Spokane Journal of Business

The ‘last mile’ here may be long

Economics said getting in the way of bringing broadband Internet, fiber to individual buildings and homes

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They call it the last milethat stretch between the high-speed data lines you hear so much about and the individual buildings and homes that so far lie outside of their reach.

Its lure is great: lightning-fast Internet access for the masses and the promise that homes and small businesses eventually could get their Internet, telephone, cable TV, and whatever else that can be dreamt up and put into digital form all over a single pair of fiber strandsperhaps even billed on a single monthly statement.

The reality, however, is that so far, even the most basic benefit of such technologyhigh-speed Internet access carried on copper digital subscriber lines (DSL) or coaxial TV cablehasnt reached the majority of residents and small businesses here. As for the potential of bringing fiber-optic lines and their huge bandwidth capabilities to every home and building here, well, dont hold your breath, telecommunications industry sources say.

It all comes down to true market demand and bottom-line economics, they say.

From a business standpoint, were very happy to invest in last-mile technologyto business parks and office parksbut there has to be a return on our investment, says Greg Green, president and CEO of Spokane-based Avista Communications, which provides data and voice communications in about 20 markets. But for the residential market, Green warns that consumers need to ask themselves, Do I really need it and am I willing to pay for it?

Green and others say that despite the potential that fiber-optic cabling would bring if connected to every home and office, its doubtful that consumers, at least in the near term, would be willing to pay enough for such technology to enable providers to install. And todays tight capital markets wont fund expansions that dont pencil out into profits.

I really admire the technology, but the financial markets are closed, Green says.

Yet investing in more DSL and broadband cable as an alternative to the big jump into fiber is shortsighted, asserts Spokane high-technology guru Bernard Daines.

Daines, whose latest high-tech venture, Spokane-based World Wide Packets, has developed equipment needed to connect homes and offices to fiber-optic networks via whats called gigabit Ethernet, believes that DSL and broadband cable, though capable of offering much higher data-transmission speeds than standard telephone technology, dont provide anywhere near enough bandwidth to carry the breadth of services needed to make the systems profitable in the long run.

Daines envisions significant demand for high-speed digital telecommunications services once consumers really understand how powerful these services will be. For instance, they could include the ability to be educated at home with teleconferencing-like technology, to telecommute with the computer networking speeds people are accustomed to at the office, or even to choose to watch a favorite TV re-run, on demand, from a database of thousands of episodes stored on a computer network somewhere.

DSL doesnt have the bandwidth for those types of services, he says, adding that fiber could provide 1,000 megabits-per-second bandwidth to every home.

Thats far more capacity than the 1 megabit to 3 megabits per second available through broadband cable, or the 256 kilobits to 7 megabits offered through DSL (bandwidths vary depending on user location and pricing plans). Most conventional telephone modems today transmit data at just 56 kilobits per second.

Providers of DSL and broadband cable, however, say their technologies offer more than enough bandwidth to meet current consumer demand, and that it only makes sense to utilize the miles and miles of copper telephone lines and cable-TV lines already in place.

Neither AT&T Broadband, which offers high-speed Internet access over its cable-TV lines, nor Qwest Communications, which offers DSL over its copper telephone lines here, will discuss exactly which neighborhoods and business districts in the Spokane area currently have access to those technologies. Both, though, say that they are continuing to extend their systems here.

AT&T Broadband estimates that about 45 percent of its service area here, which includes all of the city of Spokane and parts of unincorporated Spokane County, currently has access to its broadband cable service, says AT&T spokesman Steve Kipp. We hope to have the rest of the service area, or at least the vast majority, complete within two years, he says.

Thats being accomplished by extending AT&Ts fiber-optic lines to more parts of town, where hubs and neighborhood nodes distribute the digital signals via coaxial cable the rest of the way to homes and businesses. Kipp declines to disclose how many broadband Internet customers AT&T has here.

Qwest, meanwhile, wont divulge what percentage of Spokane is DSL-capable, but says that in Washington state communities where it has deployed DSL, an average of 45 percent of its customers currently are eligible to hook up to it. So far, Spokane is the only community in Eastern Washington to get DSL, which became available here in 1998.

Theres a goal to cover as many people as possible, says Steve Bartholet, a director of product marketing at Qwest. But, The technology isnt perfect, and my crystal ball is a little cloudy right now to determine what advances will be coming.

Availability of good technology, he says, is more of a barrier to extending DSL farther into communities than is the cost of such expansions. As the equipment needed for DSL at switching offices becomes more advanced, DSLs reach into neighborhoods improves, he says.

Whats nice about DSL is that everyone has a phone line, Bartholet says. Why not take advantage of that?

As for whether DSL will end up being a poor stepsister to the types of fiber-optic connections that Daines envisions, Bartholet predicts that instead it will become a component in a mixture of mediums used to bring broadband to the masses. Beyond that, he says, its a matter of whether the market is willing to support new technologies.

I wont deny that if you want all those services (described by Daines), that youll need additional bandwidth, he says. As a business, though, you have to step back and say, can we make money doing that.

Avista Communications Green, who has played an entrepreneurial role in several telecommunications-related businesses here, says that its conceivable that Avista eventually would be involved in taking fiber farther into neighborhoods to connect the final mile for the masses. He reiterates, however, that the market would have to make such an aggressive venture profitable.

That hesitancy, acknowledges Daines, is the mood right now. But he argues that the high-tech companies, municipalities, or public utility districts that take the initiative to be the first in with fiber to all users will be in a powerful position in the future.

Thats whats happening in Central Washington, where the Grant County Public Utility District is in the process of installing fiber to homes and offices throughout the county and is testing World Wide Packets equipment as a vehicle to bring broadband services to residents there.

With such a high-tech infrastructure in Spokane, he asserts, you would start to provide an economic opportunity base to bring businesses in.

We have the potential of being better (at using such technology here), but we havent capitalized on that, Daines says.

  • Paul Read

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