Features & Columns

Excerpt: The Future is Fiber

High Fiber Showdown | Excerpt

If the information-carrying capacity of copper wire is like a two-inch-wide pipe, fiber optic is like a river 15 miles wide; you wouldn't even try to download a 4K movie using a copper connection, but using fiber you could download 10 movies in a second—or run your own business remotely, or see your doctor or members of your family, when needed, as needed.

Most of the phone calls going on throughout the world at any moment could be carried simultaneously across a single hair-thin strand of fiber. (The submarine cable connecting China and the United States contains just eight strands.) But because people send and receive information from where they physically are, fiber optic cables need to be physically distributed to reach individual buildings in order for fiber's capacity across all the parts of the network—middle-mile, long haul and undersea cables linking continents—to be fully harnessed.

In many developed countries, that last mile is the weakest link in the network, its materials (copper or coaxial cable) serving to throttle communications just as they are starting on their journeys from individuals to the rest of the world, and slowing incoming data just as it is about to arrive in those individuals' lives. Once the fiber cable reaches an individual living unit—that is, a home—data can be sent over the air to devices we wear or hold in our hands. The plan is for 5G wireless to allow for the sending of enormous amounts of data over the air across very short distances, to reach humans, handsets, sensors or anything else capable of receiving or transmitting data.

In the United States—because of decades of political maneuvering by the enormous private companies that sell internet access to American consumers, a lack of leadership at the federal level, and the invisibility of this entire policy area—we have failed to make the upgrade to cheap last-mile fiber connectivity.

All the policies important to us as a country—becoming the most advanced healthcare nation in the world, the most energy efficient, the most innovative, the most resilient—depend on having last-mile fiber and advanced wireless services available cheaply to everyone. We must do better.

The submarine cables between continents are all fiber, the lines between American cities are almost all fiber, and the data centers run by companies like Google and Akamai are all fed by fiber. But there's an enormous distribution bottleneck close to you and me: Fewer than 10 percent of Americans have "fiber to the home," or FTTH.

The FTTH distribution issue isn't easy to fix. Although several countries have made installation of FTTH an industrial policy priority and have steadily upgraded their "last-mile" networks, a series of federal- and state-level policy missteps over the past 10 years has left America with awful fiber adoption. The completely deregulated private companies on which we depend for wired communications have systematically divided markets, avoided competition and established monopolies in their geographic footprints. The results are terrible: very expensive yet second-rate data services, mostly from local cable monopolists, in richer neighborhoods; the vast majority of Americans unable to buy a fiber optic subscription at any price; and many Americans, particularly in rural and poorer areas, completely left behind.

You can think of wireless as the endpoint of a fiber connection, the place where the pipe bringing water into your home is transformed into a shower head—except that it is spraying not water but data.

This fiber-plus-wireless combination is alluring: With fiber to every cell site and every WiFi access point, you could be constantly connected and never think about it.

However, only about 10 percent of Americans are connected to fiber optic lines, mostly in the very richest parts of the country, and they pay sky-high subscription rates; where fiber last-mile connections do exist, they are often extraordinarily expensive compared with international benchmarks. The problem is worst in rural areas, but it is awful in most cities as well.

The cable and telephone monopolies that dominate access have no particular incentives to upgrade to fiber. These local monopolies are largely unconstrained by either competition or oversight. For services providing what the Federal Communications Commission (FCC) now labels high-speed access, defined as 25 Mbps download and 3 Mbps upload, almost 90 percent of Americans have at most one choice of high-capacity provider. (Why the FCC chose to privilege downloads over uploads in setting this standard is a mystery to me; this standard fits the plans of the giant companies that control internet access in America, most of which themselves also sell packages of TV channels and thus have a business interest in ensuring that consumers think of the internet as a means for consumption of entertainment rather than for use in education, healthcare or work, through video calls—all of which require symmetric connections, with equal upload and download speeds.)

Residents of South Korea, Japan, Singapore and Hong Kong can subscribe to gigabit access (offering 10 times more capacity than a 100 Mbps subscription) for between the equivalent of $30 and $50 a month; in Sweden, which has announced plans to have 98 percent of its residents connected to gigabit fiber by 2025, the 100 Mbps symmetrical fiber connections already available to more than 70 percent of residents cost between $35 and $40 a month. Singapore's connectivity is simply astonishing: You can buy gigabit last-mile fiber access from any one of a large number of providers for prices ranging from $40 to $60 per month. By contrast, Verizon New York ... charges a ridiculous $305 a month for symmetric access speed of 500 Mbps for both uploads and downloads, and doesn't offer gigabit fiber access at all.

Right now, not enough people around the country understand the fundamental importance of fiber, just as in the 1920s they might not have understood the fundamental importance of electricity. Often we squabble over things that are not nearly as important to the success of the United States.

When electricity was young, it was a luxury, sold by private companies following a "demand-driven" model. Where investors saw the possibility of a reliable stream of revenue, they would borrow or put up the initial sum of money necessary to wire businesses and homes with electricity. But they didn't foresee that their product would be everywhere. For instance, even though San Francisco's streets were first lit with electric light in 1876, the first home to get electric lighting in San Francisco had to wait until 1899. The electrification of America, by and large, followed a set pattern: municipal buildings and businesses first, wealthy urban dwellers next, then poorer urban dwellers, and last of all, rural homes and farms. This was the demand-driven model in action.

What explains this pattern? The answer is simple: The physical network for the delivery of electricity involved very high up-front costs, and the handful of large private companies that dominated the electricity market in the United States in the early part of the 20th century were, reasonably, looking to make the greatest profit on their investments as quickly as possible. That's why the densest areas with the most reliable potential returns got service first. There was also little or no public oversight of these companies' activities, and what oversight existed was largely ineffective.

There is a problem, and a large one. Although the copper-line phone system in the United States was the envy of the world when it was installed, and provided Americans with the same high-quality service at roughly the same price wherever they were sitting, we are falling far behind when it comes to upgrading that set of lines to fiber optic internet connections to homes and businesses—the modern-day standard if you live in most parts of Asia or northern Europe.

We are amplifying and entrenching existing rural and urban divides and, even more starkly, inequality of opportunity.

This state of affairs didn't come about by accident. It happened because of lapses in policy and an uninformed, vague belief that the private market could be relied on to give Americans great communications infrastructure. That mindset hasn't brought us the economic growth or social justice the country needs.