Gigabit Internet access grows out of its niche

Gigabit Internet access grows out of its niche

Now, with a critical mass of customers and ISPs, the gigabit Internet community seeks the killer app.

Gigabit Internet transit costs.

Gigabit Internet transit costs.

Google Fiber launched in Kansas City in 2011. It offered gigabit speed at $70 per month and ignited the development of an ultrafast Internet access category that has since spread throughout the U.S. According to Michael Render, principal analyst at market researcher RVA LLC, 83 Internet access providers have joined Google to offer gigabit Internet access service (all priced in the $50-$150 per month range).

Render's data shows that new subscribers are signing up at an annualized growth rate of 480 percent each year. Between the third quarter of 2014 and the second quarter of 2015 gigabit, subscribers grew from 40,000-174,000.

With download speeds 40 times faster and upload speeds more than 300 times faster than the Federal Communications Commission's broadband standard, gigabit Internet sounds both revolutionary and using current ISP pricing models downright unaffordable. But gigabit Internet quietly evolved and competition drove prices down, such as Comcast's commitment to deliver 2 Gbps internet access in Atlanta and Time Warner committing to 1 Gbps service in Charlotte, both in response to Google Fiber and other gigabit competitors.

[Related: Cox brings gigabit Internet to additional cities, with more planned for summer]

Just a decade ago, fiber to the home (FTTH) was an exclusive realm of big telecom companies. At that time, Verizon proved that a large Internet access network with fiber optic infrastructure serving millions of subscribers was possible. Thanks to the reduction in the cost and complexity of building and operating a gigabit Internet access network, today smaller organizations like municipal power utilities and real estate developers have become gigabit ISPs.

Fiber optic cable passes 25 million American homes, according to Render, with 11.6 million FTTH connected homes as of the second quarter of this year. And hooking up the remainder of the 25 million homes passed doesn't require a network upgrade because most of this ISP infrastructure equipment connecting the existing FTTH customers was designed as a gigabit-capable passive optical network (GPON).

Living in a material world

The total cost of installed gigabit and faster fiber optic cable infrastructure has dropped 80 percent during the last decade, as manufacturers have redesigned the fiber optic cable products to optimize for low-cost, large scale deployments. Optical cable has become much more flexible, so it can be run inside homes and buildings, joining the customer's network with much lower-cost optical terminals.

Cable splicing and connection that required specialist a decade ago can now be performed by a craftsperson using inexpensive equipment. Fiber runs further into buildings where lower-speed copper cable was once used for its flexibility. The newest indoor fiber optic cables can be bent around corners and are so small they can be glued into place and are virtually invisible.

The relentless decline of Internet transit costs, as seen in the above charts from Bill Norton's DrPeering website, has also reduced the cost for ISPs to provide the greater bandwidth demands of gigabit customers without increasing costs.

Gigabit Internet access was constrained by slow Wi-Fi routers that couldn't keep-up until 802.11ac W-iFi devices shipped in 2012 and became commoditized with Broadcom's 802.11ac chipset late last year. With more channels, 802.11ac routers can serve more users at a multiple of the previous Wi-Fi standard 802.11n speeds and 20 times faster than 802.11g the standard just two generations ago.

At its current stage, gigabit Internet access isn't much different than the early iPhone. Both are platforms launched with a few apps to give context to potential use cases. Like the iPhone that debuted before 3G data service was fully built-out and interaction with others was limited because so few people owned an iPhone at the time the full context of gigabit Internet applications won't be fully understood until more homes and businesses are connected to it and more apps are created.

US Ignite a nonprofit sponsored by both the U.S. government and such industry partners as Juniper, Cisco, Verizon, Google, Comcast, and others facilitates gigabit platform development by matching developers and researchers with city test beds to demonstrate and promote gigabit application. US Ignite also curates gigabit applications and has plans to open an app store.

John George, director of solutions and professional services at OFC Optics outlines the types of applications that'll attract consumers and businesses, with, you guessed it, a predilection to video. "Consumers will first see the difference in gigabit Internet with ultra-high definition video streaming and vivid tele-presence applications," says George. Especially since the low-speed connections to remote and home offices have left most people out of the high-quality video game. "Enterprises will take notice of video tele-presence too. Gigabit Internet will include remote workers with large screen as-if-you-are-there video quality," George says. He also points to education and remote control as areas rife for important applications, but notes that "it's too early to predict all the applications that will be catalyzed by gigabit Internet until developers and researchers have had some time to work with it."

The cloud is only as good as the network

It's important to note that vivid video tele-presence isn't video conferencing. It borders on virtual reality with a continuous connection that uses large screens and high definition 4K low-latency video to create a real sense of participation. Beyond the benefits of improved communication and reduced travel, gigabit Internet complements enterprise trends in virtualization. The cloud is only as good as the network. Gigabit Internet will enable solutions such as virtual desktop infrastructure and cloud storage that enhance reliability and security.

[Related: Comcast's 2-gigabit service will cost $300 plus $1,000 for installation and activation]

Most of the discussion about gigabit Internet access revolves around applications that use the high definition video and low-latency features of gigabit internet. The example of two musicians performing in harmony half a world apart is an often used to explain how ultrafast symmetric connectivity with ultralow latency is different because at lower speeds harmonizing isn't possible.

A single gigabit Internet "killer app" may not emerge. It may simply be a large set of applications that are enabled by speed and low latency, just like a new set of applications emerged with the move from dial-up to broadband internet access. Distance learning and distance medicine perennial staples of legacy video conferencing applications have gotten a makeover due to these features.

And virtual reality (VR) is experiencing a resurgence. VR creates convincing 3D video imaging that the brain perceives as reality. VR over gigabit Internet could provide a front-row experience at a concert or a Broadway show, or it could give an engineer operating a robot equipped with VR cameras the experience of walking into one of the Fukushima nuclear reactors.

Many factors have coalesced into the perfect gigabit storm. Verizon FiOS proved that FTTH could scale to millions of homes. Google proved that FTTH internet access 40 times faster than the FCC broadband standard could be delivered at a price attractive to consumers. With the latest gigabit technologies that have reduced the cost and complexity of deployment, building out internet access is within the scope of capability of small ISPs that want to compete with large incumbents like Comcast, AT&T and Time Warner by throwing down the gigabit gauntlet.

In the final analysis, if Comcast's 25 Mbps internet costs $50 per month and Verizon FiOS' 75 Mbps $65 per month, why wouldn't the consumer choose Google Fiber gigabit service for $70 per month? The apps that use vivid video, blazing speed and ultralow latency will reset user expectations and drive even more growth.

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