Getting to a gig: How CenturyLink is building out its network and why.

Gigabit networks are coming. After a long pause between Verizon’s(s vz) FiOS bet and Google(s goog) jumpstarting the movement again, several cities across the nation are getting fiber-to-the-home networks that will be capable of offering connection speeds 100 times faster than average U.S. connections.

The hope is such connections will boost innovation, jumpstart the economies of the areas that have them and lead to new businesses and efficiencies that we can’t yet imagine. But as the Google fiber launches, the efforts of organizations like Gig U and even private deployments show, fiber is still expensive — especially if you have an existing network and are required to support aging copper lines already in the ground.

Google Fiber brick

I asked Matt Beal, the CTO of CenturyLink(s ctl), for details about this shift to a new form of infrastructure and what it costs, what it means for innovation and how to justify it to shareholders. In an interview last Thursday, he was able to share a lot about the benefits of fiber but much less on costs and techniques.

So far CenturyLink has announced gigabit networks in Omaha, Neb. and Las Vegas. They are very different deployments. The Omaha deployment, announced back in May will start connecting customers this month. While Beal wouldn’t go into the cost of laying fiber past each home, he did say that when the company was deciding on Omaha, fiber was a natural upgrade from the aging cable infrastructure already in place.

The infrastructure came from its Qwest acquisition (CenturyLink has made five acquisitions in the last four years) and Beal said the cable lines were so old they wouldn’t support newer services or even digital signals. And, because of where CenturyLink believes the future is going with broadband services and the costs, the company chose to lay fiber all the way to home instead of upgrading the cable plant to DOCSIS 3.0 or even deploying fiber to a neighborhood node.

As for how it was deployed, Beal was cagey. He explained that the company has so many different geographies and networks in its footprint that he’s looking at everything from air-blown fiber distribution to burying the cable at different depths (deeper trenches cost more). He said he’s also looking at moving the optical termination point (the box that the fiber connects to outside) inside the home by consolidating that with the residential gateway. Fewer parts mean lower costs.

Mike Farmer of Leap2 praising the Google Fiber optical network termination box.

Mike Farmer of Leap2 praising the Google Fiber optical network termination box.

The great fiber experiment

Still, the main cost of fiber has always been and will likely continue to be labor. Digging up streets is hard. Google (s goog) and AT&T (s T) have both tried to help reduce that using various social engineering tactics and regulatory tactics that make it possible to dig up a neighborhood once and only for areas where a certain percentage of customers want service.

The downsides of that approach are that poorer areas that might need faster broadband the most, might not get it. That’s a tough challenge, and not one that Beal thinks a private company can solve. While admitting that Google catalyzed the government and private partnership necessary to deploy fiber, Beal said CenturyLink welcomes the opportunity to continue the discussion.

The Las Vegas network was developed with concessions from the local government — although Beal declined to go into specifics. He did say however that he saw a new strategy emerging between cities and broadband providers. Now he only hoped that the federal government would get on board with clearing regulations that Beal says stand in the way.

“There are issues like universal service and carriers of last resort,” that can stand in the way of investment,” Beal said. “So the question is how do we as a country stay globally competitive? We can help by being a part of the conversations with the various communities and testing our economic models.”

This falls in line with what Blair Levin, the GigU executive director and the author of the National Broadband Plan, has called for as well. Levin is a big believer that the FCC, communities and ISPs need freedom to experiment as the country attempts to upgrade its broadband access.

The downside to such experimentation is that some constituents — likely those who are poor or disenfranchised, won’t get the vital economic and personal benefits of faster broadband service. The FCC will have to mitigate these issues, especially if municipalities abandon their rules preventing redlining or other regulations that require service to all areas. It’s unclear if it will be up to the task, or even if the U.S. taxpayers and government are willing to invest in addressing the failures of the private market when it comes to deploying super-high-speed broadband.

Gigabit networks can solve social and computing woes

A map of Google's "fiberhoods" that qualified for gigabit access.

A map of Google’s “fiberhoods” that qualified for gigabit access.

However, Beal is cognizant of these dynamics noting that they will play out neighborhood by neighborhood as operators upgrade their networks. “We are very patently aware of these issues from our heritage as one of the larger rural operators,” Beal said. He continued:

“But because of densities and scale economics, we as a country are potentially creating regional digital divides that our economy will struggle to tolerate. What’s always been a key enabler for us is that we have always had a fairly broad equal opportunity infrastructure as we did with the highway system, and we as a country must place a high value on the ability to communicate seamlessly. I don’t think we want to place ourselves in the position that we might miss out on the next Google simply because we as a country didn’t want to have a conversation about access and cost. We are going to have to figure that out and no private company can do that.”

As for the future that Beal believes all fiber networks can offer, he’s no less verbose. With the Las Vegas deployment he’s excited about the new connected home services that CenturyLink is offering as well as the transition to the cloud occurring in businesses and homes. “That’s why we bought Savvis,” said Beal.

“We realized our future is today where every application is an IP application and businesses and consumers alike will move to a cloud economy,” Beal said. And what role do they see us playing? Fiber helps achieve a role of service provider so we aren’t just an access provider.”

From his perspective as a former computer sciences guy, gigabit access means instant access to data — removing a bottleneck that has long frustrated technologists be they inside a data center or just sending instructions to a chip. Beal believes gigabit access will help offer communities that have it greater economic leverage as well as solve the problem vexing computer scientists.

“As an academically trained computer programmer, I was constantly brought in because the network was inadequate and asked to fix it,” Beal said. “Well, now, we are on the cusp of fixing the network.”