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Fiber for Everyone!

In an ambitious attempt to blanket the region with broadband, the city of Los Angeles has decided to solicit bids for a project that would extend fiber "to every residence, every business, and every government entity within the city limits."

Steve Reneker, the general manager for the Los Angeles Information Technology Agency, told Ars Technica that the City Council voted unanimously to draft a request for proposals (RFP). He also said the Council would meet again in a few weeks to vote on the readiness of its proposal for distribution.

Existing service providers in Los Angeles -- including AT&T Inc. (NYSE: T), Time Warner Cable Inc. (NYSE: TWC), and Verizon Communications Inc. (NYSE: VZ) -- are likely contenders for the new broadband project. However, some of the requirements in the RFP may keep bidders at bay. The City Council has already determined that any vendor winning the bid must be willing to shoulder the full cost of network deployment, which the Council estimates at running between $3 billion and $5 billion. The service provider must also deliver free Internet access to residents at downstream speeds of 2 Mbit/s to 5 Mbit/s, with higher-speed tiers up to 1 Gbit/s available for a fee.

The Council also wants its broadband partner to provide public WiFi hotspots and, ideally, cellular and datacenter hosting services. The latter two services are not required, but the Council will favor vendors that can bring those capabilities to the table.

There's been a rise in the popularity of municipal broadband ventures of late. North Carolina released an RFP for its North Carolina Next Generation Network project in February, and Seattle is preparing to launch its own gigabit-speed broadband service in early 2014.

Several years ago, when US cities were on an earlier broadband and wireless tear, many municipal Internet endeavors ended in disaster. However, the results of those efforts should offer guidance for cities attempting to deploy networks and new Internet services today. (See Imbroglio by the Bay.)

Incumbent Internet service providers, meanwhile, consider the municipal broadband trend with a degree of wariness. In the case of Seattle, a company called Gigabit Squared has been hired to manage the city's fiber network in its first phase. Comcast Corp. (Nasdaq: CMCSA, CMCSK) would rather not face new competition, and reportedly gave money to the current mayor's opponent recently in an alleged attempt to derail the project. Comcast denies the campaign donations were in any way linked to the city's broadband plans, but many believe otherwise.

On the other hand, incumbents are also working to get involved in municipal deployments in some cases. Time Warner Cable, for example, has been very public about its bid to participate in the NCNGN project. (See TWC Bids on NC's Next-Gen Network.)

Light Reading did not hear back in time for this story from service providers in the Los Angeles region on whether they are interested in bidding for the LA business. However, a spokesperson from Cox Communications Inc. said that while LA is out of franchise for his company, Cox is "interested in working with municipalities in our areas to help them achieve their goals."

— Mari Silbey, special to Light Reading Cable

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Phil_Britt 11/13/2013 | 12:13:53 PM
Government...not As others have pointed out, having government involved just doesn't make sense. Government is at a loss when it comes to tech, even when trying to serve the public good. Just look at all of the failed muni wifi projects. While they sounded good to start with, if there isn't enough interest from business, the tech project will fail.

 

That's not to say some government involvement might not be helpful, but only if it's a public-private partnership. Government can help clear some of the red tape, but the technology should be left to the technologists to build and the users to choose what is best for their needs.
Duh! 11/10/2013 | 8:20:16 PM
Re: Rinse and repeat Seven,

Hope you're feeling better.

This was more than 5 years ago.  ADSL, 3M/750K, upgraded from 1.5M/750K at some point. DSL modem connected to a D-Link AP/router with 10baseT.  SSL-VPN, of course.   No Skype or Webex.  Performance complaints were about synching Outlook with Exchange, mapped network drives and graphics-heavy websites.  Not intolerable, just slow enough to be really objectionable.  Same laptop had acceptable performance in the office, and when we moved into the new house with FiOS. 

I think we can agree that office applications are usually more elastic than entertainment video.  And that "DSL-class" broadband is better than nothing.
brookseven 11/9/2013 | 1:40:07 AM
Re: Rinse and repeat Duh,

I was in the hospital for a week running the NOC of the SaaS vendor I was operating things over the hospital WiFi.  So, in my experience if you are set up properly then a moderate speed connection is not an issue.  I am wondering if there was something else going on for you.  Webex was fine as was skype for both calls and presentations.

So, actually I stand by what I said.  A properly organized enterprise and a moderate speed Internet connection is the need...desire different...but need for sure.

 

seven

 
Duh! 11/8/2013 | 9:26:19 PM
Re: Rinse and repeat Seven, re: your 10:17:06 EST post...

You might want to think in terms of unserved, underserved and served areas.  Served areas (multiple providers, >20 Mbit/s downstream) have gotten their economic boost already.  Underserved areas probably would get some, and unserved areas perhaps quite a bit. This of course depends on geography, demographics, local economy, etc.

I assume that by "DSL-like",  you mean equivalent to ADSL/ADSL+, sub-5Mbit/s down, including the dreaded loop qual?   If so, I'm going to quibble over your assertion that residential (less entertainment) and small business users are uniformly ok at the "DSL-like" level.    You seem to have posited two segments for business: big and small.  I think it's a lot more granular than that... "DSL-like" may be fine for small retail businesses, legal/accounting practices, incidental office work, and the like.  But DSL-like is frustrating as heck for design and engineering firms, medical practices, real estate, photography, light manufacturing, commodity ag, etc.,  From personal experience working virtual with DSL was pretty pathetic 5 years ago. With heavy dependence on Webex, Skype, etc., plus ever-busier Powerpoints, and websites, it must be really awful now. 

