I was recently asked by a colleague how an ISP like Earthlink can provide low cost broadband in New York City. The truth is that without help, they can’t. Let’s look at the two possibilities that exist: using existing infrastructure and building new infrastructure.
There exist a handful of wires that enter most businesses and homes: copper/phone, coaxial, and electrical wiring.
Copper cabling is owned by Verizon. Because of an FCC requirement they must provide “common carrier” access at a competitive rate to other ISPs, which means that Earthlink can gain access to the copper and provide DSL. Earthlink would have to pay Verizon an access rate somewhat equivalent to (but probably a little less than) Verizon’s own DSL service, about $30 a month. Earthlink would need to charge at least this much in order to make any revenue on the service, so there’s no way they could underbid Verizon’s service. Earthlink, by the way, offers DSL in New York City at a rate of $19.95 for the first 6 months, and $45.95 per month for the second 6 months, which is an average of $32.95 per month for the minimum 1 year of service.
Coaxial cable is owned by either Time Warner Cable (TWC) or Cablevision, depending on which area of the city you are in. Over cable, Earthlink currently provides a cablemodem service at $44.95 a month. This service is essentially a rebranding of the Time Warner Cable Road Runner service, and as such, Earthlink must pay TWC an access rate that is close to TWC’s own cablemodem service, which is $44.95 per month. Furthermore, due to the recent “Brand X Supreme Court decision”:1, TWC is no longer required to let Earthlink provide this service.
Electrical lines are owned by ConEd. While technologies like Broadband over Powerlines (BPL) are starting to be deployed, they are still in their infancy. Even if such technologies were to be made available over ConEd’s power lines—and there are indications that much of New York City’s power lines and in building wiring won’t support this technology—ConEd the electric company is new to broadband service provision, and it is likely that they either will not allow a third party ISP like Earthlink to offer service, or will charge an uncompetitive rate for providing access.
Earthlink can build its own infrastructure to provide service. There are generally two components to a broadband service: internet connectivity/backhaul and last mile connectivity. Generally, the last mile connectivity—the line that brings the internet into your residence or business—is the most expensive part. There are options for backhaul that Earthlink can already use, such as dark fiber or leasing communications lines from a number of providers (Verizon included).
Last mile connectivity, in the case of wired service, requires digging up streets and sidewalks, bringing one or more cables into the basement of a building (in New York City, at least), and then bringing that cable up to the apartment or store that is receiving the service. This is expensive because it requires a significant amount of human labor, and because it requires lots of construction and politicking to get permits to do the work. It is unclear what such a network would cost to the end user subscribing to Earthlink service, but it would require an enormous investment on EarthLink’s part to even get 1 person hooked up. Furthermore, with the exception of perhaps fiber, such a network would just be a duplication of an existing copper, coax, or electrical network. Many buildings in downtown Manhattan already have a fiber line, so this might be a starting point, but fiber lines are absent exist from most residences in New York City.
The alternative is wireless last mile service. In this case, Earthlink would have to both select a technology—there are plenty out there that would work, including WiMax and Wi-Fi, and Earthlink is trialing them in other cities—and deploy the antennas. New York City, which is a large land area (303 square miles), has a secondary difficulty that isn’t shared by any other city in the USA: height. You can read a bit more about height issues that New York City presents in a “previous blog post”:2. These issues mean that there would have to be sufficient density of antenna deployment throughout the City in order to provide service.
Wireless solutions, however, are vastly cheaper than any wireline solution. Orders of magnitude cheaper. So much cheaper, in fact, that even a full City-wide deployment might be made available at an affordable (read $20 or so per month) rate to every resident.
Where can these antennas be placed? One option is to use the same deployment strategy that cellphone networks use, contracting with private land owners in the City and mounting them on buildings. This would work, but prices for antenna location rental are high, residents don’t want antennas nearby their apartments (the “not in my backyard” problem that plagues most infrastructure deployment), and there just aren’t enough enough locations. In fact, antenna deployment is so difficult that New York City has “_horrible_ cell phone service”:3. This is the primary reason why DoITT, New York City’s government IT organization has created a plan to lease City light-poles. Earthlink could use City light-poles for their network (they have already suggested that they’d like to), but the cost of doing so is still too expensive and too onerous to make it a viable option, at least under DoITT’s leasing requirements (the reasons for this are saved for another blog entry).
In the end, the only way to bring affordable broadband to New York is to involve the Government. Either through requirements that prevent existing network owners from price gouging and other monopolistic behaviors, or through programs that enables cheap infrastructure to be created by new network providers. In the latter case, we can solve the problem for one or a couple of private companies by reducing the cost of leasing public space, but this really discounts the value of the investments we as residents of New York City have made in our public infrastructure.
Really, the best solution is for us, as a City, to invest in building more public, shared infrastructure. We have already done so by “laying down lots of fiber cable”:4 (there’s still lots that has gone unused). We should invest in more infrastructure that will enable lots of companies to compete to provide broadband to New Yorkers. This way, we don’t create another monopoly broadband provider, but rather create a means for lots of market competition.