On Internet

The idea I’ve been thinking about the most recently is accessibility to high speed internet. The UN a few years ago declared internet access to be a fundamental human right and I can’t agree with them more. Internet access is an equalizer on the same scale as the printing press and government sponsored public education.. The World Wide Web levels the playing field more than any technology that has been developed in my life time.

The striking question that seems to be facing many places is basic access to this service. In the United States, internet access is dominated by a relatively small number of service providers (ISPs). There is little challenging the current status quo of large ISPs. This is mostly due to major barriers to entry, such as infrastructure cost and upkeep. These barriers to entry leave these goliath-like oligarchs on a mantle where they can’t be challenged.

I wanted to look at what kind of challenges to existing providers exist, since I know they have been limited. Bringing internet access to low income areas and rural communities could be a game changer. While this has implications for promoting economic growth around the world, I plan to examine how this might impact Pittsburgh, while also looking at existing models where ISP giants are being effectively challenged.

The most obvious example of a disruption to the traditional ISP model has been the implementation of Google Fiber. Using advanced fiber-optic cable, Google has installed Gigabit Internet access as well as High Definition television service into the homes of people in select cities. Cities across the United States made bids to become Google Fiber cities, but only a select group have been chosen.

The reason behind Google’s expansion to serving as an ISP isn’t entirely clear. Brand recognition for this service is beneficial, but there are massive costs related to installation and upkeep of this service. Google benefits, because they provide a competitor to existing ISPs to improve their service. When other ISPs improve their service, Google also stands to benefit, since it allows users to access Google’s services more quickly. Having its own ISP may allow Google to maintain greater control over data about subscribers in given areas, especially in growing markets like Research Triangle (Greater Raleigh-Durham, NC) and Austin, TX.

While what Google is doing is great, the disruptive effects they will have will be felt mainly in areas where they expand their fiber services. Virtual monopolies by single providers haven’t faced a force that would push down prices in most areas, but it seems that this may change. Some communities in North America are solving the problem on a small scale by creating ISP cooperatives. Rather than buy internet service from Time Warner, Comcast, or AT&T, these communities are banding together to own and operate an ISP.

I’ve started thinking more about what would actually lead to consumers going to a new ISP and why they choose someone like Comcast or AT&T. I think the lack of familiarity with other options hurts. Name recognition is the name of the game in being an ISP. Having the actual infrastructure in place is key and a major barrier to entry as I described before. Creating a critical mass of members that can pay for the services and keep fees down is also key.

As the semester goes on, I’d like to revisit this and get a better understanding of what it actually would cost to bring a co-op Internet ISP to Pittsburgh. I will explore more closely existing models in the United States and Canada and consider how installation, implementation, marketing, and sales of such a service could impact the local economy. I’d like to explore closely who my potential partners could be in this and how beyond providing Internet service we can impact the economy of Western Pennsylvania’s economy. I invite you to consider a future with the PGH Fiber Co-Op.

2 thoughts on “On Internet

  1. Ross – its an interesting concept and worth digging into a little bit more…if only because it will put you into a network of like minded people.

    It is inevitable that such a system will come into play…the questions is always going to be when? and …. Who has the $$$ to build a robust system?

    Dan

  2. Most smaller ISPs still buy capacity from the major providers, Google being a notable exception. A lot hinges on how the FCC regulates providers; cable and phone are regulated very differently.

    As long as an oligopoly exists at the provision level, and as long as the FCC doesn’t force common carrier rules on them, that oligopoly will look after its interests at the end-user level.

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