Seattle’s planned fiber network: The gigabit is in the details

The plan to build out a gigabit network in Seattle should result in residents getting connections in late Fall of 2013 with prices for service in the $100-range, according to Mark Ansboury the president of GigaBit Squared. Ansboury’s startup plans to build out gigabit networks in six U.S. cities with Seattle and Chicago as the first announced locations.

Seattle and the University of Washington have agreed to work with Gigabit Squared on building out the network. The city already owns its own fiber network, which it is leasing to Gigabit Squared. Ansboury estimates that the company will invest $25 million in the project to get it started with more capital required later. Unlike in Chicago, where Gigabit Squared has grant money to work with, it will have to come up with its own capital for the Seattle project. However, the ability to lease the existing Seattle fiber lowers the cost to a point where building out service becomes viable, because Gigabit Squared doesn’t have to dig trenches or string fiber along utility poles.

photoThus, Ansboury estimates that he should have permits by mid-summer for the network, and can begin construction. If that schedule works, the city gets gigabit service in late fall. The network here is different from the fiber-to-the-home network Google(S GOOG) offers in Kansas City or even from what Gigabit Squared hopes to offer in Chicago. It will have three parts: a fiber-to-the-home component serving roughly 50,000 houses, a point-to-point gigabit wireless service and a Wi-Fi based mobile broadband service in areas where there is existing fiber.

The fiber tech is pretty self-explanatory and the wireless broadband is basically superfast Wi-Fi access points that will attach to that fiber. Subscribers to Gigabit’s home service will have access to that network as part of their home service package but other Seattle residents can also buy access to that Wi-Fi network. That’s an interesting model — will people pay for superfast Wi-Fi in a specific neighborhood where they may not live? Will people who live there buy the Wi-Fi service instead of fiber?

Ansboury says he thinks the Wi-Fi will help drive customer acquisition because people can see how fast a gigabit really is — although he estimates the Wi-Fi network might only offer speeds between 600 and 900 Mbps. He’s also hopeful that he might wholesale that service to other companies, especially during events. In fact as the ISP for the planned network Ansboury is willing to open up access to all of the network, selling wholesale access to others, even to providers that may want to offer competing services he said. Of course, Seattle is also willing to lease its excess capacity to other providers so someone else could come in and do the same thing as Gigabit Squared if they saw economic benefits to doing so.

The other component of the planned network that needs explaining is the point-to-point gigabit wireless rooftop deployment. Ansboury says the company will use a combination of licensed and unlicensed spectrum between 11 and 60 Gigahertz to deliver a gigabit or more between the rooftops of about 39 buildings that make up Seattle’s’ public housing. Such services are not unheard of in major cities, with San Francisco’s WebPass being a good example of such an ISP.

Of course, Gigabit Squared has yet to build a network anywhere, so it remains to be seen how realistic these estimates are. However, it’s clear that cities and service providers are not waiting for the larger, incumbent ISPs to upgrade their infrastructure. As these networks spread and cities can see models to get their own gigabit networks, I’ll be curious how the larger providers respond. Dane Jasper, the CEO of Sonic.Net, which is proposing a fiber-to-the-home network in San Francisco, once told me that for the larger providers to care about these networks they need to take about a fifth of the market.

“Competitors need to take substantial market share before we begin to see large changes in the policies and business practices [of large ISPs],” Jasper said. “If they have 5 percent of the market then there’s not much shift in pricing and things like capping but if competitors take 20 percent with all-you-can-eat plans, the rest of the market changes and consumers will see policy and product and practice changes that are beneficial as a result of the competition threat.”

Hopefully places like Seattle, San Francisco, Chicago, Chattanooga, Tenn. and Kansas City will help get the U.S. to that 20 percent.