[rayiner]

The real explanation is that cities make competing hard through well intentioned but misguided requirements. Getting a cable franchise means shouldering substantial public interest obligations, in particular the obligation to serve a whole city without regard to proven demand. (You can tell that’s the real reason because waiver of that requirement was the key concession Google demanded where it rolled out Fiber.)

Your financial viability as an infrastructure provider is do, instead by your uptake rate. Most of your cost is in passing each house. Your cost per customer is thus driven by your uptake ratio (subscribers divided by houses passed). Fiber deployments struggle to get to 0.4 or so, meaning you have to pass 2.5 houses for each paying customer. Forcing build out in all neighborhoods tanks your uptake ratio by forcing you to build in lots of places where people can’t necessarily afford your service.

[s73ver_]

At the same time, without those requirements, only the most profitable (read: rich) neighborhoods would be cherry picked, leaving the rest of us without service. That would make the digital divide even bigger, widening the gap between rich and poor.

[rayiner]

My neighborhood isn’t rich by any means, and I can get gigabit fiber from either Verizon or Comcast. Verizon is about breaking even on FiOS at $110/month per subscriber (including television). That’s affordable for a lot of people. (It’s about as much as my electric bill, and less than my heating bill or car insurance).

It would leave out people near the poverty line. But the government can subsidize those people specifically, or build municipal networks in those areas. Better to do that than to distort the entire market by requiring every telecom provider to basically run a public service arm. That ensures only mega-corps can afford to get into the businsss.

It’s illustrative to look at what Stockholm did. A municipal entity built the dark fiber, but it was not subsidized. Nor was it subject to any build out requirement or mandatory cross subsidies. The entity built out based on demand, targeting businesses first. The resulting service is actually pretty expensive (about $130 for gigabit, plus a fee for building the fiber if necessary). For rural areas, the government simply gave a tax subsidy for rural residents to pay to wire themselves with fiber.

I’ll also note that we don’t build other kinds of utilities this way either! If there isn’t sufficient demand for sewer or water, a water utility simply doesn’t build it. And it charges every house about $20-30,000 to do so, regardless of whether they can afford it.

[crzwdjk]

It's not about the absolute wealth of the neighborhood so much as customers per linear foot of fiber (with some scaling for how hard it is to lay that fiber). Apartment buildings with lots of potential customers can end up being much more attractive than mansions with huge yards and one customer in each, even if the mansions' uptake rate is 100% and the apartments' uptake rate is much lower.

[Bromskloss]

> without those requirements, only the most profitable (read: rich) neighborhoods would be cherry picked

Isn't that how everything works, that goods and services are bought by those who can pay for them? Isn't that what having money means? Isn't that why people strive to earn money?

[topspin]

"Isn't that how everything works"...?

No, that isn't how everything works. Sometimes we forego the financial means of individuals and create things that would not otherwise emerge. Both the US telephony and US electrical systems were built out to include the vast bulk of residences in the US regardless of the means of individuals to fund that small part of the system they privately benefited from. Many of the "capitalists" of the time understood that the net value of this enterprise was strongly positive despite the subsidy gifted to those who had not paid all of their part.

Universality has value. It is difficult to calculate that value; simple ledgers and simple views of economics do not suffice. It is looong past time that we set aside the simple, failed model we have endured and solve this problem. That is what these municipalities, in their disparate, halting and often flawed ways, are trying to do.