Sacramento Internet is actually really slow

Gina Lujan remembers a time when she racked up a cellphone bill of as much as $2,000 a month. Now, with more competition, of course, most people can pay around $60 for unlimited services.

Lujan, a co-founder of Hacker Lab, a tech co-working space in Midtown, thinks high-speed Internet will have the same fate.

“Before, the Internet was viewed as a luxury,” she said. “Now, it’s part of our infrastructure, it’s part of how we live.”

Currently, when you get online, you’re probably connecting to a DSL or other copper cable that was laid down years ago by telecommunications companies. But copper can only handle so much data.

“The longer a signal travels on copper, the more the bandwidth degrades and the less data that is available,” said a report by the city of Davis this past April. The city put out a call for partners to help revamp its Internet-service infrastructure.

Fiber-optic cables are the much faster alternative to copper. It’s a trend that is taking off across the country. Davis, which said in its report that roughly 100 communities already have hitched onto the fiber-optic bandwagon, wants to join. And so does Sacramento.

Mayor Kevin Johnson injected a major boost into local efforts to expand high-speed Internet when he announced talks with AT&T last week. The mayor said he convinced AT&T to add Sacramento to its GigaPower program, which will build fiber-optic networks in about 100 municipalities nationwide.

That would clear the biggest hurdle now standing between most consumers and superfast Internet: a wide-reaching system of optical fibers.

The vast majority of Sacramento-area residents opt for speeds of 10 megabits per second or slower, according to Consolidated Communications (formerly SureWest). “What we found is we have a customer who might be using copper and is perfectly happy,” Mark Siegling, business sales director at Consolidated Communications, told SN&R.

Business customers are another story. Siegling estimated that larger enterprises and data centers could use speeds of 100 Mbps and up.

As more of the economy moves online and companies place their data in “the cloud,” institutions including businesses, schools and hospitals will need ever greater Internet speeds. The major Internet service providers, or ISPs, have talked of upgrading their current lines, but no upgrade will ever make copper as fast as optical fibers.

Broadband consultant Craig Settles said we’re moving into a digital age when copper just won’t cut it.

Technology that eats up a lot of data, such as video files, will get more sophisticated and require stronger connections. Settles, who is based in Alameda, compared the transition between copper and fiber optics to the transition between railroads and airplanes.

“There was a point in time when the railroad was fastest,” he said. “Then the airplanes came along and basically changed the nature of transportation.”

Long before Johnson’s announcement, the city of Sacramento has been actively looking into a fiber-optic overhaul. “The city is interested in expanding access to Internet and the capacity—and at the same time lowering prices,” city spokeswoman Maria MacGunigal said. She added that it has been working to make itself “fiber ready” by following the official checklist for cities that want to join Google Fiber, which is similar to AT&T’s GigaPower.

Sacramento already owns some fiber-optic cables, in addition to those set up privately by ISPs. But the network is not extensive, so access and cost depends on your location.

Lujan said to get fiber-optic Internet at Hacker Lab it could run $1,500 a month, not to mention thousands of dollars to install the cables. That compares with traditional Internet packages, like one listed on Consolidated Communications’ website for $52.99 a month.

“Fiber optics can be had by anybody if you have the resources to pay for it,” MacGunigal said. But “it’s really expensive,” so “for really small startups and individual residents, you’re priced out of that.”

Why are fiber optics prohibitively expensive? In much of the United States, unlike Europe, a few big telecom companies dominate the Internet market. This means that in each city, consumers choose from only a handful of providers. These companies installed the copper lines that were once used for telephones and now also serve as conduits for Internet, and they don’t have to lease out those wires for smaller Internet providers who might compete with them. The United States doesn’t even crack the top 10 countries ranked by Internet speeds, beaten by the likes of South Korea and Romania, Bloomberg reported last year.

“Many European countries consider inexpensive 100 Mbps networks as a human right,” said Jay Sales, a local innovation strategist at VSP Global’s The Shop. “In the U.S., it’s a fight.”

Sacramento said it doesn’t have so-called noncompete deals with ISPs, which would prevent it from renting out cables. But entering the fiber-optic game is still a big investment.

“It really comes down to market conditions,” said Rob White, chief innovation officer at the city of Davis (yes, that’s a real title). “Putting fiber in the ground or in poles costs money. Most don’t want to do it where there won’t be subscribers or users.”

White said that Davis is exploring a lot of options, one of which involves an international fiber-optics company that offered to install the cables so that it could charge ISPs (the main ones in Davis are Comcast and AT&T) to use its network.

Sacramento might be going the route of cities that have allowed Google or AT&T to build broadband infrastructure for them.

Other options allow cities to choose from either central or decentralized systems. What we have now is more decentralized, in that various companies claim the right to install their own cables in different parts of town and charge customers accordingly. In a centralized system, however, the city would build and control just one fiber-optic network itself and let ISPs use it.

One proposed state law, Assembly Bill 2292, would facilitate this by letting local governments issue bonds to construct broadband infrastructure.

The face of ISPs are companies like Verizon and CenturyLink, so Internet service is seen as a commercial product. But it differs from other commercial products like shoes and microwaves because there is a very tight limit on the space (roads and telephone poles) that makes it physically possible to offer Internet. That has sparked a national debate on whether to treat the Internet as a public utility.

White likened Internet service to firefighting, which used to be a private enterprise. But that meant that a city could have five different companies fighting fires, which made coordination difficult—until fire districts were municipalized as a public utility. Today, with different companies building disparate systems of copper (and now fiber-optic) cables, Internet infrastructure lacks uniformity.

As White put it, “I think we’re exhibiting a market failure in this world of broadband.”