I think there's a simple solution - municipal fiber everywhere with companies allowed to lease access. Internet access looks like a utility and quacks like a utility, so it should be treated like one. The timeline for breaking even on the investment has been pretty reasonably short in the examples I've seen.

The municipalities have no money to build, and more importantly, to maintain and continually upgrade, such networks. Heck, they can barely maintain utility systems that evolve far slower than internet connectivity: power and water. See: http://www.nytimes.com/2009/04/18/us/18water.html?_r=0. People outside of HN won't be anywhere near sufficiently eager to earmark sufficient public dollars to properly maintain such networks, not when pensions systems are underfunded and schools are putting teachers on furlough.

I don't know enough about fiber to have a very intelligent discussion about it, but from what I've heard, one of the nice things about fiber is that you can run increasing amounts of bandwidth through the same fiber once it's laid as the endpoints improve.

I would expect that the buildout could be funded by a municipal bond issue, with the repayment being handled via the revenue from the customer-facing companies that lease access to the infrastructure. I've heard of municipal networks like this being run profitably and being repaid in a reasonable timeframe (on the order of a decade or two), but unfortunately I don't know more than that.

I think the point is: local governments can barely pay for essential services (water, power) that most everyone in their district needs. High speed fibre that a small subset of their constituents would use is way down on the list.

I think you're right that that was his point. It wouldn't necessarily come out of their budgets, though, it could be done with debt financing on the project itself, repaid purely from the revenues from leasing access to the network to the customer facing ISPs.

I also don't think it would necessarily be used by a small subset of the constituents - it seems as though it could potentially be much cheaper than alternative high-speed arrangements, since the customer facing companies would actually have some competition. Once the initial construction debt was paid down, the govt. could likely reduce the access lease cost, which would be passed on by the competitive ISPs, further enabling access by poorer residents.

I think it would be great for the long-term economic prospects of those areas as it broadens access and makes heavy uses like remote work more viable.

Plus, a good internet connection is a much cheaper form of entertainment than many of the alternatives, including cable, so it could actually save many people money.

Large capital expenditures undertaken by municipalities are usually funded by bonds.

A municipality would issue bonds to fund the replacement of their water mains, which are breaking and pouring water into the streets every winter. It would issue bonds to renovate their elementary school, which has a leaking roof, asbestos insulation everywhere, and drinking fountains that dispense leaded water.

Municipalities have limited borrowing power, so muni fiber does have to compete against all those other priorities. And it's been a tough market for muni bonds lately.

What's more, muni fiber would be considered a non-essential revenue bond. These types of bonds carry higher interest rates than essential services bonds, or general obligation bonds.

Ah great, thanks for the concrete info!

I imagine that a fiber rollout would create entirely new revenue, though, where upgrading water mains and other existing infrastructure wouldn't, so it might be viewed by the govt as offsetting any difference in interest rates?

Well, it's pretty common for municipal power companies to return a profit to the city, which is then used to offset property taxes. In fact, a number of successful muni fiber projects have been managed by the municipal power company, or the municipal cable provider.

The problem is that a lot of municipalities aren't run all that well. Local politics can sometimes be very ugly. Muni fiber only really works when the municipal government works. Sadly, that's not as common as it ought to be.

Hm, that is a shame. I wonder if there's a way for technology to help change that. Maybe by offering a graphical budget breakdown of spending that the public can browse? I remember seeing something like that for the federal government, and it was pretty eye opening. I guess there's no incentive for a terribly run government to roll that out, though.

Yep, it'll never happen.

Except where it did before the State stepped in to ensure Comcast/TWC didn't have competition.

But other than that it'll never happen.

Many other countries have built high speed consumer fiber networks, some of them heavily regulated. Something isn't working in the United States.

The U.S. is ranked #8 in average broadband connection speed in Akamai's most recent State of the Internet. That puts it ahead of most of Europe: http://www.akamai.com/dl/documents/akamai_soti_q213.pdf?WT.m... (page 13). If you look at more densely populated coastal states, the U.S. looks even better. Yeah, South Korea has widespread fiber internet. More than half the country lives in the Seoul metro area. You can't compare.

Nation-wide averages tell a story that no one is interested in. Do you have data on densely populated coastal states? I want to compare speed and speed/Mbps to areas like Warsaw and Stockholm with high density cities in the US.

The problem with drilling deeper is that America is organized quite differently than European countries. It is typical for a European city like Stockholm or London for 40-60% of the people in a metro area to live in the denser, core city. In the U.S., that number is more typically 10-20%. Moreover, because of historical reasons, the dense inner cities in the U.S. that are most geographically amenable to building out fiber have huge proportions of poor people who couldn't afford it. Middle class people who might buy fiber are disproportionately more likely to live out in suburban areas less suitable for building such infrastructure.

Very concrete example: Delaware is one of the fastest states in the U.S., with average connection speeds in Akamai's study comparable to the top 5 countries in the global list. I live in the largest city in the state, a major rail hub, in the heart of downtown, and can't get fast internet because the area is so poor. But the suburbs right around us have fiber.

Per-city breakouts aren't in Akamai's most recent report, but here's one for Q4 '11: http://tumblr.thefjp.org/post/22270191498/the-worlds-fastest.... The fastest city in Sweden at 11.3 mbps wasn't that dramatically faster than the fastest in the U.S. at 8.4 mbps. Asia of course dominates, but that's because Japan and Korea have tons of very densely-built cities.

Hey thanks for the link.

I would love to test all your hypotheses, I'm skeptical. My impression is that, even if you compare dense high-income areas (Manhattan, SFBay), many other countries are still coming out on top. For instance, Warsaw (!) metro area: 631.4/km2, Manhattan: 27,227.1/km2. I don't have the numbers but income is much higher in Manhattan.

Wikipedia tells me I can get 60mbit/s down for under 25 USD in Warsaw and I think that is uncapped. I don't believe any comparable deal exists for Manhattan. SFBay is similar.