The Last Mile: Streaming’s Bottleneck

Laying Cable
To solve the last-mile bottleneck and take consumer Internet access speeds to the next level, fiber optic cable needs to be installed to or near the majority of homes in the United States, ultrabroadband proponents say. But even the technology’s most avid supporters acknowledge that trying to do so is a logistical nightmare. Simply getting permission to dig the trenches necessary to put the cable in the ground may prove an impossible task, especially in established and/or urban neighborhoods, which is why most homes with a fiber optic connection are new builds.

Verizon has begun a cable-laying campaign in Texas and is currently offering up to 30Mbps service. According to Hayes, Verizon’s current plans call for reaching 500,000 to a million homes by the end of the first year. Verizon’s president has made known his intentions to roll out fiber optic connections to every home and business in its 29-state territory over the next 10-15 years.

But Hayes isn’t sure if a mad dash to lay cable is the best way for telecommunications companies to try and catch up with cable providers, who have built an impressive lead over DSL in bringing broadband to the home. He believes that they need to change their state of mind. "The telcos were the railroad companies of the 21st century," says Hayes. Some of what led to the demise of the railroad companies, he argues, was their obsession with laying track, rather than focusing on the idea that they were transportation companies. "Telcos have the same problem; they focus on their infrastructure," says Hayes. "To be in the world market 20 years from now, they have to understand communications."

That said, recent FCC rulings could encourage this emphasis on infrastructure. The Telecommunications Act of 1996 forced companies that owned copper telephone cables to provide access to their lines at discounted rates to competing companies. This led to a marked increase in telephone services competition, eventually resulting in lower prices for consumers. In a recent review of this legislation, the FCC decided that companies that lay fiber optic cable will not be required to give access to other firms that want to offer services on their fiber optic networks.

The FCC’s justification for this relies on the perception that the growing variety of broadband solutions will provide sufficient competition to fiber optics. What it doesn’t account for is the quantum leap in speed that fiber optics represent, arguably, and how that bandwidth could become the foundation for lucrative media distribution networks that may not be possible via slower connections. This ruling could conceivably create a series of local monopolies, especially if, as Hayes claims, "whoever puts fiber to the home first will be the last."