Some of those costs can be minimized by installing fiber while other utilities and maintenance operations are being performed. Some cities have adopted a "dig once" policy for this, saying every time there is a dig then fiber must also be installed if it is not already in that location.
I would also be surprised if a city like New York didn't already have a fair amount of dark fiber available.
"The way this plan will work is that $25 million will go toward new wireless corridors, which will deliver free or low-cost access to 20,000 low-income households. Another $7.5 million will go to upgrading or expanding at least five existing wireless corridors. Then $1.6 million in state funds will focus on broadband around industrial zones for at least 500 businesses."
It's too bad his plan ignores the monopoly TimeWarner has over service to most of his city's customers. If more competition were introduced beyond the sporadic RCN and Verizon FiOS available to some buildings, it might bring down prices for all. I agree that universal broadband access is a net positive - but when the only innovation being introduced is a subsidy it's debatable whether state tax money should be spent to ensure his constituents have free access to watch Netflix and play Candy Crush.
when the only innovation being introduced is a subsidy it's debatable whether state tax money should be spent to ensure his constituents have free access to watch Netflix and play Candy Crush.
That's a pretty uncharitable perspective, no? Giving free internet access to poorer residents will have a lot of impact outside of Candy Crush.
And while it would be great to bring more competition to the NYC market, it would cost a lot more than bringing some wi-fi coverage to various areas of the city.
Low income folks increasingly have smartphones (income <$30K: 50%) and smartphones are largely their only way to access the internet ("smartphone-dependent" - 13% of Americans in households with income <$30K rely on their phones for internet access, as opposed to 1% for those who make >$70K).
Anecdotally, the way many people access the internet on their smartphones is camping out at mcdonalds, starbucks, public libraries, etc. with open wifi. Imagine having to walk to the nearest Mcdonalds to do your online banking.
Competition won't change economic reality. Verizon's average revenue per wire-line user is $125/month (mostly FiOS), and the operating income margin on that is 1-5% in any given quarter. Unless a competitor had fundamentally different economics than Verizon, there's no way it could profitably serve those low-income communities.
The city's approach, direct spending focused on deploying cheaper wireless technologies, is the least distortionary and most cost-efficient way to proceed. Better still would be just giving those poor neighborhoods cash and letting them decide whether to spend it on broadband, or food or clothing.
And in most cases, competition requires a (somewhat) level playing field - a job for government.
If you only rely on the Elon Musks of the world to disrupt entrenched interlocking cartels, you'll end up waiting decades to balance the inefficiencies of that market if you're lucky.
I think you're missing the option that Verizon is just plain terrible. You can both have a monopoly, charge high and still get a low operating income. It tells us nothing about the underlying economics of the problem at hand.
I think it tells you a lot about the underlying economics that an organization that's so successful at making money on wireless can't even eke out a 5% operating margin on wireline.
Verizon has invested about $23 billion on its network, and has 6.6 million FiOS subscribers. That's about $3,500 per subscriber. Chattanooga spent $330 million on its network, to serve 65,000 subscribers, or over $5,000 per subscriber.
To ball-park Google's KC rollout. Estimates are $85 million to wire the neighborhoods, plus $500-600 per house. They've got about 32,000 subscribers,[1] so about $3,250 per subscriber.
[1] Based on the reported 27,000 video customers and using Verizon's 85% ratio of video to broadband customers.
- Reduce taxation on broadband and telecommunications services.
- Reduce the costs and restrictions on cabling neighborhoods
- Cut taxes and regulations on businesses to encourage more start-ups including in poor neighborhoods.
Spending $70 million to give free broadband to 25,000 residences is (expensive) wishful thinking that doesn't encourage job growth or invite new investors into the city. If anything, it will repel investors by sending the message that the city prefers to subsidize the poor and ignore the working class and middle class.
The city could also invite Google Fiber to come and set up shop, and that will drive down prices real fast. Nothing like a little innovation and competition to shake things up, as has been demonstrated in Kansas City, Austin and other areas where Google has either moved in or merely threatened to move in.
"it's debatable whether state tax money should be spent to ensure his constituents have free access to watch Netflix and play Candy Crush."
I'm sorry, but it sounds like you have absolutely no idea what you're talking about. Seriosuly, do you have any evidence to support the idea that the only reason poor people use the internet is "to watch Netflix and play Candy Crush"? Or if not the only reason, then at least the only reason significant enough to be worth mentioning?
Or is a more likely scenario that poor people use the internet for everything from saving money by getting better deals, discovering new opportunities for work and community involvement, finding ways to educate themselves, and yes, entertaining themselves? You know, like actual human beings?
I mean, if you know what you're saying is true—or if you at least have enough information to make this "debatable"—fine. But do you? Or are you simply expressing an unfounded, unhelpful, and deeply prejudiced bias?
