Moore’s Law for Broadband or Homes With Tails?

WASHINGTON — The drive for a national broadband strategy just got a new wrinkle.

How about an entirely new question for the debate over broadband access? What if the individual subscriber were brought into the ownership equation?

Columbia University law professor Tim Wu and Google (NASDAQ: GOOG) policy analyst Derek Slater are proposing just that: a new model where each household could own its Internet connection.

Not just pay for the service, but actually own the fiber that comes to the home. The pair pitched the idea Friday at the offices of the New America Foundation, a Washington think tank.

“It’s this age-old question of how is this country going to get really big bandwidth. How are we going to get to Moore’s law in the bandwidth world?” Wu said, recalling Intel cofounder Gordon Moore’s famous maxim that chip-processing speeds would double every 18 months. “It is a daunting problem, no matter what angle you look at it from.”

The question is the latest in a spate of policy talks clustered around the singular mission of solving the riddle of universal broadband.

The ownership model they proposed is patterned after the condominium, where people own everything inside their interior walls, but all the common facilities are owned collectively and managed by an association.

The same could work with fiber lines, they argued. An individual household would own the strand of fiber that runs through the property, but the cost of repairing and maintaining the lines running alongside streets and other public areas would be shouldered by the association, which could be a neighborhood co-op, a municipality or a private enterprise.

Called “Homes With Tails,” the paper proffers a solution to the “last mile” problem — that is, bringing fiber directly to the homes of millions of subscribers provides the fastest connections, but it’s an extremely expensive proposition. Just ask Verizon, which is spending $17 billion a year to do just that with its FiOS network.

But FiOS is the exception. Most fiber-based broadband networks stop at a central station in a neighborhood, and run the rest of the way to individual homes over slower copper wires. Under the scheme Wu and Slater propose, that hub would act as an open switching station that would be accessible to multiple service providers, as the 1996 Telecommunications Act envisioned.

“At that point, the customer would be able to connect to Internet service providers and other information service providers of their own choosing,” Slater said, suggesting a solution to the competition problem that many people see in the current broadband marketplace.

“Ownership wouldn’t really amount to much if the customers were locked into only connecting to just one provider,” he added. “For ownership to mean something, it needs some autonomy, and some ability to select from a variety of different service providers.”

It is worthwhile to point out that Slater did not work on the paper or present its findings as a representative of Google. As he explained to after the event, “It was something I worked on on Sundays before football season started.”

Verizon’s Link Hoewing, the company’s assistant vice president for Internet and technology issues, offered a rebuttal to the problem of competition, noting that telecoms, wireless firms and cable companies collectively spend $65 billion a year maintaining and upgrading their networks.

“The investment that we’re putting out shows you that there is competition,” he said.

To Hoewing, the argument advanced by Wu, Slater and many other broadband advocates shortchanges the demand side of the equation.

“Just looking at the broadband providers as being the whole issue is not really fair,” he said. “There’s a lot more that we could be doing with the broadband itself.”

Advances in areas like online healthcare and e-learning would spur consumer demand for broadband, Hoewing said, reiterating the favorite demand-sider argument that many people who have access to broadband service choose not to connect to it because they either don’t see the value of the Internet or are content with dial-up or a slow DSL connection.

Until the value proposition becomes compelling, those people aren’t going to spring for broadband, let alone sink $2,000 into their own personal fiber line, he said.

Hoewing sparred with Wu and Slater over another implication of their plan. He worries that the private ownership of fiber would decouple Internet service from voice and TV, reversing the trend of bundling that has been a big hit with consumers and driven prices down.

They retorted that consumers could still access triple play services, only they would have a wider choice of providers through the open-access network hub, only with a much faster Internet connection.

But Slater and Wu admitted that they’re just batting around ideas. They don’t expect to see telecoms rush to embrace the model, nor consumers, for that matter.

Owning (or leasing) a fiber line for the final mile wouldn’t be for everyone, particularly not until demand ticks up. The early adopters would be the hobbyists, Wu said. They’d be tinkerers cut from the same cloth as Steve Jobs, Steve Wozniak and Bill Gates. Only instead of playing with primitive, homemade computers, they’d be looking to supercharge their personal Internet connections. The “10 gigabit club,” Wu called them.

“What could a club of hobbyists — the Bill Gates or Steve Wozniaks of today — think of or do with 10 gigabits of connections,” he said. He added quickly, “I don’t know what that is,” but that it’s a different type of question than asking how you can squeeze a little more juice out of a coaxial cable. “We’re talking about a giant leap forwards.”

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