I Want Me Some of that 1 Gigabit, Too

1_gigabitCox Communications will spend $81 million to upgrade residential broadband service in Fairfax County to “gigabit” Internet service, providing speeds up to 20 times faster than most existing services. It will be the first Internet service of that speed available in the Washington, D.C. area, and one of only a few anywhere in the United States.

“Fairfax County has long been recognized for its high-tech infrastructure as well as its IT companies, highly skilled workforce and tech-savvy local government, so it makes perfect sense that this would be the first place in the Washington area to get this kind of residential Internet service,” said Gerald L. Gordon, CEO of the Fairfax County Economic Development Authority in a press release. “Our mission is to attract and retain companies to build the commercial tax base, and this is the kind of advancement that makes the county more attractive to companies that want to grow in the area.”

Bacon’s bottom line. Waaah. I’m jealous. My current Internet service sucks. I want 1 gigabit Internet service, too! I want it now!!

That’s the way the cookie crumbles. Broadband providers like Cox, Verizon, ATT, Comcast and others have finite capital resources to invest in upgrading their broadband networks. They will invest first in locations where they believe they can generate the greatest financial return. In other words, they will invest in places like Fairfax County — where there is the greatest density of tech-savvy residents willing and able to pay a premium for the service — before they come to lower-density suburbs like Henrico County, and they will invest in Henrico County before they extend the service to extremely low density places like Powhatan County.

Frankly, that’s the only economic logic that makes sense. So, I’ll have to be patient. The big broadband providers will get to the digital hinterlands eventually.

— JAB

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24 responses to “I Want Me Some of that 1 Gigabit, Too

  1. Oh, but Jim. You should be for Net Neutrality. Under that enlightened policy, shirley Henrico would have this great new service.

  2. well , we seem to have continuing issues with consistency:

    ” ….Cox Communications will spend $81 million to upgrade residential broadband service”

    ” “Our mission is to attract and retain companies to build the commercial tax base, and this is the kind of advancement that makes the county more attractive to companies that want to grow in the area.”

    I guess I’m ignorant of the connection between business, economic development and residential broadband.

    and a related secondary issue where in BR, we read of efforts by government to spur economic development – that are apparently viewed as legitimate versus these opposing discussions about the “free market” and ROI and no govt involvement.

    so..residential broadband to “help” business… does that make sense or am I missing something?

    and should govt be doing economic development and if so – is internet one of those areas govt should doing that economic development thang?

    just asking…..

    • A significant number of small businesses start out in households.

      Also, a significant number of people work from home, either occasionally (evenings, weekends, snow days) or regularly.

      I am all for an even-handed provision of infrastructure – roads, bridges, public education, and public safety. I am all for government insuring that communities have utilities – which to me includes electricity, phone service, and Internet.

      I am not, at all, in favor of government subsidizing individual businesses in favor of their competitors.

      You may not agree with me about all this, but I am consistent about it.

  3. Cox Communication’s mission is to make money for its stockholders. Period. Ignore the fluffy press release. If it is investing in upgraded service, it expects to reap a major long term return, and my guess is it will. But in other parts of the state, where users are more spread out and heavy users even more spread out, the investment will not pay off very quickly or may not pay off at all. Your day will come Jim – up at my place near the Blue Ridge, well, maybe never….it is a good day when I can stream a full 30 minutes of Netflix without interruption! And I’m sure outside of my subdivision, out in the real countryside, even that is a dream.

    Dominion needs to bury some very robust fiber backbone alongside that pipeline!

  4. But, Jim, we up here in the “land of asphalt & traffic” need some compensation for our wretched lives!

  5. “The big broadband providers will get to the digital hinterlands eventually”.

    They’ve only been waiting what, 20 years now? They might get DSL but doubtful they’ll be getting fiber in the near future unless there’s some sort of subsidy involved.

    • Not in our lifetimes! All the money, all the business incentive, all the politics, is behind exponential growth in the tech corridors, not minimalist “broadband for the people.” There is a place for the municipal broadband option for those large portions of Virginia the for-profits aren’t willing to serve, like REA for electricity. Unless Google comes in and does it for free, in exchange for all that marketing data!

  6. OMG that’s me. Maybe I won’t cut the cord. But the cost is too high. May be trying to compete with FIOS. I got more cable services running through my front yard than most. I had a dispute with Verizon on my front yard dig-up on FIOS so we try to be a Verizon-free home. I bet COX is slowest now so the upgrade is just keeping up. Believe many here switched to FIOS.

