Residents "own" last-mile in Canadian broadband trial

400 Canadian houses are being wired with optical fiber, and homeowners own connection to access point outright.

You've got to hand it to the Canadians. Not only do they come up with great hockey, outstanding comedians and my friend Dave Keck (an up-and-coming science fiction writer) they've also generated one of the most innovative ideas ever for last-mile connectivity.

In an experiment led by Bill St.Arnaud, researcher at Canarie, a Canadian government-funded institution, 400 houses are being wired with optical fiber -- for which the homeowners will pay an estimated $2,700. The fiber connects up to the nearest network access point, and homeowners own it outright -- meaning they can resell it with their homes, or lease out capacity to their neighbors. (Read about it here.)

Here's why this is a great idea. First, as I've mentioned more than once -- carriers don't actually make a profit on the last mile, which is why investment in last-mile infrastructure lags behind demand. (Why would carriers rush to invest in technology they can't make a profit on?) That leaves precious few choices for building out the last mile, all of them (until now) bad ones.

Asking homeowners to foot the bill directly ensures that bandwidth is paid for by the folks who truly value it -- the ones who plan on using it. In fact, in many respects homeowners are already voting with their dollars: Many (including me) will only consider moving to locations served by top-tier connectivity. Both my parents and I used "broadband connectivity" as a major selection for houses we purchased within the past few years.

But that's not the only reason this is a great idea. Positioning last-mile connectivity as merely another housing amenity opens up all sorts of interesting scenarios. For example, homeowners could bundle the fiber infrastructure into their mortgages -- thus making that US$2,700 as affordable as possible. And it solves the problem of universal broadband services -- because if last-mile connectivity is considered as essential as, say, electricity, then existing housing subsidies can ensure that even folks with limited resources will have access. Whatever mechanisms provide these people with housing and utility services today can simply be extended to help them purchase (or lease) broadband access.

Yet another advantage: It makes the "net neutrality" issue moot. Since the fiber is owned by the homeowner, there's no risk of censorship at the last mile. And since the connection is broadband, quality of service becomes less of an issue.

Finally, this approach neatly segments Internet infrastructure and services. Users purchase a pipe into the cloud -- not a connection into any particular backbone network or set of services. Therefore, content providers can continue to innovate without fear that users and customers will be unable to access their content. Carriers can, if they wish, focus on building out last-mile infrastructure, confident their investments will be paid for. Or they can focus on backbone services, and let local municipalities handle the actual fiber installation. Either way, they can charge for connectivity to their routers at the network access points -- thus ensuring a continued revenue stream to support upgrades.

The bottom line: Buying your own fiber may be the best bargain yet.

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