Jul 312008
 

Really interesting article from Tim Lee of Ars Technica about customer owned residential fiber. Yes you read that right — a pilot program in Ottawa ran fiber to 400 homes, and the residents own the last mile. Sure gives Fiber to the Home (FTTH) a whole new meaning:

http://arstechnica.com/articles/culture/customer-owned-fiber.ars

While this could insert a fascinating wild card into the broadband access/net neutrality debate here in the States, Lee is realistic about the challenges and the time frame:

It’s a tantalizing prospect, but a lot of practical difficulties will have to be overcome to make it a reality. Incumbent telecom firms may not like the prospect of increased competition, and they’ve never been shy about using regulatory barriers to strangle potential competitors in red tape. Meanwhile, promoters of the concept face a kind of chicken-and-egg problem: a customer-owned fiber strand is only useful if there is robust competition among ISPs at the other end, but companies aren’t going to enter the residential ISP market until there’s a critical mass of customer-owned fiber.

Most importantly, it’s not yet clear how the economics will work. The Ottawa trial suggests that a fiber connection can cost less than $3000 per household, but the exact cost depends heavily on site geography and the rate of customer uptake. It will take several years for the concept to prove itself. And, if it does, it will take a number of additional years for it to be widely adopted.

Right now there is a battle going for these kinds of affluent residential customers, but only in specific zip codes. Back in March I wrote about an interesting Yankee Group report that highlighted telcos and cable companies battling fiercely to offer triple play services in the most lucrative urban neighborhoods. If an appreciable number of such homes started owning their own fiber connections, and if that fiber reached to a peering point serviced by multiple ISPs, choice could be greatly increased and the cost of service greatly decreased.

http://cparente.wordpress.com/2008/03/06/iptv-turning-gorillas-into-guerrillas/

Two huge ifs of course, and nothing will happen soon. And choice for those who can afford the estimated $3,000 cost doesn’t do anything for those who don’t have broadband access for economic reasons. But consumer ownership of the last mile at some point could be part of a more comprehensive policy discussion that acknowledges both the essential nature of broadband access and the cost involved in providing it.

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