Homes With Tails: What if You Could Own Your Internet Connection?

by Derek Slater and Tim Wu

America’s communications infrastructure is stuck at a copper wall. For the vast majority of homes, copper wires remain the principal means of getting broadband services. The deployment of fiber optic connections to the home would enable exponentially faster connections, and few dispute that upgrading to more robust infrastructure is essential to America’s economic growth. However, the costs of such an upgrade are daunting for private sector firms and even for governments. These facts add up to a public policy challenge.

In this paper, we propose and describe a new way to encourage broadband deployment. Most proposals have focused on deployment as a problem for firms and for government. For firms, the question is how a company can justify investments in a fiber infrastructure without a “killer app” – a new and proven revenue source that is different from what is available from existing copper wires. For governments, the questions consider how they might build and operate their own networks, convince or pay existing carriers to do so, or encourage market entrants to arrive and save the day.

Our intuition is that an innovative model holds unrealized promise: household investments in fiber.

Consumers may one day purchase and own fiber connections that run from their homes. They would then be able to connect to a variety of service providers, including today’s Internet, television, and telephone services, as well as ultra-bandwidth intensive services of the future. Consumers would have the opportunity not only to get a fast broadband connection, but also benefit from greater competition and lower prices in the retail service market.

We call this property model “Homes with Tails,” for the fiber would form part of the property right in the home. Key facets of our approach include:

1. A “condominium” model for fiber ownership, in which individual strands of fiber are sold to consumers, while maintenance and other collective needs are managed jointly.

2. Private firms and municipalities could consider selling fiber connections based on this model; and

3. Governments could consider using various mechanisms to support consumer purchases, including a tax credit to homeowners or renters who purchase a broadband connection.

The idea of customer-owned fiber may seem odd, but it is important to remember that many items that consumers buy today would have seemed very strange not long ago. Until the personal computer, a computer was something that only large companies owned. For decades, telephones were available only for lease, not for purchase. Home fiber could be the next technology that moves into the realm of consumer property.

That said, the goal of this paper is rather limited: to outline what customer-owned fiber might look like and suggest why it is worth investigating further. We do not suggest that this model is the panacea for broadband policy challenges; rather, it might serve as part of a broader solution. Furthermore, there are many empirical questions and obstacles to successful implementation that cannot be fully evaluated at this time. In particular, no market for consumer purchase of fiber currently exists, and there is a collective action problem in deploying a network of this sort. The only way to truly test this model’s feasibility is to attempt to implement it. Below, we describe one trial that is already ongoing in Ottawa, Canada, and more experiments of this kind would provide important insights.

In the end, the intuition behind this paper is as old as property theory: that people will spend more on and value more that which they own. 

For more on the concept, see my previous post. We’ll post the v1.0 of the paper early next week.

If you’d like to come to the event, here are the details, or see below.

Homes With Tails: What if You Could Own Your Internet Connection?

America’s path to becoming a broadband leader is uncertain. Few dispute that deploying fast, universal, and affordable broadband is imperative, but the costs of robust network infrastructure are daunting for the private sector and governments.

In a forthcoming New America Foundation working paper, Tim Wu and Derek Slater propose an innovative way to drive broadband deployment: a model that encourages consumers to purchase and own the “last-mile” connection that runs into their home. By purchasing their own fiber optic connections, consumers would be able to connect to a variety of service providers. This model holds the potential for higher broadband speeds, greater competition, and lower Internet service prices.

The idea of customer-owned fiber may seem odd at first, but buying items like personal computers, answering machines or even telephones was also unheard of only a few decades ago. Home fiber could someday become a must-have technology.

Join the authors for a presentation and discussion of this new proposal, and learn more about “Homes With Tails.”

Start: 11/21/2008 - 12:30pm

End: 11/21/2008 - 1:30pm

New America Foundation

1630 Connecticut Ave NW 7th Floor

Washington, DC, 20009

United States

What if you could own your internet connection?

It may sound strange, and it’s certainly not what we’re used to. Today we have a “carrier-centered” model; phone and cable companies spend billions to build, operate, and own the “last-mile” connection — the copper, cable, or fiber wires that come into your house. Individual consumers then pay for particular services, like phone service or Internet access.

In turn, we tend to think about broadband deployment in carrier-centric ways. If we want to see super-fast fiber connections rolled out to consumers, the main question appears to be whether carriers have appropriate incentives to invest.