Bringing high speed broadband to unserved or underserved Podunk is not going to bring the whole community into some kind of broadband nirvana.  Podunk needs high speed broadband because a lot of well-to-do folks won't (or can't because they work virtual) consider moving into or staying in an unserved community - even for a second home -, so aren't going to be paying property taxes and patronizing local businesses.  If Podunk has any kind of tourism potential, tourists won't go there.  If Podunk's economy depends on commodity farming, lack of high speed broadband is going to hold them back.  Those small businesses that really can't make do with DSL or dial-up are severely disadvantaged.  Etc.  So I'd say that it's not so much that bringing high speed broadband to Podunk will be some kind of a magic economic boost, but rather that it will remove a big millstone from their necks.
Duh! 11/8/2013 | 8:32:06 PM
Wishful thinking? Let's see... they want the winning vendor to carry $3 to $5B in CAPEX.  They want them to provide what amounts to a pretty capable service for free.  They want them to overbuild Cable and U-Verse or FiOS, all of which offer very capable services.  They want WiFi.  Haven't read the RFP, but expect that if the vendors were getting significant financing or regulatory concessions in return, Mari would have mentioned them.

Um, folks... put yourselves in the shoes of an AT&T, a Verizon, or an MSO.  Does this pass the giggle test?  Noting that none of these fine companies are presently building out new residential FTTP except in response to exceptional competitive (Austin) or regulatory (Fire Island) pressure.  And noting also that according to te FCC Broadband map, most of the LA area is served by at least two incumbents.  And that all of them have high priority capital programs that aren't FTTH overbuilds.  Care to take a SWAG on take rate for the not-free service?  A back-of-the-envelope on months to positive cash flow?

Somehow, nice idea, but I don't think so. 
mendyk 11/8/2013 | 4:45:38 PM
Re: Rinse and repeat I would expect gains to be much greater for private-sector investment in enabling technologies. To reinforce someone else's earlier point, targeted spending by people who know what they are doing is more effective than generic initiatives.
sineira 11/8/2013 | 4:24:10 PM
Re: Rinse and repeat As I understand it the 1% gain is on top of normal GDP increase.
Given that the US is at about 2% GDP increase on average that would be a 50% increase just from broadband. Not exactly insignificant.
mendyk 11/8/2013 | 3:52:50 PM
Re: Rinse and repeat Do these numbers look impressive? Regarding the 500K "jobs," the examples cited are the usual temporary positions associated with infrastructure projects (i.e., once all the ditches are dug, there's no further need for ditch-diggers). Regarding the Commerce Department stats, they are from an era in which broadband was relatively new -- those apples probably don't apply now that we've moved on to oranges. And a 10% increase in broadband "penetration" resulting in a 1% or so gain in GDP? That doesn't sound too much different than an expected growth rate with or without broadband.
victorblake 11/8/2013 | 3:26:51 PM
Re: Great. Let's have govnerment running networks Beyond just running them, why are they "selecting" one provider ? Politics will somehow be put aside for this magical moment ? I think not.


Aside from stating that they shouldn't be running networks, I was trying to say that they ought not to be selecting technologies either. If they REALLY want to lower the cost of and increase the ubiquity of broadband they need to do what I said -- which is to lower the cost of building, deploying, and operating networks by reduce the cost of construction which is the #1 cost for broadband service providers above all other costs.


Why don't we see annoucement that address these issues like "Los Angeles to remove permitting fees for broadband service providers for the next 3 years in an effort to encourage broadband deployments." or "Los Angles to provide free ROW in conduits in parallel with all new road construction." "Los Angeles and State of California to waive all road and highway crossing fees ..."

That's what's needed.
sineira 11/8/2013 | 3:00:42 PM
Re: Rinse and repeat Here are some:

• ITIF Estimates A $10 Billion Investment In Broadband Would Produce Nearly 500,000 New Jobs. "These investments will create new jobs up and down the economic food chain, said Robert Atkinson, president of the Information Technology and Innovation Foundation. Those include the construction workers and telecommunications technicians who must dig up streets, lay down fiber-optic lines and install wireless towers, as well as the engineers and factory workers at companies that make the fiber, electronics and computer equipment needed to build the networks. Much of that equipment is made overseas now, but Atkinson's projections exclude jobs that would go abroad." Source: Joelle Tessler, "Broadband Funding In Stimulus Plan Sparks Debate," The Associated Press, 2/6/09)

An increase in the broadband penetration rate by 10 percentage points raises annual growth in per-capita GDP by 0.9 to 1.5 percentage points. Source: Broadband Infrastructure and Economic Growth, 2009. Nina Czernich Oliver Falck, Tobias Kretschmer and Ludger Woessmann

According to the U.S. Department of Commerce, between 1998 – 2002 communities that gained access to broadband service experienced an employment growth increase of 1% to 1.4%, a business establishment increase of 0.5% to 1.2%, and a rental value increase of 6%

U.S. Investment In Broadband And Related Information Technology Has Driven 1/3 Or More Of The Productivity Growth Of This Decade.The Ongoing Productivity Impact On GDP Growth Could Exceed $200 Billion Annually. USTelecom Analysis
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