Tomorrow morning I’ll end a two-week research trip to Copenhagen, Berlin, Amsterdam, and Stockholm, and fly home.
It’s been quite a journey, and I’ll be thinking about it for years to come. I was on several quests, focusing on government innovation, fiber policy, and the effect of high-capacity communications on peoples’ lives.
Later posts and reports (and a book) will focus on government innovation. But for today, let’s start with fiber.
A recap: Fiber to the home deployments in America will bring both direct and indirect economic benefits to the country in the form of new and better access to new jobs, the creation of new businesses, increased home values, better access to healthcare, improved educational resources, and more effective government services. But even though FTTH is routine and inexpensive in cities in countries like Sweden and South Korea (and prices for fiber connections are far lower in Seoul, Amsterdam, Olso, Copenhagen, Paris, Stockholm, and Singapore than they are in New York), these deployments are still seen as luxurious “extras” in America.
It’s fitting that I ended in Stockholm (about 900K residents), because Sweden is the place where fiber policy has been most thoroughly thought out. But it’s been made up of mostly local policies. Cities have a great deal of autonomy and responsibility in Sweden (as they do in the States), and cities here think of fiber as infrastructure – like the street grid or electricity.
Stockholm became frustrated that the incumbent, Telia, had installed very little fiber. So they called for the building of a second fiber network. The city wanted to adhere to these principles:
1. The public sector is responsible for infrastructure including IT-infrastructure
2. Infrastructure must be open to all players on equal terms in order to create competition at the service level
3. The infrastructure must be provided by a neutral player
4. Non-discriminatory and transparent pricing policies are required
So it created Stokab, a city-owned entity, that would own just the ducts, rights of way, and dark (unlit, passive) fiber. The idea was that the presence of this neutral infrastructure would stimulate investment, competition, and sustainable development.
They’ve succeeded – wildly.
Stockholm was the first place where LTE mobile service was provided. Consumers and businesses have many choices of FTTH plans provided by competitors. About 90% of households have it and 100% of businesses. Stokab paid off its loans and has been extremely profitable as a dark-fiber rental business. It’s lowered the threshold for doing business for every other part of Stockholm’s ecosystem.
So now businesses in Stockholm pay a quarter of what businesses in NYC pay for 100MBps service. And people renting dark fiber in Stockholm pay about 14 times less than what you’d have to pay in NYC.
You may have heard of Stokab. But I bet you didn’t know that almost 200 other cities in Sweden have open access fiber networks.165 of them are owned by the municipalities. Yes, they have cable too – they have parallel networks – but it’s worth it to have an open access fiber network so that everyone will have a choice of services, prices will be low, and mobile operators will have fiber to work with. No gatekeeper will ever control communications access in Sweden.
This brings us to Leverett.
Leadership in FTTH deployments will have to come from America’s mayors, and they will be learning from each other. I recently worked on a report with Robyn Mohr about fiber in Leverett, MA. I’ll add the link when it’s up.
This report adds to a growing number of studies of individual American cities that have
undertaken FTTH projects.
The report describes the planned buildout of a FTTH network in Leverett, a sparsely populated small town in Western Massachusetts that is currently underserved by private Internet access providers.
Here are our findings:
• LeverettNet is a last-mile fiber to the home network that will be
operated by a publicly controlled Municipal Light Plant entity. The
MLP will operate independently of Leverett’s political infrastructure,
but will be required by state law to charge subscribers no more than
the cost of providing service.
• The network will connect every household in Leverett. Although
every residence and business will be linked to LeverettNet, individual
homeowners will have the discretion to decide whether to subscribe.
• LeverettNet was planned to take advantage of MassBroadband 123, a
publicly funded fiber network recently built to connect towns (but not
individual homes and businesses) in Massachusetts.
• Long-term leadership, planning, and community engagement by
Leverett’s public officials prompted the citizens of Leverett to
approve a modest property tax increase in return for the long-term
benefits of a FTTH network.
• Although LeverettNet has opted for a tiered set of access plans,
had it decided to deliver 1Gbps to every home and business in Leverett
the cost of service to subscribers—including Internet access and phone
service, state and local taxes, access fees, network operation fees,
and maintenance fees—would have been $61.30 per household per month.
Or just about what it costs in Stockholm.