But there’s no law of nature that says this is the only possible model. Many businesses, governments, universities, and other entities already own their own fiber connections, rather than leasing access to lines. It may also be possible to find ways for consumers to purchase their own last-mile strands of fiber.

Here, as anywhere, there would be certain advantages that come with ownership over renting. No one necessarily needs to own skis or a car, but many of us do. If you owned your own fiber, you’d be able to connect it to a service provider of your own choosing. Over time, you might save money, and it could make your house more valuable to have a fiber “tail.”

This may all sound rather abstract, but a trial experiment in Ottawa, Canada is trying out the consumer-owned model for a downtown neighborhood of about 400 homes. A specialized construction company is already rolling out fiber to every home, and it will recoup its investment from individual homeowners who will pay to own fiber strands outright, as well as to maintain the fiber over time. The fiber terminates at a service provider neutral facility, meaning that any ISP can pay a fee to put its networking equipment there and offer to provide users with Internet access. Notably, the project is entirely privately funded. (Although some schools and government departments are lined up to buy their own strands of fiber, just like homeowners)

The main challenges with this model are economic, rather than technical. Most importantly, ownership has to be made appealing and affordable to consumers. The construction company is using conservative estimates that only 10% of homeowners will sign up and there will be a per-customer cost of $2700. If you assume 50% take-up, then the per-customer cost drops to $1100. Both figures might seem like a lot, but people pay for a variety of improvements to their home — like remodeled kitchens, or a deck — that also cost large sums.

This model faces other significant obstacles as well and it may only be possible in certain circumstances, if it’s practical at all. But the only way to really figure that out is to experiment. Cable television started out as CATV — community antenna television, an experiment by individual entrepreneurs and rural towns to deliver broadcast signals across longer distances. The Internet started as an experiment in the research community before becoming the worldwide network we know today.

It’s also worth considering that, as recently as a few decades ago, personal telephones were unheard of — the telephone was owned by Bell and simply part of the network. Similarly, the very idea of a “personal” computer used to seem ridiculous, and people relied on sharing access to mainframes. Sure, there are differences between owning your own computer and your own internet connection, but perhaps one day we may see that the differences weren’t as great as we thought.

Even if this experiment fails, it can be a worthwhile data point in discussions about broadband deployment. We need as much creative thinking as we can get to determine how to deliver fast, open Internet for everyone.

The Ottawa trial was driven forward by Bill St. Arnaud, Chief Research Officer at CANARIE, a nonprofit research group devoted to promoting advanced network infrastructure in Canada. If you want to learn more about this idea, check out his presentations here.

Jim Griffin has been telling everyone to “monetize the anarchy” for essentially the entire decade. This solution was on the table dating back to Napster. The idea has long percolated within the entertainment & tech community (read: the pholist). Many, many others contributed to its development, including academics Terry Fisher, Neil Netanel, and Jamie Love (focusing more on a compulsory version), as well as organizations like EFF and the Berkman Center. I remember FMC’s Walter McDonough at the Berkman-Gartner Digital Media Conference in 2003 saying something to the effect of, “We all know we’re headed towards collective licensing anyway, right? Why can’t we just admit it?”

And yet for so long it seemed like this win-win solution would never truly break into the mainstream, including the major record labels. For awhile, many recoiled at the mere mention of collective licensing. (At the extremes were folks like Jim DeLong and Patrick Ross from PFF, who compared it to a “socialist gulag” and called it a “terrifying model.”)

Jim Griffin’s hiring suggests that voluntary collective licensing is finally getting the attention and investment from key rightsholders that it so richly deserves. It’s a good day for rightsholders, artists, innovators, and music fans. Hopefully, this is just the beginning….

Feb. 13, 2008, Google Public Policy blog: “Here in Canada, where there is an ongoing debate about how to best implement the WIPO Copyright Treaty, Google has joined with a number of other Canadian and international companies who have a shared vision of balanced copyright. The Business Coalition for Balanced Copyright has issued a two-page position paper calling for a ‘balanced ‘package’ approach for a strong Canadian copyright regime.’”

Feb 13, 2008, Michael Geist: “Canadian DMCA on Hold?”

Stay tuned….

As we’ve discussed before on this blog, innovation has thrived online because the Internet’s architecture enables any and all users to generate new ideas and technologies, which are allowed to succeed based on their own merits and benefits. Some major broadband service providers have threatened to act as gatekeepers, playing favorites with particular applications or content providers, demonstrating that this threat is all too real. It’s no stretch to say that such discriminatory practices could have prevented Google from getting off the ground — and they could prevent the next Google from ever coming to be.

