Photo credit: Travis Wise
Google Fiber announced this week that it is adding both San Francisco, CA and Huntsville, AL to the growing list of cities where it provides gigabit service. This is great news for startups and aspiring entrepreneurs in the two cities, who will have improved access to ultra high-speed service (100x faster than most current broadband providers) and increased competition among providers. But this week’s announcements are especially noteworthy because Google Fiber will be deviating from its typical build out approach with these two new expansions.
With the exception of Provo, UT, where it purchased an existing fiber network, and Atlanta, GA, where it utilized a small amount of existing fiber in addition to mostly new construction, Google Fiber has traditionally built its networks completely from scratch. But in San Francisco and Huntsville, the company will utilize existing fiber networks to provide service instead. The company has not disclosed what entity it will lease from in San Francisco, but in Huntsville, Google Fiber is relying on an innovative public-private partnership that could serve as an effective, low-cost model for other cities seeking to increase broadband competition and provide next generation speeds to its citizens. Huntsville’s utility provider, Huntsville Utilities, is planning to build out a fiber system to monitor its own utilities systems. Once the fiber is built, Huntsville Utilities will lease the excess capacity to Google Fiber and other providers. Google Fiber will then provide its gigabit internet services to residents and businesses using those lines.
This is a relatively unique approach, not just for Google Fiber, but for the market overall. Traditionally, there have been two main paths to service: either a telecommunications provider lays out a huge capital expenditure to build a network, or a municipality constructs and manages a network itself. But in recent years, a third way has emerged where a municipality (or another entity) constructs the network’s basic infrastructure and then leases wholesale access to that network to any provider who then offers all retail services. This approach has seen success in places like Washington State, Santa Fe, Maine, and New York.
So while not completely novel, Google Fiber’s approach in San Francisco and Huntsville shows a departure from the traditionally bifurcated model by pursuing this third way—a first for the company. This “open access” model can have immense benefits, increasing access, affordability, and competition. Municipalities have an incentive to construct a network that serves all of their residents, not just those where it would be cost effective. This brings access to a larger population and helps bridge the digital divide. But every city is different. Some cities like Chattanooga, TN and Danville, VA have created hugely successful municipal broadband systems with the city itself providing retail access. But a purely public network may not always be the most effective option. Beyond the legal challenges many cities face when pursuing these networks, problems often arise in the actual administration of service. For many cities, this is a completely novel undertaking for which they have limited expertise or knowledgeable personnel. Allowing an experienced private company like Google Fiber to provide the service instead represents a lower-cost, lower-risk option.
Communities should be free to choose the business model that best suits their unique needs. But the model pursued by Google Fiber in San Francisco and Huntsville highlights one more approach that cities can add to their toolkit. There are currently hundreds of U.S. cities where thousands of miles of “dark fiber” networks are going unused. Google Fiber’s new service will unlock fresh opportunities for innovation and bring much needed competition to both San Francisco and Huntsville, and we are hopeful that models like this can be successfully replicated across the country in the coming months and years.
