video conferencing and telemedicine but those are relatively obvious uses. We have discussed this question in the past and will surely be talking more about this topic going forward.

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Brent Miles of WEDC

Want to improve the economy? Then demand better broadband. The National Broadband Plan attempts to create a path from broadband policies to economic recovery. Policymakers at all levels of government, though, need to watch municipal efforts such as those in Kansas City, Kan. because it’s at the local level where economic recovery has a fighting chance to ripple out through counties and then states.

Google has said one of its main goals with its gigabit network giveaway is to create a test bed for all kinds of wonderful technology apps, but independent of Google’s intent, expect the municipally owned Kansas City network to also act as a test bed for showing how broadband can jumpstart local economic development. From the outset, Kansas City’s government, civic leaders and stakeholders pursued this deal from the perspective of “What can you do with a gigabit?” to affect various business and personal economic outcomes.

The Wyandotte Economic Development Council has brought some big economic development projects to Kansas City, which sits within Wyandotte County, including Sara Lee, GM and Sealy Mattress. WEDC President, Brent Miles, and members of his team were key influencers in the Google courtship dance. According to Miles, who addressed the network’s future recently at Broadband Community Magazine’s Broadband Summit (scroll down to “A Tale of Two Cities”) in Dallas, they have settled on three primary economic goals for the network:

1. Recruit the types of businesses we’ve never landed before;
2. Increase the retention and expansion of existing businesses; and
3. Significantly improve the socioeconomic standing of individual constituents.

These broadband goals reflect a similar thinking among economic development professionals in a 2010 national survey conducted in cooperation with the International Economic Development Council (IEDC). Survey respondents were asked to gauge broadband’s potential impact on a variety of economic outcomes. Fifty-five percent and 42 percent respectively say fiber “definitely impacts” business recruiting and business retention, while 31 percent and 22 percent believe fiber networks do the same for worker training and individuals’ ability to earn income.

The high profile of Kansas City’s network should help clarify several issues related to broadband and economic impact, particularly the role of broadband in urban communities. In D.C. policy circles, the conventional wisdom appears to be that price and low-income constituents’ failure to understand broadband’s benefits are the main barriers to adoption. Reading between the lines of broadband stimulus rules could lead one to believe the urban poor have plenty of options, and adoption campaigns (and computers) will win over the holdouts. However, the problem is deeper than that.

Kansas City is a distinctly urban, albeit mid-size city of around 150,000 people. “But we had been asking providers for a decade to bring service to our unserved communities with no luck,” states Miles. “I gather that, because of the poverty rates, low median income and high unemployment in these communities, incumbents have no incentive to serve them.” Recent research adds to the speculation.

Earlier this year, a study from American University in D.C. reported that the 25 poorest zip codes in the Washington, D.C. region spend about three times more for faster megabit per second connections than the 25 richest zip codes for similar Internet access speeds. Bandwidth.com released a report that showed seven of the bottom 10 U.S. cities in terms of broadband speeds received relative to average monthly subscription fees are urban centers with populations greater than Kansas City.

Harvard law professor and author Ychai Benkler summed the situation up last month at the National Conference on Media Reform: “You sell people crappy service for a lot of money, they won’t want it.” The Center for Social Inclusion’s (CSI) report, The Promise and Challenge of Community Broadband Models, concludes that without competition in urban areas such as what Kansas City’s network now represents, low-income communities will remain unserved.

Clearly network speed and quality heavily influence local communities’ ability to use broadband to recruit businesses, and the federal government must address this issue if it really wants broadband to be an economic engine for urban or rural areas. Global commercial real estate services firm Colliers International recently surveyed corporate real estate directors and senior portfolio managers to determine the importance Corporate America places on factors that can influence where businesses locate. On a scale from 1 to 10, fiber optics rated 9 or 10 across most industries surveyed.

“There are multiple factors in the decision to pick a site to re-locate or expand,” observes Miles. “Every industry is different. We’ve been asking businesses, ‘how much weight does a gigabit network carry?’ We know it’s a factor though we haven’t quantified how much. We’re still synthesizing data and plan to create metrics.” However, Miles’ team has reviewed enough evidence to feel confident that the network will make a difference attracting businesses, and that a gigabit (at least) is the benchmark for any community serious about this pursuit.

Broadband’s impact on existing local businesses is equally important. Miles states, “From the beginning, we’ve asked them, ‘what would you do with a gig?’ This is an on-going exercise, of course, and as the network is deployed businesses will find uses we didn’t expect.” For example, with smart grid, they can more effectively control how they use utilities and reduce operating costs. Kansas City’s large medical center will run applications no one else has, and subsequently be able to get more grants, hire more surgeons and so forth.

The power of individual transformation perhaps will be the network’s greatest impact. Miles says:

“When we recruit a manufacturing plant, we have to hope residents get a job. We don’t have direct influence on them getting those jobs. At end of day, businesses have to make that decision whom to hire. But when we can deliver a gigabit to someone’s home, we offer a technology that gives individuals unlimited potential to make something of themselves, and this affects what kind of community you create. Residents can get a better job and more easily afford to pay for their homes. New home-based and other entrepreneurial ventures can generate enough taxes to fix streets where they live.”

Finally, Kansas City offers a strong lesson in unconventional thinking. Google’s investment here, as well as Corning’s similar three-county investment in rural New York state, represent a new type of broadband public private partnership in which non-ISP businesses with shared economic interests can align with visionary local communities. This could be the next big step forward in local economic development.

Craig Settles is a broadband industry analyst, co-director of Communities United for Broadband and was named one of Huffington Post’s 16 Tech Titans on Twitter (@cjsettles).

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