Ottawa tries DIY FTTP

Ottawa, Canada may be the new model for breaking the last mile bottleneck. We’ve heard endlessly about how the telcos who were paid to run fiber to every home by the year 2000 just can’t manage it because it will cost too much. It may be time to take the matter into our own hands.

This may all sound rather abstract, but a trial experiment in Ottawa, Canada is trying out the consumer-owned model for a downtown neighborhood of about 400 homes. A specialized construction company is already rolling out fiber to every home, and it will recoup its investment from individual homeowners who will pay to own fiber strands outright, as well as to maintain the fiber over time. The fiber terminates at a service provider neutral facility, meaning that any ISP can pay a fee to put its networking equipment there and offer to provide users with Internet access. Notably, the project is entirely privately funded. (Although some schools and government departments are lined up to buy their own strands of fiber, just like homeowners.)

The main challenges with this model are economic, rather than technical. Most importantly, ownership has to be made appealing and affordable to consumers. The construction company is using conservative estimates that only 10% of homeowners will sign up and there will be a per-customer cost of $2700. If you assume 50% take-up, then the per-customer cost drops to $1100. Both figures might seem like a lot, but people pay for a variety of improvements to their home — like remodeled kitchens, or a deck — that also cost large sums. (Google)

Here’s what I find most interesting: On the scale of 400 potential connections, deployment cost is $1100 per at a 50% take rate. I’d be willing to bet AT&T has just about that level of investment in deploying Uverse.  Simple math shows that even with the outrageous overhead the telcos carry, they’ll fully recapture a similar investment in less than 5 years even at this tiny scale. Bottom line. We’ve been had by the telcos and a government that has insured their monopoly status. They are not interested in improving service.

I think it’s time for all of us to work locally and build our own. The little 400 home project in Ottawa could be the beginning of a new revolution.