
Bigger than Google Fiber: LA plans citywide gigabit for homes and businesses - shawndumas
http://arstechnica.com/business/2013/11/bigger-than-google-fiber-la-plans-citywide-gigabit-for-homes-and-businesses/
======
ChuckMcM
This will be fun to watch.

I've had this discussion a couple of times with various city council members
and candidates in Sunnyvale. Network _connectivity_ should be a community
infrastructure, just like roads. The argument I attempted to establish was
that "network" was a thing that connected our community, "roads" connect our
community. If you can establish that the city puts in the network to every
business and home, they can have them all terminate at a city connectivity
building (or buildings) and all of the vendors can offer services there, from
Comcast to AT&T to Sonic to NetFlix. You pay "network taxes" as a citizen and
as a provider which cover the maintenance of the system. Just like taxes cover
the cost of roads.

The downside of course is that it makes it easier for the City to tap into
your network connection. And perhaps connect commerce tax revenue with
transactions originating out of your network port. Sophisticated users would
use VPNs or what not to disguise that of course. But it would put all of the
vendors on a level playing field.

[1] [http://www.timesfreepress.com/news/2008/apr/22/comcast-
sues-...](http://www.timesfreepress.com/news/2008/apr/22/comcast-sues-epb-
chattanooga/)

[2] [http://www.annarbor.com/business-review/comcast-att-may-
thre...](http://www.annarbor.com/business-review/comcast-att-may-threaten-ann-
arbors-google-fiber-optic-hopes/)

[3]
[http://www.reddit.com/r/news/comments/1pn4cl/comcast_is_dona...](http://www.reddit.com/r/news/comments/1pn4cl/comcast_is_donating_heavily_to_defeat_the_mayor/)

[4] [http://www.dslreports.com/shownews/Time-Warner-Continues-
Leg...](http://www.dslreports.com/shownews/Time-Warner-Continues-Legal-
Assault-On-Community-Fiber-111183)

------
nostromo
This seems doomed.

"Come build us a super-fast network. You'll have to pay for it all. You'll
also be required to sell access to your competitors (those guys that didn't
pay to build the network) once you're done. We're also favoring companies that
happen to be current cell network providers in the city (all two of you).
Please respond to our RFP!"

~~~
josh2600
Why is this doomed? I'm from telecom land and this is how it is always done...

The fact that LA is soliciting bids might mean that they provide easements on
the entry rights (which are the main thing that prevent rollouts of this
nature). The common carriage clause is great and is actually the only way to
build networks like this if you want competition. I don't know if you know
this, but Fiber is not subject to common carriage laws like Copper and thus
the only way to have shared fiber networks is with regulation or commercial
interest (with the latter being unsurprisingly limited to the old boys club).

In short, this is actually the way to build a fiber network if you want
competition. Alternatively, raise a bond and build it yourself.

Source: I rolled out a fair amount of fiber for Comcast in San Francisco. Each
square foot of street we tore up was about $300 and crossing a cable car track
was prohibitively expensive. These costs were the main limitations in fiber
optic rollouts (pushing the payback period on buildings over 30 years made
them unbuildable). In fact, the main advantage Google Fiber got in Kansas City
(which was arguably unfair and anti-competitive) was easing of street cutting
costs.

edit: grammar.

~~~
ktsmith
I was under the impression that Google Fiber chose Kansas City in part because
they had to do little to no underground work. With government red tape cutting
being the other part.

~~~
josh2600
Well, pole rights in San Francisco are run through AT&T and the permitting
process (while it's supposed to be 30 days) can take up to 180 days to
complete.

There are still access rights required for poles because they're considered
part of the secure national communications infrastructure.

You'd be surprised at how expensive it can be to lay fiber if the government
doesn't want you to do it.

I hope that helps :). AT&T cried foul in KC because Google got a lot of
government benefits including space, leasing and access easements. Frankly,
they're right, but no one cares because AT&T is evil.

The moral of the story? Don't be evil[0].

[0]with as much sarcasm as I can possibly convey.