    • I don’t know about Lynchburg, but your link is terrific; look at what others are doing: “Chattanooga has been joined in recent years by a handful of other American cities that have experimented with municipally owned fiber-optic networks that offer the fastest Internet connections. Lafayette, La., and Bristol, Va., have also built gigabit networks. Google is building privately owned fiber systems in Kansas City, Kan.; Kansas City, Mo.; and Austin, Tex., and it recently bought a dormant fiber network in Provo, Utah.”

      It seems that while a municipality is peculiarly ill-equipped to run a cable system, it may be the BEST-equipped to build and own a fiber network like one of these and lease it to the highest bidder, attracting a lot of attention and new taxpayers/employers in the process.

      • I wonder whether Google is using profits from its other businesses to cross-subsidize its fiber networks, which are competing with other businesses. Our anti-trust laws sometimes frown on that. Ask the Old Bell System.

  7. Jim, the only option you’re giving people outside of a few areas is to wait for the big cable providers. With a warning not to hold your breath.

    Why? As you’ve pointed out, the big cable providers are not providing gigabit Internet to most areas, even though it would greatly help with growth, economic prosperity, and availability of training and education.

    There are options for wireless broadband as well as wired – heck, even Project Loon could be an option.

    What we have isn’t okay. Sitting on our hands is not a good response to a bad situation. Yes, I have broadband. Too many people in my area don’t, and it hurts their economic and educations prospects.

    As far as “only a few localities in the US ” – Ting is offering gigabit Internet in Charlottesville.

    Bristol Virginia/Tennessee has gigabit Internet via its municipal network, Optinet, in a 280 square mile area.

    Downtown Blacksburg Virginia has gigabit Internet through TechPad.

    So why isn’t Virginia encouraging municipal Internet, exactly? This is something with a huge potential to spur economic growth, as Fairfax correctly notes.

    I think being proactive is better than waiting for Godot.

  8. one way to think about municipal broadband might be to compare it to how water/sewer is done.

    first – most municipalities, the govt does water/sewer

    next – it’s ratepayer-based, not taxpayer based

    next – there are two costs – initial “connect fee” and monthly fee

    next – when and where to expand is based on if the service can continue to operate without a deficit..

    next – if you want to live somewhere where there is water/sewer -you go to where water/sewer is provided – you do not expect it to be extended to you.

    and outside of the municipality? you do the internet equivalent of well and septic or you go to a HOA community that has a private water/sewer provider (which has many complaints about quality and cost.

    During the last outing – we visited a winery in rural NC – miles and miles from any cable – and they processed VISA easily and quickly for purchases.

    I did not inquire but I suspect they were either using HughesNet – a satellite internet (that folks complain about) or cellular (I noticed that the hotspot was showing cellular internet was available).

    I know quite a few folks who live in the “country” and get internet either via Hughes or cellular. Two work out of their home… one a contractor for the govt – the other a consultant for MedicAid psychiatric services – in Missouri – no less – the former – Hughes and the latter via cellular – he has line of sight to a tower on the Blue Ridge Parkway.

    • Most people I know in rural areas don’t care about getting public water and sewer, and don’t particularly want it. Unless you have a business that has lots of people onsite (restaurant, hotel, office park) it doesn’t limit your ability to do business, educate yourself, or make a living.

      That isn’t the case for Internet connectivity. This is the equivalent today of having phone service in the 20th century. At least with electricity, you have options to generate it locally.

      Wireless broadband can work really well. It is IMHO a viable option for many rural localities that should be explored.

      My personal experience of satellite was that it tends to be expensive, slow, and unreliable in bad weather. It’s the only option some people have, but it doesn’t really meet the need.

      I also think Project Loon is worth exploring for feasibility.

    • Larry, I don’t think you’re hearing what people are saying.

      You’re saying, move to where they have Internet.

      But the point people are making is that, by extending Internet to a wider area, you will have a more prosperous, better educated community that will pay for itself, through fees and tax revenues.

      You’re not addressing the actual point, which is that this is feasible and can pay for itself if done wisely.

      • Virginiagal2, if extending Internet to underserved areas is “feasible and can pay for itself if done wisely,” then I think you have spotted an incredible market opportunity, which, if proven successful locally, could be scaled across the country and make you a billionaire. I’m all for competition! I’d love to see some sassy start-up beat the big cable/telecom companies at their game. Go for it!

        • Jim:

          You need a bit more of a nuanced view. You don’t need to extend the internet, you need to extend high speed networks to access the internet. Virginiagal has been describing some different technology approaches to getting high bandwidth connections to less densely populated areas. Project Loon, for example, is a Google effort using high altitude balloons. HughesNet (a good DC area company) uses satellites.

          As far as Virginia, things are not so bad …

          http://broadbandnow.com/Virginia

          • One of the reasons why rural Va has electricity is because in 1932 Virginia took over county roads and created the secondary road system.

            that gave the utilities a guaranteed, uninterrupted right-of-way to put their power poles without negotiating on an owner-by-owner basis – which, in turn, made it much easier and cheaper to provide electricity – even to less dense areas.

