The Gigabit Divide

WDM_FOWe all know what the digital divide is – it’s when one place or demographic has broadband when those nearby do not. The term was originally coined after DSL and cable modems came to urban areas while rural America was left with dial-up access.

Over the years the definition is still the same but the circumstances have changed. For example, there still are some millions of households in the country stuck with dial-up or satellite broadband. But most of the digital divide today is an urban / rural divide where the telecom companies have invested in much newer and faster technology in urban areas and have ignored rural areas. Metropolitan areas all over the country now have at least some 100 Mbps cable modems while surrounding smaller towns often still get maybe 3 Mbps. And there is an economic digital divide within cities where some neighborhoods, particularly richer ones, get better infrastructure than poor.

But we are about to embark on the most dramatic divide of all, the gigabit divide. I spent last week in Austin and they are a good example of what I fear will be happening all over the country. There are three companies building gigabit fiber in Austin – Google, AT&T and Grande. None of them are going to build everywhere. For instance, Google will only build to a ‘fiberhood’ where enough people in an area pre-sign with Google. And the other two carriers are going to do something similar and carve out their parts of the market.

This is great for those who get fiber. They will end up with the fastest fiber connections in the world, and hopefully over time that will make a big difference in their lives. But my concern is that not everybody in Austin is going to get fiber. To see how this works we only have to look at Verizon FiOS. For years Verizon built to the neighborhoods with the lowest construction costs. That meant, for example, that they would favor an older community with aerial cable that could be over-lashed over a newer community where everything was buried and construction costs were high.

You find a real hodge-podge when you look closely at FiOS – it will be on one street and not the next, in one neighborhood and not the adjoining one. And Austin is going to be the same way. These three carriers are not going to all overbuild the same neighborhoods because in a competitive 3-way overbuild none of them will make money. Instead it is likely that Austin will get balkanized and chopped up into little fiberhoods for each of the three carriers.

But what about those that don’t get any fiber? There will likely be significant parts of the City where nobody builds. Those houses are going to be on the wrong side of the gigabit divide. Since most of the world is on the wrong side of the gigabit divide that doesn’t sound so bad. But think what it means. Who is going to buy a house in the future Austin that doesn’t have gigabit fiber? This is going to create a permanent and very tangible division of fiber haves and have-nots.

Cities used to protect their citizens against this sort of thing and that is why cable franchises were awarded locally so that a City could make sure that everybody got served. But cities are embarrassingly falling over themselves for Google to the detriment of many of their own citizens. They are going to take care of the richer neighborhoods at the expense of the poorer ones. This is not what cities are supposed to do since they represent all of their citizens. We have had processes in place for years to make sure that telecom companies don’t bully and divide our communities, and now City Hall is in front of the line inviting them to do so.

I say shame on Austin if they wake up five years from now and find that 20% or 30% of their City doesn’t have fiber and is being left far behind. The houses and businesses in those neighborhoods will have lost value and will probably be the seeds of the slums of the future. When we look back twenty years from now I think we’ll see that this short-sighted policy to bow to Google cost the City more money than it gained.