I'm not saying the only reason poor people use the internet is to watch Netflix and Candy Crush. I am claiming that most of the bandwidth consumed online is likely to be utilized watching online video. Sandvine published a report a while back showing that Netflix uses "34.89% of downstream and 9.4% of upstream bandwidth during peak periods on US fixed lines". Between Netflix and YouTube, some stats show those two services consume about half the total broadband bandwidth. So I think it's reasonable to assume that online video is likely to consume a large portion of the bandwidth provided by this service.
As for your last question, given the financial constraints the city faces, I'd prefer they allocate their budget towards ensuring schools have the resources they need (including internet access) for the classroom. Internet at home for everyone is a great goal, but there's a ton of teachers forced to buy their own basic supplies for their classrooms (think basics like pencils and paper and pens), and given the choice, I'd prefer that every student has the materials they need while they're at a place structured around education. From what I've read, broadband in-school is also pretty lacking.
Video is going to use the more data than, say, search because that's the nature of video. After all, video is more-or-less why broadband exists in the first place.
And more to the point, the extreme variability in the amount of data used by various applications provides a pretty good argument as to why you really shouldn't use an undifferentiated lump-sum sum of bandwidth to rank people's priorities when it comes to internet use.
I mean, I may use more bandwidth watching a two hour movie at the end of the day than I used in every other hour combined. That doesn't tell you anything about the relative value of what I did with the rest of it. And even if video does use more than half of people's bandwidth, that's still an awful lot of other stuff going on.
And as far as connectivity in schools goes, the value of that is truly debatable. There is a growing body of evidence to suggest that academic performance tracks disturbingly closely to household income. In other words, failing schools are just one more symptom of a much larger problem with entrenched poverty. And when it comes to solving that problem, getting access to as many people as possible (as opposed to limiting it to their kids, and only when their kids are in school) seems like a fundamental pre-condition.
In the absence of hugely comprehensive and cash-intensive approaches to schooling in economically devastated areas (e.g., the model developed by Geoffrey Canada), a limited focus on schools that avoids the myriad ways impoverished home life undermines academic study may end up doing more harm than good, in the same way junk food provides a lot of calories without providing much nutrition.
On the other hand, if you make serious headway on the poverty problem, the schools will start to take care of themselves. Indeed, this is exactly what happens in suitably well-off areas. Recognizing that entrenched poverty is the product of structural issues that go way beyond education, dealing with those issues directly seems like the higher priority.
To that end, subsidized access seems like a no-brainer. To the extent that a fully-functioning smartphone with an internet connection is becoming a passport to the modern world, we should be going out of our way to ensure that people who can't afford to buy them on their own are being given what they need. It doesn't have to be an iPhone 6, but it does need a working browser and access to communication apps.
> It's too bad his plan ignores the monopoly TimeWarner has over service to most of his city's customers.
In many buildings in NYC, that's because TimeWarner provides kickbacks[0] to the management company and/or superintendent to be the exclusive provider of television service for the building[1].
It's illegal (AFAIK) but almost completely unenforced.
[0] Usually in the form of free or discounted service (for their personal cable bill).
[1] If I remember correctly, they specifically do it for television and not phone (or Internet) due to regulation around phone service. However, Verizon no longer installs FiOS to a location if they can't provide TV service to that location, so it amounts to the same thing.
21 comments
[ 3.8 ms ] story [ 56.2 ms ] threadI would also be surprised if a city like New York didn't already have a fair amount of dark fiber available.
That last few feet? Dependent on landlords.
The article mentions this is about providing free wi-fi in poor neighborhoods.
It's too bad his plan ignores the monopoly TimeWarner has over service to most of his city's customers. If more competition were introduced beyond the sporadic RCN and Verizon FiOS available to some buildings, it might bring down prices for all. I agree that universal broadband access is a net positive - but when the only innovation being introduced is a subsidy it's debatable whether state tax money should be spent to ensure his constituents have free access to watch Netflix and play Candy Crush.
That's a pretty uncharitable perspective, no? Giving free internet access to poorer residents will have a lot of impact outside of Candy Crush.
And while it would be great to bring more competition to the NYC market, it would cost a lot more than bringing some wi-fi coverage to various areas of the city.
What's fantastic about this is the open wifi in low income neighborhoods. If you look at Pew stats: http://www.pewinternet.org/2015/04/01/us-smartphone-use-in-2...
Low income folks increasingly have smartphones (income <$30K: 50%) and smartphones are largely their only way to access the internet ("smartphone-dependent" - 13% of Americans in households with income <$30K rely on their phones for internet access, as opposed to 1% for those who make >$70K).
My team's research shows that low income folks largely use the internet largely the same way higher income folks do: banking, shopping, research, and yes, gaming. http://labs.robinhood.org/mobile-tech-impact-potential/
Anecdotally, the way many people access the internet on their smartphones is camping out at mcdonalds, starbucks, public libraries, etc. with open wifi. Imagine having to walk to the nearest Mcdonalds to do your online banking.
These wireless corridors will be transformative.
The city's approach, direct spending focused on deploying cheaper wireless technologies, is the least distortionary and most cost-efficient way to proceed. Better still would be just giving those poor neighborhoods cash and letting them decide whether to spend it on broadband, or food or clothing.