While regulations on certain types of discrimination is one way to help preserve the Internet’s openness, other remedies including expanding broadband competition and market-based initiatives may be important complements. Rep. Markey’s legislation sets a sound course towards properly putting all the options on the table, by adopting the proper general principles and asking the FCC to address the right kinds of questions.

As important, Internet users themselves will get a chance to answer those questions. From the start, the heart and soul of the movement for net neutrality has been the grassroots — the thousands and thousands of ordinary Americans who have already spoken up for Internet freedom on sites like Save The Internet and beyond.

Net neutrality is too often painted as just about particular companies’ competing interests, but that’s missing the point. Rather, net neutrality and broadband policy are — and should be — about what’s ultimately best for people, in terms of economic growth as well as the social benefit of empowering individuals to speak, create, and engage one another online using the wide panoply of innovations available to them. In other words, broadband policy should come from the bottom up.

(Cross posted from the Google Public Policy Blog)

Broadband deployment in the U.S. is at best disappointing and at worst a crisis. The United States lags behind other countries in broadband uptake per capita, ranked 15th in the latest Organisation for Economic Co‐operation and Development (OECD) data. While consumers in Sweden and Japan are starting to zoom ahead with 20 and even 90 megabit/second connections delivered over fiber connections, U.S. consumers pay more for less, with only DSL and cable available in most markets. Some rural areas lack broadband altogether.

At a pre-conference yesterday before the “State of the Net” in Washington, D.C., the nonprofit association EDUCAUSE released a thoughtful proposal for how to achieve a better broadband future:

“[T]his paper proposes the creation of a new federal Universal Broadband Fund (UBF) that, together with matching funds from the states and the private and/or public sector, should be used to build open, big broadband networks of at least 100 Mbps (scalable upwards to 1 Gbps) to every home and business by 2012. U.S. state governors and foreign heads of state have found the resources to subsidize broadband deployment; the U.S. federal government should as well.”

Though some dispute how bad U.S. consumers have it, everyone can agree that the U.S. can – and should – do much better. Deploying faster, universal, and ubiquitous broadband is essential to sustaining the Internet as an engine for economic growth, innovation, and social discourse. Whether or not one agrees with EDUCAUSE’s particular strategy, the paper demonstrates that a clear, concerted national broadband strategy of some kind is required to reach that bigger, better broadband future.

You can read the whole paper here. I took notes at the conference, including the opening remarks of FCC Commissioner Michael Copps, which you can read here.

I would’ve been thrilled to see this when I was a student, and I’m thrilled that it exists now. It’s a fantastic opportunity for any aspiring tech policy geek. Check out the site for more details.

She recently sent me a new article, “Semiotic Disobedience,” which she’d appreciate feedback on.

“In this Article, I seek to introduce another framework to supplement
Fiske’s important metaphor: the phenomenon of “semiotic
disobedience.”Three contemporary cultural moments in the world - one
corporate, one academic, and one artistic - call for a new understanding
of the limitations and possibilities of semiotic democracy and underline
the need for a supplementary framework. As public spaces have become
converted into vehicles for corporate advertising - ads painted onto
sidewalks and into buildings, schools, and other public spaces - product
placement has soared to new heights of power and subtlety. And
throughout, the law has generously offered near-sovereign protection to
such symbolism through the ever-expanding vehicle of intellectual
property protection. Equations between real property and intellectual
property are ubiquitous. Underlying these themes is a powerful linkage
between intellectual and tangible property: as one expands, so does the
other….
“Just as previous discussions of civil disobedience focused on the need
to challenge existing laws by using certain types of public and private
property for expressive freedoms, today’s generation seeks to alter
existing intellectual property by interrupting, appropriating, and then
replacing the passage of information from creator to consumer. This
Article suggests that the phenomenon of semiotic disobedience offers a
radically different vantage point than Fiske’s original vision, one that
underlines the importance of distributive justice in intellectual
property. Thus, instead of interrogating the limits of First Amendment
freedoms, as many scholars have already done, I argue that a study of
semiotic disobedience reveals an even greater need to study both the
core boundaries between types of properties - intellectual, real,
personal - and how propertization offers a subsidy to particular types
of expression over others.”