~~~
ktsmith
I understand all that having also done this type of work previously. In your
original comment you mentioned the KC deal included the "easing of street
cutting costs" which should have been very minimal in KC due to the fiber
being run overhead. That's all I was trying to address.

------
callmeed
Completely inaccurate back-of-the-napkin calculations:

\- There are about 1 million households in LA (3M+ population but 3 people per
household in LA County)[1]

\- Assuming the vendor got 75% sign-up for the free tier, that's 750K
households

\- I'll give them a generous freemium-to-paid conversion rate of 10% (sorry
but 5Mbs is fine for many people). That's 75K households.

\- I'll be generous and say that most paid households will get some kind of
bundle and pay $150/month

MONTHLY HOUSEHOLD REVENUE: $11,250,000

\- There are 250K non-farm businesses in LA County. I'm not sure how many are
in the city limits, but let's say 25K buy a paid. Since we know ISPs love to
gouge offices with higher prices for the same service, let's say they get
$250/mo from each business.

MONTHLY BIZ REVENUE: $6,250,000

\- Quick search puts Comcast's ad revenue is about 4% of total (Charter is
5%). So I'll throw in an extra $1M/MO in ad revenue from this deal, which I
think is generous.

TOTAL: $18.5M/MO

TIME TO RECOUP $5B: 270 Months (22.5 years)

[1][http://quickfacts.census.gov/qfd/states/06/06037.html](http://quickfacts.census.gov/qfd/states/06/06037.html)

EDIT: Updated with ad revenue numbers

~~~
gibybo
This assumes 100% gross margin. If they are buying a bundle, you probably mean
TV, so they are going to have to pony up to the networks. Then they'll have to
pay for upstream (I don't think AT&T etc is going to freely peer with a 750k
residential/commercial network), then they'll have to pay for all the support
costs associated with running a fiber network.

I'm thinking they'd be lucky to be able to use half of $18.5M/MO to pay off
their $5B investment. We're now at 50 years! And that assumes they can keep
their price high despite technological advancements over the next half-century
(imagine paying $150/mo for an internet connection using technology from 50
years ago). Oh, and they have to wholesale it to their competitors. There is 0
chance this is happening with these numbers.

~~~
callmeed
Yes, good point.

My thought with a bundle was TV, land-line phone/fax (businesses especially
still need this), and possibly even mobile service because I'm assuming AT&T
and Verizon are on the short list of vendors anyway.

My short list of vendors who are capable-and-possibly-dumb-enough to consider
this are: AT&T, Comcast, and Verizon.

On the other hand, some tech companies with streaming deals/services could
maybe do this without any bundle. Could even force some networks to get with
the times. So my shot list of vendors who are awesome-enough-but-probably-way-
too-smart to consider this are: Amazon, Netflix, Google & Apple.

------
sker
At the end of the day, this is what Google wanted, to push Internet adoption
forward. If others want to compete, mission accomplished.

------
altoz
> LA expects the fiber buildout to cost $3 billion to $5 billion, but the cost
> would be borne by the vendor.

> The new fiber network would offer free Internet access of 2Mbps to 5Mbps
> (possibly subsidized by advertising) and paid tiers of up to a gigabit.

Am I missing something? If the vendor is paying for the network and they're
offering free internet, is the only source of revenue advertising and tiers
above 2-5 Mbps? Seems like a money-losing proposition to me.

~~~
crusso
They even mention that the vendor would pay for all expediting of permitting
and such. Wtf is the city actually doing?

How is this even remotely something that a vendor would want to pursue?

~~~
mullingitover
It's a turnkey monopoly for only 3-5 billion dollars, the upfront costs are
fairly trivial when you account for the fact that this could be a business
that will operate into the next century.

Also, they're free to sell telephone and cable television service on top of
internet. I think a few companies have been able to grind out a profit on
cable TV.

~~~
altoz
There's another part of the article where this vendor is required to open
their network to competitors.

