The future is online. In fact, online now, even more so in the future. The COVID-19 pandemic and constant restraint on the “new normal” prove that Internet access is not only vital to life in the 21st century; high-speed access is necessary. Internet access alone is no longer enough; one must have quality access. This will depend on the open access fiber.
Becoming a full participant in the world will ultimately depend on access to gigabit broadband capacity. The capacity will depend on the fiber. For many years, EFF has been researching and advocating for policy changes at the local, state, and federal levels—all with the goal of providing universal optical fiber to everyone in the country. Part of the work requires us to review the mistakes we made in the past, how they led to today’s problems, and how to avoid making the same mistakes in the future.
One of the biggest mistakes is to rely too much on large, publicly traded for-profit companies to provide universal access. For decades, policymakers have provided billions of dollars in subsidies to companies such as AT&T, Comcast, and Verizon to build their networks, with the goal of existing companies serving everyone. These companies have received numerous regulatory incentives designed for large companies, and they are often designed by large companies. Their lobbyists are at the forefront of guiding policy decisions in Congress, state legislatures, and the Federal Communications Commission. In return for preference over the past two decades, more than half of the country still lacks broadband suitable for the 21st century. In the United States, there are still millions of people without services.
A new study funded by EFF explains why this is so and how we can redirect public investment to the broadband infrastructure that connects everyone to the gigabit of the future. In short, the biggest mistake of broadband policy is to subsidize broadband operators, hoping that they can build infrastructure instead of directly focusing on future-oriented infrastructure development. Therefore, when we spend 45 billion U.S. dollars (and continue) to support any service that meets the minimum target of 25/3 Mbps (federal broadband definition), we cannot build long-term infrastructure and waste resources on old copper On-cable, cable and remote wireless solutions. Since Congress may allocate another $45 billion, it is time to rethink how we use these new funds. The focus is not just to provide people with any services, but to provide them with the infrastructure that will sustain us for decades.
A true open access network (also called a wholesale network) is an entity that does not sell broadband services, but provides lines that enable anyone else to sell broadband services and other data applications. In other words, a truly open access network is one of the infrastructure. Then, anyone else can become a broadband service provider based on the existing infrastructure.
These types of entities have existed in the EU for many years, thanks to the regulatory programs that incentivize them. They have been deploying fiber optic infrastructure to EU member states. Optical fiber is their choice because it is a future-oriented transmission medium that can cope with the growth of the Internet in the next few decades without new investment. Therefore, although optical fiber is very costly at first, it will only become more valuable over time. As our research has found, this leads to so-called patient capital investors—investors who are willing to wait the necessary number of years before the investment starts to pay off.
There is no doubt that as the Internet continues to develop and grow, everyone will need more data capacity. A pure infrastructure provider, such as an open access network, will not get rewards from broadband customers. Instead, it will be rewarded by selling access to multiple providers, thereby incentivizing it to build the fastest and most suitable future possible Infrastructure. In addition, it has the incentive to lease the space on its network to many different broadband providers in order to recoup the cost. This will create competition in an area where it is sorely lacking. Many ISPs will now be able to offer plans in new markets, and consumers will be able to choose their favorite plan.
More services that require high-speed broadband will be created in the future. In order to build a network that can meet these needs and make money, infrastructure providers need to be able to provide more and more services without constantly upgrading the content they build. Currently, only optical fiber can do this. It cannot be copied or replaced by other data transmission media, such as cable, wireless, and satellite. Optical fiber has terabits of spectrum capacity, and we have not even invented the hardware that can take full advantage of this capacity.
The United States relied on the wrong entity to build the country’s communications infrastructure, which ultimately resulted in slow, expensive, and unpopular Internet access. Large-scale, privately owned, vertically integrated (with content production, telephone services, alarm systems, wireless services, and streaming media) ISPs have multiple goals in pursuit of profit. Their M&A strategy has resulted in large telecommunications companies accumulating the most debt in the world, forcing them to seek ways to minimize investment. Every minute and a dollar spent on non-broadband services is a dollar and a minute is not spent on upgrading and building infrastructure. In fact, the situation is even worse: under the monopoly of broadband providers, they have guaranteed income for non-broadband services, but there is no incentive to improve broadband. This multi-head hydra approach has a negative impact on their ability to focus on the core elements of broadband access: the launch of the next generation of optical fiber.
These large traditional companies often tell policymakers and the media that financing fiber optic infrastructure is "too expensive" to avoid the truth being revealed, that is, it is too expensive for them. According to our cost model analysis, once the entity only cares about laying data transmission lines, the equation will change dramatically.
The fact is, as long as there is enough patience and long-term investment strategy, universal fiber access is feasible. Providing fiber-optic infrastructure in a wholesale mode means selling capacity to all participants but not selling broadband services, which makes it possible to build large areas in the United States where there are or will be symmetrical gigabit and beyond demand. Compared with the simplified approach of infrastructure-only deployment, and considering all the burdens (and risks) posed by today's vertically integrated ISPs, our cost model shows that infrastructure entities alone can provide fiber optic lines to nearly 80% of customers. Profitable and vertically integrated ISPs can only reach half at most.
In other words, if our broadband policy and subsidy funds revolve around the premise that AT&T and Comcast are the best or only broadband solutions in the world, we would be wrong. This has cost taxpayers a huge price. If our goal is to provide fiber optic connections for everyone, we need to change direction and focus only on entities that provide infrastructure. This will require changes in regulation and public investment goals.
Our model shows that the emphasis on open access infrastructure will bring huge savings to taxpayers by reducing subsidies and extending fiber access to tens of millions of Americans who are trapped in the cable monopoly market. But our research shows that this does not happen on its own.
The Federal Communications Commission (FCC) needs to proactively adopt competition regulations to reduce the risk of infrastructure providers in order to take full advantage of their efficiency. Some examples of what the FCC can do include: determining the location of accessible fiber through broadband mapping, ensuring that open access providers have the same rights as AT&T and Comcast, and adopting rules that prevent cable companies from predatory pricing, which they want to prevent Optical fiber is deployed to maintain its monopoly.
Most of the focus of broadband maps is to determine speed indicators, not the long-term viability of existing infrastructure. Therefore, the speed-limited satellite connection is regarded as an optical fiber line with multi-gigabit potential. The FCC, especially if Congress invests billions of dollars in broadband access, needs to help determine where future-proof capacity is lacking in order to better inform potential investors about fiber optic opportunities.
However, since open access providers are not traditional telecommunications, they need to obtain the right of passage and the right to connect to the poles, and these rights are provided to the second type of public operators. Otherwise, when AT&T denies access to its poles in Texas, they will encounter the same problems as Google Fiber. Finally, many attractive long-term investment markets will become cable TV monopolies. However, if cable companies are allowed to prevent future competition by predatory pricing on broadband access, this will effectively undermine the long-term optical fiber investment model. In other words, the FCC must establish rules that prohibit cable companies from cross-subsidizing their monopoly market and future competitive markets and require the same pricing. If they provide low-cost high-speed broadband to one market, they must provide this service to all markets in their territory. But all these proposed policies depend on the FCC's restoration of its authority over broadband operators and reversing the deregulation caused by the restoration of Internet freedom.