Net Neutrality and Utopia

(Cross-posted at Ezra Klein's.)

Lest anyone think otherwise, net neutrality is a real concern. Here in Canada, Shaw (a cable provider) is charging people who use a VOIP client other than Shaw's own a $10 fee.

So what do we do if/when we lose this fight? To find the answer, we have to travel to Utah, of all places.

Spectrum, the magazine of the IEEE, has an excellent article about a publicly-owned fiber-optic network in the Wasatch Valley: The Utah Telecommunication Open Infrastructure Agency, or UTOPIA. (Pause to admire the cute naming scheme.)

There's been a lot written about the value of municipal wireless networks - see here - but its important to point out that the policy and economic rationale for wired networks is at least as strong, if not more so. Lawrence Lessig has described the case for municipal fiber networks thusly:

The point is obvious when you think about corporations. Boeing, for example, has installed a massive AFN on its campuses. That AFN enables the company to offer itself extraordinary network capacity at extremely low cost. Technically, Boeing is the monopoly provider of network services to Boeing. But as McAdams nicely puts it (so nicely that we might call this the McAdams theorem), you don't monopolize yourself.

The principle that applies to Boeing, applies to Chicago, or Washington, or to Utah. Hence the Spectrum article. The condensed version is that the state legislature banned cities from offering their own Internet service, but didn't ban them from operating a wholesale network. So 13 Utah cities were allowed to build their own fiber-optic network, but private companies provide the actual Internet, TV, and phone service.

The funny thing is, while this makes a good political compromise, its not a compromise from the point of view of the network: A neutral operator maintains the fiber grid, but private operators compete for the market, keeping prices low for consumers without threatening the users with nasty surprises, a la Shaw above.

It also turns out that building this network is cheap, or at least cheaper than you'd think. You wouldn't know it from the way the big telcos have dragged their feet, but laying fiber optic cable right to the home isn't too hard. The article quotes a lower price for the bargain Internet-only package than local cable or DSL, while offering 5x faster bandwidth. The trick is that the participating city governments offer 20-year bonds, paid by the fees raised from the network. They claim they don't spend any tax dollars to lay the fiber.

And once you've laid the fiber-optic cable, the hard part is done. UTOPIA delivers 100mbps already, with the potential to upgrade to 1gbps in the future, and even potentially even to the 10gbps Ethernet standard. Upgrading the ends of the network is relatively cheap, if you build it right.

The policy implications are clear: it's the telephone and cable companies' monopoly over the last mile to the home that has allowed them to subvert net neutrality in the first place. Building a third network - owned by the public - gives citizens a real choice. On top of that, the fiber network will hopefully be so appealing, even for the big telcos, that they'll want to offer their services over the fiber. Municipal networks can make access to the fiber networks conditional on strict neutrality.

Of all the places where we'd find a potential solution to the oligopoly of the ISP market, I can honestly say I'd never have thought of Utah. It is, after all, one of the few states where Bush still has a positive approval rating. Who'd think they'd support socialized Internet?