~~~
jws
They are required to sell wholesale to companies provided end user products.
It seems the intent is to set the wholesale price for profitability.

Gouging end users by controlling their air supply is one business model. The
city is preferring a model where the wholesaler makes a profit at the
transport layer and competes in a market at the retail layer. Sounds good for
the citizens to me and profitable for company.

------
gremlinsinc
Here's another good and BETTER option -- demand congress to cut 200 Billion
dollars/yr from Pentagon spending, re-invest that into nationwide fiber
infrastructure(Namely laying the conduit and pipeline for underground wiring)
-- then work w/ all telecoms to co-op building out a co-op shared fiber
network nationwide...

Personally I don't think any company should eb able to 'own' something that
runs along city lines under the street. -- just like they can't own the
airwaves..

Imagine just taking 200 billion + some equal investment from Google, ATT,
Verizon, Comcast, TimeWarner, etc- - and it'll be owned by the gov't and all 5
major carriers...

Also let users buy in early @ monthly rate they're willing to pay say $5 per
month -- which will accrue --so say it takes two years, they'd have $120 in
donations to the cause, and a $120 credit for fiber. If they did $100 a month
they'd have $2400 in free fiber credit, etc... Let's crowdfund the hell out of
this thing and just make it happen... The future is literally waiting on the
speed of our broadband pipes.

~~~
Scramblejams
Semi-relatedly, one of my greatest criticisms of all that stimulus spending of
the last several years was how incredibly unimaginatively it was allocated.
I've seen figures which indicate gigabit fiber could be rolled out nationally
to 95%+ of homes and businesses for $400 billion if gov't paid it all, or $100
billion if done in a private/public partnership. Another figure I've read is
that if the U.S. heavy duty truck fleet were converted to run on CNG, we could
reduce our oil usage by 20%.

Those would both have been transformational accomplishments, and the $950B or
so spent in total could have probably done it all thrice over. Bitterly
disappointing.

------
dakrisht
Great in theory, but I just don't see this happening with the telcos (AT&T and
TWC) controlling the entire broadband footprint in SoCal. It's called
collusion, look it up.

These two telcos (the worst in the world most likely) base their entire
business and offerings on providing high-speed internet of yesteryear. AT&T
UVerse service is a step up from traditional ADSL with speeds up to 25Mbps (I
get 19Mbps regularly and live about 2 miles from the CO). Telco execs have
been quoted as saying "consumer just don't need higher speeds." And most
probably do not, the niche consumers (probably the HNers) would love 1Gbps
speeds for reasons unknown (perhaps to host their own in-house EC2/S3!) but
the niche consumers are the 1% and telcos don't care about us.

The biggest problem with this concept of Gigabit internet in Los Angeles is
who will pay the bill, which will most certainly exceed the estimate.

AT&T already has plenty of fiber running to the pole with copper to the
household. There are tens of thousands of old buildings in LA that make it
impossible or extremely difficult to run fiber to the home. Not to mention, a
ton of landlords will simply not care to tear up their infrastructure even if
it costs them nothing. There is a VERY serious disease people in LA have which
is "We just don't care."

Additionally, the "free" access of 2Mbps - 5Mbps is redundant since these are
quite frankly ancient speeds regardless of their price economics. So with that
said, if you do a simple analysis of how many customers would actually pay for
high-speed (>100Mbps) access vs. the "free hoarders" it would be dismal. And
would never cover the costs of the roll out.

Finally, EVEN if the economics made sense, the telcos would simply fight it,
create problems for potential bidders, collude enough to force bidders out and
continue their shitty business.

~~~
josh2600
This is correct, but you do need to understand that there are technical
limitations to twisted pair. Even if AT&T or $TELCO runs fiber to the node
everywhere, twisted pair has gigantic line loss issues over long distances. We
really need fiber to the prem or frankly we're just messing around.

There's no financial model that will support building fiber networks except
the obvious societal benefit. Having fast fiber everywhere is incredibly
valuable from both a social and economic perspective. To put it bluntly, GDP
goes up when internet gets faster.

