Adding Fiber to Your Computer Diet?

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The first mumblings about second-generation broadband are beginning.

Verizon, SBC and Bell South are running fiber-to-the-premises pilot products and are/planning to shortly roll out services to (pretty) limited areas with a year.

Verizon has posted some details about its fiber project, which they call FIOS. Read Verizon’s FAQ here, along with pricing information. There’s also an unofficial website which is tracking deployment (though places where something is actually going on are few and far between).

Fiber isn’t the only option. There’s an upgraded ADSL being tried in Missouri, while cable providers say they can up speeds, too, while others promise technology which would put existing cable systems on steroids (maybe).

If you want to keep track of such things, you could do worse than bookmarking this page, and doing a search every once in a while.

If you look at some of the threads attached to some of the news items at DSL Reports, you will notice considerable . . . skepticism about many of these plans.

There’s basically two pretty good reasons for that.

Battle of Regulators and Regulated

The players in this game tend to be treated as utilities by the various U.S. and local government authorities. In general, phone-based broadband tends to be regulated more, cable broadband less.

This brings up all sorts of regulatory issues, from whether or not major providers have to let little guys piggie-back on their investments to how much can be charged. At least in the United States, it’s not just a matter of what the Federal government or states say, localities pay this game fully, too, and sometimes their demands turn into legal (or not-so-legal) extortion.

This can cause all sorts of delays. A big reason why cable got a big jump on DSL was because the DSL providers were fighting all kinds of regulatory wars (and also had more profitable business services they would lose with cheap DSL, a problem the cable companies did not have).

It’s not that the providers are exactly the Virgin Mary, either; they often try to get governments to foot the bill on any investment they have to make, and they certainly know what political lobbying and contributions are.

If We Build It, Will They Come?

The question that must be asked and answered about these services is, “Why do people need this?”

In theory, the answer is simple “People will be willing to pay more to get video on demand.”

In reality, the answer is just as simple, “People are willing to pay more to get free video (and music, and porn, etc. etc. . . . )”

No, I’m not saying that everyone with a broadband connection is a thief (though if you looked at total bandwidth used overall and for what, the takers are very well-represented). Anyone who spends a considerable amount of time on the Internet can justify the additional cost of a broadband connection just from the time saved over using a dial-up.

However, you don’t need 15 or 30MBps to download webpages or email. On the whole, those using the Internet legitimately would probably prefer a lower bill than more speed.

So who is going to want this? How many people are going to want to pay more so they don’t have to go to Blockbuster? How much more?

It’s hard to see how faster broadband speeds won’t pour gasoline on the current P2P fire.

Let’s assume for a moment that in the near future, technology combined with legislation figure out how to stop P2Ping and the like dead in its tracks.

What will that do to demand for faster connections? Seems to me in the short-to-medium term, it would stop faster broadband in its tracks, too. Not forever, but it probably would set things back five years or more until there really is a widespread market for pay video-on-demand (and prices get low enough to compete against the video stores).

That’s really bad news if you just laid out billions of dollars to lay down fiber that isn’t used. Come to think of it, billions were spent just a few years ago to lay out all that “dark fiber” out there built in anticipation of demand that never showed up.

The Future

This is not going to be smooth; this is not going to be easy. Those who have to build it not only have to contend with the “normal” problems associated with a new service (which are harrowing enough); they also are essentially depending on illegal activity to fuel the demand for their product. It’s like car manufacturers building a new product line based on what thieves like to steal.

It’s not the best business model, and how willing would you be in invest billions of dollars on something Congress (or equivalent legislature) could devastate at any time? How willing would your shareholders be? Remember, this folks can’t be anonymous, and they’re not going to get shut down or go to jail for you.

Of course, such folks can lobby and go to court and all, but such a business is inherently uncertain and unstable.

I don’t think we’re going to see a real rollout for a long time to come, and the bottlenecks won’t be technological, but governmental.



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