If you only rely on the Elon Musks of the world to disrupt entrenched interlocking cartels, you'll end up waiting decades to balance the inefficiencies of that market if you're lucky.
Verizon has invested about $23 billion on its network, and has 6.6 million FiOS subscribers. That's about $3,500 per subscriber. Chattanooga spent $330 million on its network, to serve 65,000 subscribers, or over $5,000 per subscriber.
To ball-park Google's KC rollout. Estimates are $85 million to wire the neighborhoods, plus $500-600 per house. They've got about 32,000 subscribers,[1] so about $3,250 per subscriber.
[1] Based on the reported 27,000 video customers and using Verizon's 85% ratio of video to broadband customers.
How would you suggest that happen outside of something like this?
- Reduce the costs and restrictions on cabling neighborhoods
- Cut taxes and regulations on businesses to encourage more start-ups including in poor neighborhoods.
Spending $70 million to give free broadband to 25,000 residences is (expensive) wishful thinking that doesn't encourage job growth or invite new investors into the city. If anything, it will repel investors by sending the message that the city prefers to subsidize the poor and ignore the working class and middle class.
The city could also invite Google Fiber to come and set up shop, and that will drive down prices real fast. Nothing like a little innovation and competition to shake things up, as has been demonstrated in Kansas City, Austin and other areas where Google has either moved in or merely threatened to move in.
And on what basis do you think that taxation is preventing start-ups from moving into poor neigborhoods?
I'm sorry, but it sounds like you have absolutely no idea what you're talking about. Seriosuly, do you have any evidence to support the idea that the only reason poor people use the internet is "to watch Netflix and play Candy Crush"? Or if not the only reason, then at least the only reason significant enough to be worth mentioning?
Or is a more likely scenario that poor people use the internet for everything from saving money by getting better deals, discovering new opportunities for work and community involvement, finding ways to educate themselves, and yes, entertaining themselves? You know, like actual human beings?
I mean, if you know what you're saying is true—or if you at least have enough information to make this "debatable"—fine. But do you? Or are you simply expressing an unfounded, unhelpful, and deeply prejudiced bias?
As for your last question, given the financial constraints the city faces, I'd prefer they allocate their budget towards ensuring schools have the resources they need (including internet access) for the classroom. Internet at home for everyone is a great goal, but there's a ton of teachers forced to buy their own basic supplies for their classrooms (think basics like pencils and paper and pens), and given the choice, I'd prefer that every student has the materials they need while they're at a place structured around education. From what I've read, broadband in-school is also pretty lacking.
http://commercialobserver.com/2013/08/manhattan-borough-pres...
http://www.theatlantic.com/education/archive/2013/11/more-th...
My comment wasn't intended to be nasty. I'm sorry it came across that way.
And more to the point, the extreme variability in the amount of data used by various applications provides a pretty good argument as to why you really shouldn't use an undifferentiated lump-sum sum of bandwidth to rank people's priorities when it comes to internet use.
I mean, I may use more bandwidth watching a two hour movie at the end of the day than I used in every other hour combined. That doesn't tell you anything about the relative value of what I did with the rest of it. And even if video does use more than half of people's bandwidth, that's still an awful lot of other stuff going on.
And as far as connectivity in schools goes, the value of that is truly debatable. There is a growing body of evidence to suggest that academic performance tracks disturbingly closely to household income. In other words, failing schools are just one more symptom of a much larger problem with entrenched poverty. And when it comes to solving that problem, getting access to as many people as possible (as opposed to limiting it to their kids, and only when their kids are in school) seems like a fundamental pre-condition.
In the absence of hugely comprehensive and cash-intensive approaches to schooling in economically devastated areas (e.g., the model developed by Geoffrey Canada), a limited focus on schools that avoids the myriad ways impoverished home life undermines academic study may end up doing more harm than good, in the same way junk food provides a lot of calories without providing much nutrition.
On the other hand, if you make serious headway on the poverty problem, the schools will start to take care of themselves. Indeed, this is exactly what happens in suitably well-off areas. Recognizing that entrenched poverty is the product of structural issues that go way beyond education, dealing with those issues directly seems like the higher priority.
To that end, subsidized access seems like a no-brainer. To the extent that a fully-functioning smartphone with an internet connection is becoming a passport to the modern world, we should be going out of our way to ensure that people who can't afford to buy them on their own are being given what they need. It doesn't have to be an iPhone 6, but it does need a working browser and access to communication apps.
In many buildings in NYC, that's because TimeWarner provides kickbacks[0] to the management company and/or superintendent to be the exclusive provider of television service for the building[1].
It's illegal (AFAIK) but almost completely unenforced.
[0] Usually in the form of free or discounted service (for their personal cable bill).
[1] If I remember correctly, they specifically do it for television and not phone (or Internet) due to regulation around phone service. However, Verizon no longer installs FiOS to a location if they can't provide TV service to that location, so it amounts to the same thing.