Now, the costs will always be wrong for a fiber network. I question why LA
would do this instead of building a WISP (wireless ISP) that would deliver
speed over radiowave. Forget tearing up all the streets, just put radio towers
on the buildings! The costs are lower, the bandwidth is fast and the rollout
is asynchronous (you roll the radio towers as you sign people up).

Source: I come from the Internet and stuff. My credentials: Comcast fiber
rollout, AT&T sales, Avaya consulting and 2600hz (open-source telco
infrastructure).

~~~
dakrisht
I completely agree with you - twisted pair has go to go and fiber needs to
terminate in the home.

It's actually a embarrassing that this country can neither build a somewhat
simple healthcare website and has some of the slowest access speeds in the
world.

I remember going to Bulgaria over the years for business and you can get a
100Mbps symmetrical connection for - wait for it - $40 USD.

WISP is an interesting concept and has a better economic model. If you look at
proposed 5G wireless speeds, you're looking at 10Gbps+ Even LTE today at
30-50Mbps is better than any non-Gig Fiber to the home (aside from the FIOS
service available to maybe 10,000 people in LA)

The biggest problem is and will be AT&T and TWC with their collusion.
Government regulation needs to intervene here otherwise private sector simply
stands no chance.

Trust me - I want even 100Mbps connection. It's frustrating.

Going back to the concept of a WISP - now that's some innovation if you could
make it happen.

There was a company on HN a few months back that made long-range WiFi domed
Tx/Rx units that could be mounted on poles, etc.

Anyone have that link?

~~~
jauer
The problem with WISP deployments is without exclusive use of spectrum (which
you have to win at auction from the FCC vs Verizon/at&t/etc) you can't do LTE-
type deployments where you can count on a low noise etc. Beyond that, keep in
mind that LTE 30-50Mbps is dependent on the spectrum set on a sector. If
everyone ditched the local MSO & Telco for LTE it would get so overloaded that
everyone would be saying it sucks and switching back to the MSO.

Generally speaking you are left to deal with licensed microwave in the ~$10k
per link for ~260Mbps or unlicensed microwave in 2.4/5.8Ghz where you have to
deal with noise from every WiFi router and other random junk. Depending on how
many other devices are out there you get less than 1 Mbps to 200 Mbps
depending on spectrum availability.

The technology for WISP deployments is fairly mature, to the point that if you
are using straight-up WiFi you are doing it wrong.

If you want to learn more, the current market leaders in the US for unlicensed
microwave are Cambium (former Motorola)'s PMP series and Ubiquiti's AirMax
series. Check them out.

Anyway, there just isn't enough spectrum available to do a robust city-wide
WISP network with significant uptake.

------
callmeed
If you're curious (like I was) about what officially constitutes their "city
limits" (correct me if I'm wrong), I _think_ it's all of this area:
[http://www.turkey-visit.com/map/united-
states/california/los...](http://www.turkey-visit.com/map/united-
states/california/los-angeles/city_map_los_angeles.jpg)

Which is _enormous_.

You can fit St. Louis, Milwaukee, Cleveland, Minneapolis, Boston, SF,
Pittburgh, & Manhattan inside of LA:
[http://laist.com/2012/06/30/map_how_many_major_us_cities_can...](http://laist.com/2012/06/30/map_how_many_major_us_cities_can_fi.php)

It makes me skeptical that $5 billion would cover the cost unless it was done
by a vendor who could piggyback existing infrastructure ...

~~~
Ryanmf
Indeed, the City is vast, and what people refer to as Greater Los
Angeles—which includes most of the grey areas on the first map, like my
hometown of Glendale, and a ton more to the east not displayed—is still more
vast.

Greater LA aside, there's no chance in hell they lay fiber to every residence
in the Valley (the communities that the 134/101 run through and everything
else north of that), there's no chance in hell they lay fiber all the way down
to San Pedro. Not for five billion dollars, not for five trillion dollars.

Anyone who has so much as casually observed an LA infrastructure/works project
in recent history knows that this ends in tears.

