Gigabit or Bust

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By Lev Gonick, CEO, OneCommunity

Lev Gonick, CEO OneCommunity

Lev Gonick, CEO OneCommunity

—In the beginning, the Internet was a platform for exchanging simple text-based messaging and services.

When the Web was born as a commercial service on the Internet in 1993, simple pictures and even grainy animations began to consume available bandwidth and push our appetites for better screen technology.

Fast-forward 20 years: the Internet has become an entertainment platform.

Sometime this year, the 80% threshold of all network traffic will be attributable to video. Two-thirds of all mobile traffic will also be video-based. Demand for bandwidth is about to increase more than 100-fold as ultra-high definition entertainment and related offerings enter the mainstream. And while computing power and data storage capacity have grown exponentially over the past 20 years, the same cannot be said about bandwidth.

Winning the Battle While Planning to Win the War

Everyone sees the same demand curve for broadband. The incumbent providers for broadband have had to make some difficult business decisions. Last year, AT&T and Verizon lost over three million DSL customers nation-wide. Together, Comcast and Time Warner Cable added about 1.5 million cable modem broadband users.

Traditional telephone company transportation for broadband is copper-based and can no longer keep up with our insatiable demand for high quality video consumption.

Cable’s “Docsis 3” (Data over Cable Interface Specification 3.0, released in August 2006) has won the battle of the 1990s digital infrastructure solutions between the incumbents. Over the past month there have been a number of “next stage” business relationships ironed out between large digital infrastructure players like Netflix (content/licensing) and Comcast (delivery). Apple will be right behind and then Amazon and then…

These are transactional deals about generating higher revenues in what is a symbiotic but nevertheless acrimonious drama of business relationships between titans. These are the winners in the delivery business and today’s content distribution players.

But the global war is not about 1990s infrastructure. By the end of the calendar year 200 million Chinese households will have fiber to their front door. European and Asian cities are all engaged in either building new or renewing their digital infrastructure with fiber optics.

This is a global arms race and it’s no longer “just hype.”

Thanks to Google Fiber, fiber deployments in the United States are no longer the exclusive preserve of fiber evangelists. Mayoral envy is real and cities are lining up to review the Google Fiber playbook and seeing whether they can attract an investment in next-generation infrastructure along with some residual Google brand equity.

While no national policy framework is going to accelerate us getting to gigabit speeds, in northeast Ohio our strategy and motto ought to be “Gigabit or Bust.”

The Northeast Ohio Advantage

Fiber optics is the digital infrastructure of the 21st century. It is the currency of now.

While today, the Internet has become an entertainment delivery platform, within the next 25 years it will be much, much more.

Global health innovation will almost assuredly find its way onto next-generation delivery systems that will combine the flexibility and convenience of mobility with the acuity and clarity made possible by multi-gig fiber optic services. Next-generation collaborative learning from school age to continuing professional education will radically shift from place-based to place-based plus high-quality, fiber-based immersive and interactive experiential learning along with context-aware mobile-based smart technologies.

The growth in technology-engendered innovation will carry over to every other facet of our lives. And while this is only the bottom of the first-inning in the game called the Internet, the disruption occasioned by the Internet will continue to challenge the bedrock institutions of the past 150 years.

Our Advantage: The Open Network Model

For most of the past 10 years we at OneCommunity have promoted the importance of fiber optics. The awareness campaign continues in new segments around our region.

At the same time, it is important to emphasize that our biggest long-term advantage is not just our fiber optical network providing investment protection to public and private enterprises alike. A decade or more from now, as the next generation of our service offerings become more obvious, the fact that OneCommunity offers Northeast Ohio an open network model may be the most important differentiator.

OneCommunity and our for-profit subsidiary, Everstream, provide fiber connectivity and gigabit Internet connectivity. We are seeing many enterprises interested in fiber-only services. These organizations understand the long-term value of the fiber optic platform and are placing their own bets that they will want more of it going forward.

We also expect that there will be new entrants in the marketplace demanding our lit-fiber service. This service would let them compete in an emerging marketplace for services like Internet, voice, entertainment (live and on-demand), home and/or enterprise physical security, health and wellness offerings, library and school services, among others that may be delivered as part of the dematerialization revolution that is the Internet economy.

These are exciting times as we look over the horizon. Our region’s biggest challenge is our predisposition to being fixated on the rear-view mirror.

Helping to create a vibrant and competitive services provider eco-system can be the most important contribution of OneCommunity to the innovation economy we would like to catalyze in our region.

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