San Diego missing fast-Internet future – No Google Fiber or Verizon FIOS
Two major business news items over the last week have me wondering, yet again, why “broadband” Internet in San Diego County is so slow and expensive.
The answer involves the usual suspects: clumsy government policy and insufficient competition.
Truly high-speed Internet has quickly become essential infrastructure for a modern economy. With public officials constantly talking about how they want to help the economy, it’s discouraging that San Diego is fumbling a rare opportunity to invite private industry to actually do the work at little or no cost to the public.
Last week Google said it might expand to 34 cities the fiber-optic system in Kansas City, Kan., and Provo, Utah, that offers a tenfold increase in Internet speeds for $70 a month — and provides basic broadband for free. No city in San Diego County was on the list.
Then came a Wall Street Journal report that movie streaming provider Netflix agreed to pay Comcast Corp., the giant cable company seeking to buy Time Warner Cable Inc., for improved access to its network.
The deal raises the odds of stutter-free movie streaming for Comcast customers. And it probably renders obsolete the national “net neutrality” debate working its way through the courts over whether telecoms can force Internet content providers to pay a toll to reach customers across their systems.
To summarize, two big companies have figured out how to pay for network upgrades to improve service. Meanwhile, Google is proving that — when local governments cooperate — it can leapfrog local cable and telephone monopolies in building an Internet that’s already available to consumers in South Korea and Japan for far lower costs.
And so far, none of this innovation is happening here.
San Diego’s wired Internet is controlled by Cox Communications and Time Warner, with AT&T in some areas. In each case prices are high, innovation is slow, and the city receives 5 percent of gross TV revenues for the right to use public rights of way — about $18 million in 2010.
For perspective, Cox Communications charges $99 per month for download speeds of 100 megabits per second in San Diego County, while Verizon’s Fios fiber-optic system charges $300 for 500 megabits in Southwest Riverside County.
But Google Fiber charges $70 for 1 gigabit per second, or tens times the speed of Cox’s top residential offering and double Verizon’s. Gigabit Internet with high-definition television is $120.
Incumbent monopolies or duopolies don’t want competitors, particularly those trying to poach TV customers who want to watch programs on demand over the Web.
It’s not like they lack investment capital. Verizon reports a 30 percent operating margin. In Austin, Texas, ahead of a Google Fiber rollout, Time Warner is upgrading its system and dramatically boosting Internet speeds.
To be sure, running fiber cables to every home and business is a massive undertaking. Google and other potential competitors look for cities that are prepared for a hundred-fold increase in permit applications. They need complete GIS data on every conduit line under every stretch of pavement and sidewalk.
We’re just not ready for this. San Diego doesn’t even have its sidewalks fully mapped.
Cities can prepare themselves but it takes time, focus and smart policies, says Joanne Hovis, a consultant who advises governments seeking to install or outsource fiber-optic networks.
In one example, Hong Kong has a “dig once” policy that requires contractors to inform communications companies when they cut into a street.
“When the road is open, put in a communications conduit,” she said. “If they don’t do it then, they don’t have access to that road until the next time. It costs fractions of pennies on the dollar,” compared to tearing up streets over and over again.
Another tactic is to build fiber lines and let competitors install their own switches and lease access to the common system.
San Diego has no such comprehensive plans for truly high-speed Internet.
It’s a missed opportunity, to put it mildly. San Diego is among the world’s top incubators of innovation. Whether the subject is robotics, biotech or medical devices, the common denominator is information technology.
Today’s breakthroughs increasingly depend on access to even more information. In the fast-growing “Internet of Everything,” companies are shipping sensors that allow manufacturers and retailers to track every item at every step of production, pouring vast amounts of data onto networks.
At a health care conference last week in Encinitas hosted by the San Diego North Economic Development Council, I heard top executives from six local hospital systems describe how telemedicine is becoming vital to their business models. Physicians are increasingly sending video and data to specialists for instant consultations, and patients are already being seen in virtual house calls that improve care at sharply lower costs.
All this requires the kind of super-fast Internet that Google is seeking to expand.
The company isn’t talking about why San Diego isn’t on its expansion list. One reason could be that, despite all the talk at City Council lately about infrastructure, nobody from the city has expressed an interest in working with Google or anybody else to build the next generation of high-speed Internet.
In November the otherwise dysfunctional Los Angeles City Council moved to request proposals from private companies to build a fiber-optic system to every home and business in the city.
So it has come to this: San Diego is being out-innovated by Los Angeles.
Posted on March 1, 2014, in News & Politics, Technology and tagged fios, google, google fiber, high speed internet, verizon fios. Bookmark the permalink. Comments Off on San Diego missing fast-Internet future – No Google Fiber or Verizon FIOS.