~~~
antimatter
> Greater LA aside, there's no chance in hell they lay fiber to every
> residence in the Valley (the communities that the 134/101 run through and
> everything else north of that), there's no chance in hell they lay fiber all
> the way down to San Pedro. Not for five billion dollars, not for five
> trillion dollars.

Why wouldn't this happen in the Valley? Genuinely curious as I live there.

~~~
Ryanmf
How have private attempts to run fiber in your neighborhood played out,
historically?

I think about the implementation of this am immediately confronted with
unpleasant visions of deranged homeowners associations in Bel Air and Encino
losing their damn minds. I imagine city planners and project managers haggling
over just how far down the priority list they can push isolated ranches in Sun
Valley and Sylmar. And keep in mind that these maps don't reflect elevation,
or places like Hancock Park where literally the entire neighborhood is subject
to Historical Protection Zoning guidelines, and the residents have enough
money/political clout to have Congressional bans on tunneling[1] enacted in
their favor.

The last mile in LA is a bitch.

[1]
[http://en.wikipedia.org/wiki/Hancock_Park,_Los_Angeles#Histo...](http://en.wikipedia.org/wiki/Hancock_Park,_Los_Angeles#History)

------
shmerl
That's interesting. Can NY pull anything like that through? Verizon
practically abandoned FiOS deployment, and even if they expand in a crawling
fashion, more competition will only boost the market and will make prices
lower (right now Verizon doesn't even offer gigabit bandwidth, and anything
that comes remotely close in FiOS plans costs some crazy money:
[http://www.verizon.com/home/fios-fastest-
internet/#fastest-i...](http://www.verizon.com/home/fios-fastest-
internet/#fastest-internet-plans)). I.e. they charge $300 for 500/100 Mbps
plan.

------
maxmcd
>>The new fiber network would offer free Internet access of 2Mbps to 5Mbps
(possibly subsidized by advertising) and paid tiers of up to a gigabit.

Subsidized by advertising? The only way I can think of doing this is by
injecting ads into internet traffic. Is that what they're thinking, or more of
a 'free starbucks wifi" approach.

And why is this bigger than Google Fiber? Couldn't Google bid on this
contract?

~~~
antimatter
From the article:

"But Google Fiber in its current form wouldn't be considered. "They would have
to change their business model," Reneker said of Google. "They only run
residential. We're requiring a component for the business. That would be a new
market for them."

~~~
maxmcd
Whoops, thank you

------
sentinel
What is the advantage for having ever-increasingly faster city wide internet
coverage? As opposed to just regular 100Mbps internet/3G/4G.

------
beachstartup
usually RFPs of this nature are published for due diligence purposes when
someone already has a plan ready to go and they need it to not look like a
slam-dunk selection process.

i wouldn't put too much stock in it.

------
kvinnako
Is it possible to do the same thing for a smaller community. For ex: just for
a community of 1000 houses within a 1 mile radius??

------
elwell
I live in LA, but by the time this is built, land-based internet will be
probably be completely outdated.

~~~
callmeed
We should take bets on what comes first: this or the high-speed rail.

~~~
wmf
Never underestimate the bandwidth of a Hyperloop full of helium-filled hard
drives.

------
pothibo
It's not bigger than Google Fiber. It's _because_ of Google Fiber.

Driving innovation forward.

------
philwelch
We were going to have this in Seattle, but then Comcast bought us a new mayor.

------
xfactor973
It sounded cool until i read the post. 2Mb for the free tier is garbage.

~~~
kalleboo
It doesn't mean there can't be higher free tiers if it makes economic sense,
just that those are the minimum required free tiers. The network will be open
access. How about you open a free 100 Mbit ISP of your own ontop of the fiber
network?

And to me they sound fine - enough of a connection that those living in
poverty aren't cut off from access to social services like job hunting and
news, but low enough that anyone who actually wants to get use of the internet
will become a customer.