Of course, it goes without saying that I’m going to really miss working at EFF with my copyfighting and freedom-defending colleagues. I have been so lucky to work with and learn from such an amazing, talented, and devoted group of people. It has been, quite literally, a dream come true.

So you won’t see my EFF cross-posts here any more, but please do keep hitting up DeepLinks and the Action Center for the latest in the fight for your digital rights.

But what the world of unencrypted music giveth, DRM-locked media taketh away. DRM allows media vendors to restrict your fair use rights so that they can be sold back to you piecemeal as “features.”

The latest example: Apple’s announcement that you can now create ringtones of DRM-locked iTunes-purchased music. Apple will only let you convert those tracks to ringtones if you pay another dollar, and, just as you can only move iTunes DRM restricted tracks to the iPod and not other portable players, these ringtones only work on the iPhone. If you’d rather create your own ringtone using a tool like iToner, too bad — the DRM won’t let you, and circumventing the lock could violate the Digital Millennium Copyright Act (DMCA).

Imagine if this is how the CD world had worked. Your investment in CDs has paid all kinds of dividends over time because third parties could freely enable novel personal uses, like ripping MP3s and moving them to a portable player of your choice. Innovators didn’t need to beg copyright holders’ or record stores’ permission first in order to help you get more from your music collection.

DRM can take away that freedom and the innovation it enables, as rights holders and vendors can block new tools outright and make you pay again and again to use music you’ve already purchased. Restricting compatible players and the creation of ringtones is just the tip of the iceberg.

(As we pointed out earlier, Apple is also apparently trying to frustrate turning unencrypted songs into iPhone ringtones using iToner. Will Apple try to use the DMCA to squash this legitimate use as well? Time will tell.)

(Cross-posted at DeepLinks)

This bill goes even further than the prior bill in that it would ratchet up statutory damages in certain instances. Under copyright law, copyright owners don’t need to prove that they have been harmed in order to get damages and can instead elect to get statutory damages, which a court can set between $750 and $30,000 per work infringed. Such disproportionate penalties can be especially dangerous when it comes to lawsuits against mass-market products like the iPod or TiVo that enable the making of thousands of copies.

H.R. 3155 makes matters worse by allowing a judge to dole out damages for each separate piece of a derivative work or compilation, rather than treating it as one work — for example, copying an entire album could translate into damages for each individual track, even if the copyrights in those tracks aren’t separately registered.

This is particularly unfair because record labels register entire albums as single works principally to strip their artists of reversion rights they would otherwise enjoy if the songs were registered individually. (As some may remember from the 2000 flap over a stealthy RIAA amendment slipped into the Copyright Act, record labels register albums as “compilations” or “collective works” in an effort to characterize them as “works for hire,” which are owned outright from their creation by the labels, and thus can never revert to the artist.)

Let’s hope this bill meets the same fate as last year’s DoJ proposal and is stopped dead in its tracks. Take action now to stop it, and make sure you also support the FAIR USE Act, which would put much-needed limits on statutory damages.

(Cross posted from DeepLinks)

We won this battle in Congress, but we’re not out of the woods yet. Unfortunately, the RIAA’s college lawsuit campaign rages on, and universities remain under intense pressure to bully their students and install network surveillance technologies. While some schools have implemented draconian penalties for file sharing — including one strike and you’re off the network policies — others have gone further and started blocking certain P2P tools. Meanwhile, Congress has recently been scolding and scrutinizing colleges for file sharing on their networks, and more legislation may be in the pipeline.

Indeed, Sen. Reid still did tack on another amendment that instructs schools to tell students about the possible penalties for copyright infringement. This new language is far less worrisome, but it doesn’t move the ball forward in the P2P dilemma either. While students certainly should know the potential personal consequences of file sharing, all the finger wagging in the world isn’t going to stem the tide of “Internet piracy.”

The longer this futile fight against ordinary fans continues, the more universities’ resources will be wasted, the more legitimate uses of the network will inevitably be chilled, and the more money will be left on the table. After all, tougher enforcement isn’t putting a dime in artists’ pockets, but a sensible alternative like blanket licensing would.

Hopefully, last week’s fight in the Senate will be another reason for the university community to push hard towards a better solution that gets the entertainment industry off schools’ backs, ensures that artists are paid, and lets students keep sharing. For more on this topic, read Fred von Lohmann’s Washington Post editorial, “Copyright Silliness on Campus.”

(Cross-posted from DeepLinks)