            A stated premise seems to be that because electricity is vital – it justifies it being subsidized by taxpayers and ratepayers.

            is that true? Do the Conservatives here in BR agree with that premise?

        • Breaking even is not a business plan, much less a business plan that will make you a billionaire.

          The technologies I mentioned are wireless – not wired – and have been used to deploy Internet to very remote areas, even in third world countries. Project Loon broadcasts from what are basically weather balloons. Wireless broadband uses towers. For any wireless, you need line of sight, but you have to have that for satellite as well.

          It seems like Loon or another wireless could surely manage to work in Montgomery County, given that it worked in Sri Lanka. “Worse technology than the third world” isn’t really something to brag about.

          When you get good broadband deployment, you greatly increase the ability to use modern technology at home and in businesses. That results in more startups and expansion of existing businesses, which increases tax revenues without having to increase tax rates.

          Further, better connectivity expands options to educate kids and retrain adults at a low cost – including online classes, electronic textbooks, and use of Internet tutorials and webinars. That should increase employment and improve productivity, again increasing tax revenues without increasing tax rates. It’s a way to improve schools by using existing free resources, rather than wishing there was a stronger tax base to pay for improvements.

          When businesses do things that increase overall prosperity, and thus increase tax revenue, businesses don’t get to keep that sweet tax money the county is collecting.

          Break even may not be tempting for investors. For a locality, looking at the benefits it brings along with it, investing in municipal cable, or encouraging a co-op, there are benefits private investors don’t have.

      • On this issue I am voting with virginalgal2 hands down no contest.

  9. @virginiagal2 –

    hearing what people are saying…

    well yes – … people want all sorts of stuff – for less than what it costs to deliver it!

    😉

    so I’m playing a little devils’ advocate here –

    if expanding internet connectivity was economic – i.e. it generated sufficient economic activity to pay for it and then some for profit –

    is that the premise?

    I actually somewhat agree with you – but I make the argument of the opponents – to try to get a more objective calibration – to inoculate against that nasty leftist tax&spend mentality that Conservatives love to use as partisan cudgels…

    I note also in our county – when a new school is built – they do it according to the geographic “need” – and then if there is no water/sewer, they’ll extend water/sewer to the school – and then everyone along that corridor can hook up – for a fairly hefty hook-up fee ..

    I would propose that approach for internet for schools as clearly any school that does not have internet connectivity is serious trouble of being able to deliver 21st century education.

    Finally – I DO think this is not about business making a profit – it’s about business not liking competitors – especially when those competitors are the govt – “poaching” on future territory once it densifies…

    but vgal2 -you’d also a bit of an odd wad here… haven’t I heard you argue the GOP narratives at times?

    😉

  10. Broadband deployment can be economic, with wireless options available where density can’t justify wired. However, the laws in Virginia have made it very difficult for counties to pursue municipal broadband. John has indicated that wireless broadband might actually be easier to achieve – I would love to hear more about that and the process involved.

    ISPs have a reason to oppose – the voices in favor are less organized and less powerful, but those individual citizens do have an interest here. The nice thing about the wireless option is that, just like cellular phones, it can be provided incrementally as it becomes feasible.

    Schools and county offices generally are rolled out as wired, even in remote counties – in fact, that’s how many non-urban people, including myself, have broadband. Basically, when house-hunting in rural areas, you may have better options near schools, universities, and government offices. That does not adequately address the situation of someone running a cattle farm, as previously mentioned in this thread.

    Re Republican versus Democrat – I’m more – do what makes sense and actually works, not what the current policy position of whatever happens to be, and where it’s not clear, err on the side of letting people make their own choices.

    I’m not particularly in favor of Universal Pre-K, for example, because studies of non-boutique programs have shown high cost and little benefit. I am strongly in favor of programs that encourage parents to read to their kids or that encourage kids to read, because studies have shown a high correlation between kids that are read to, and kids that read, and overall success in school and in later life. They show a large benefit for a relatively modest cost. So if I’m taxed ten dollars to cover a program, I’d rather it go to the latter than the former.

    I also tend to be a bit cynical in evaluating “who profits from this” when hearing about expensive policy proposals or new regulations. City of Richmond is the current glaring example, but it’s certainly not the only one.

  11. vgal – here is something worth a read:

    Why federal spending on disadvantaged students (Title I) doesn’t work

    http://www.brookings.edu/research/reports/2015/11/20-title-i-spending-disadvantaged-students-dynarski-kainz?cid=00900015020089101US0001-11201

    I’d be curious as to your opinion. thanks!

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