Study Proposes Ownership Model for Home Internet Connectivity

CBC asks “Could consumers own their internet connections?”. With the recent CRTC ruling in favour of Bell’s Internet throttling, there’s valid concern over dependence on only a few providers for Internet service. A study out of Columbia Law School suggests that net neutrality could best be achieved customer ownership of their own connections.

The “last mile” of infrastructure has been a constant hurdle for Internet service providers. It is to say, how to you cost-effectively run a connection from exchange buildings to people’s homes. The difficulty of connecting the last mile is what has kept broadband service limited to the two wires that most people already have running into their homes: telephone and cable television. The next generational leap in home broadband would be fibre optic cable running to the home, but ISPs have been reluctant to move to fibre given the huge infrastructure investment required.

The study proposes a model it calls “homes with tails”, wherein homeowners would pay for, and then own, that last mile of connection. This could lead to cost savings as last mile infrastructure is one of the biggest costs of ISPs, and increase home equity. This would also open broadband service to providers other than the traditional phone and cable companies.

This model is being testing under a pilot project in Ottawa. The cost of the connection is amortized over five years, added to the customer’s electricity bill. Total cost works out to $1000-$1500. Bill St. Arnaud, chief researcher in charge of the pilot, estimates that the true cost of home broadband service is between $2-$15 a month, on the $40+ bill that most pay. St. Arnaud goes on to say that one of the biggest hurdles is getting service providers onboard:

Despite already having strung fibre, mostly from streetside poles, to about 400 households, the project has been unable to find an exchange-based service provider willing to connect customers and go up against Bell and Rogers.

“The retail internet business in Canada has been destroyed. All you’ve got left in Ontario is Bell and Rogers,” he says. “Nobody wants to make that kind of investment.”

One possible solution lays in convincing a big internet service provider from one region to expand into another. Vancouver-based Telus Corp., for example, could get into the business of selling fibre connections in Ontario, where it has no residential internet customers. The problem there for Telus, however, would be the threat of repercussions from Bell or Rogers.

“Their concern is that they’ll come back and invade them on their own territory,” St. Arnaud says. “They like the idea in somebody else’s territory, but not their own.”

Comments on the article were filled with people asking “Where do I sign up?” Nowhere yet, unfortunately, but given increasing dependence on Internet connectivity and greater demands being put on a small number of providers, its time may come soon.