Slow Internet speeds and a lack of competitive pressure on Internet providers is a fact of life in communities throughout America. We've seen that competition can make a difference, notably with the entry of Google Fiber in certain markets, forcing incumbents to offer faster speeds and better deals.

But Google, or any single entity, can't be expected to upgrade the entire country to fiber. Even in Kansas City, the first Google Fiber location, the service still isn't available to everyone. So the leaders of at least a couple of cities are trying to take matters into their own hands and use whatever leverage they have to lure a new Internet service provider or convince an existing one to get on the fiber train.

"We've gone through the rounds of applying for Google Fiber," Ted Smith, director of economic growth and innovation in Louisville, Kentucky, told Ars, but his town didn't get the nod.

Louisville government officials believe, as many other municipal officials in US cities do, that fiber networks are crucial for attracting and retaining businesses, which increasingly need copious amounts of bandwidth to remain competitive. Fiber can also save residents from the frustration of slow cable and DSL speeds.

"We pay 34 times more, 34 times, not percent, 34 times more than peer cities that have already implemented fiber," said James Benham, a software company owner and elected City Council member in College Station, Texas, which is served by Verizon and SuddenLink. "If you compare our pricing to Chattanooga and Lafayette, who have already done citywide fiber to the home, and fiber to business networks, our commercial rates per megabit are 34 times higher. Our residential rates are 15 times higher. If that was our electric rates or our water rates there would be riots in the streets."

The discrepancy in per-megabit speed arises from cities with fiber deployments offering a gigabit per second at prices as low as $35 a month, or more typically, around $70 or $80 a month. People in many cities pay similar amounts just to get a fraction of a gigabit.

While businesses in the Bryan/College Station area pay $3,395 per month for 50Mbps download and upload, businesses only pay $99 for the same service in Chattanooga, Benham told Ars. Bryan/College Station officials are looking for affordable gigabit fiber for residents and 10 to 100Gbps for businesses, along with public wireless networks. The region includes Texas A&M and other institutions in a thriving research sector.

How do you ask for a gigabit?

Chattanooga, Lafayette, and other communities have built their own fiber networks, with the utility serving as the Internet provider. Government-run networks aren't for everyone, though—Louisville and the metro area of Bryan, Texas, and College Station are both hoping to attract private companies to build out a fiber network.

That's also what Los Angeles is trying to do. The city is planning an RFP (request for proposals), asking vendors to bid for the right to build a fiber network to every home and business in the city.

LA's proposal has been panned as being about as likely to succeed as a unicorn hunt. Louisville and Bryan/College Station think they have a better way.

Like LA, neither city plans to devote taxpayer money to subsidizing the buildout. But instead of going straight to an RFP, which is an advanced part of the public bidding process, they're starting with an RFI (request for information). Presumably, vendors will offer advice on how to best structure a request for proposals and what incentives must be offered to make a buildout worthwhile, making it more likely to succeed.

Perhaps more importantly, Louisville and College Station aren't expecting a vendor to lay fiber immediately to every home and business. The more realistic path is similar to the demand-based "fiberhood" approach that Google is using in Kansas City. People throughout the region are asked to sign up for service, and neighborhoods with the highest demand get service first.

"You always do demand-based rollouts," Benham said. "One of the biggest mistakes Verizon did in their fiber rollout with FiOS is they did an individual house-based rollout, individual houses would order the service and they would run the fiber there. That's an inordinately expensive way of doing a rollout."

Verizon's fiber deployments have notably stalled.

The costs in LA are estimated to be $3 billion to $5 billion. "The cost of carrying the capital, just to get to revenue neutral, would be overly burdensome. It would probably put the company out of business unless they were being subsidized," Benham said. With a fiberhood approach, "the cash flow on the first neighborhood can pay for the 2nd neighborhood and the first two can pay for the third and fourth."

Cities realizing they “have to take action”

Blair Levin, who was chief of staff for the Federal Communications Commission during the Clinton years and helped develop the National Broadband Plan under Obama, is optimistic about the Louisville and College Station attempts to get fiber.

"Communities are recognizing that they need to have better networks than they have today, and they actually have to take action. Market forces won't drive it," Levin told Ars.

Levin also worked as a telecom analyst for investment firm Legg Mason and is today the executive director of Gig.U, which is trying to speed up deployment of fiber in universities and surrounding communities.

In most cases, financial reality does not justify large-scale fiber deployments either by new entrants or by the incumbent provider, he said. Levin identifies six key factors: capital expenditures, operating expenses, risk, revenue, system benefits, and competition.

"The incremental or new capex and opex is going to be greater than the risk-adjusted revenues, plus whatever kind of system benefits the network operator gets plus the threat of competition," Levin said.

Cities need to "change the math" to attract a vendor. This doesn't have to mean providing public financing. One way is to offer regulatory flexibility, speeding up the process of acquiring permits. Another is to have existing infrastructure to offer. Seattle, for example, had a lot of dark (or unused) fiber in the ground that helped make a fiber rollout worthwhile, in partnership with the University of Washington and a company called Gigabit Squared.

Without government prodding, there isn't enough competition in most places to spur a fiber rollout—one fiber project in rural Vermont we wrote about required $116 million in federal funds.

Levin acknowledges that there aren't any good examples of a Louisville- or College Station-style plan succeeding yet—that is, a private company swooping in to save a community that puts out an RFI without any public financing. Communities are still looking for the best model.

"When we did telecom, the fundamental deal was AT&T gets a monopoly in exchange for providing universal service," Levin said. "When we did cable, it was the cable company in a local area gets a monopoly, and they have to build out everywhere. With this upgrade we don't really have a model of the social contract. There's no monopoly to give away; it's not like gigabit is a separate product market, it's simply a better version."

To Levin, a demand-based rollout where the vendor isn't required to extend service to everyone seems the most likely to succeed. While that could disappoint some people, the extension of fiber into communities potentially has indirect benefits for those residents who don't get fiber.

"There's a good reason why it wasn't until Google went into Kansas City that Time Warner upped their speeds. There's a good reason why when Google went to Austin, [Texas], AT&T said, we'll do a gig. There's a good reason why when Google went to Provo, [Utah], Comcast started changing its pricing. These are all good things," Levin said.

A promising start

The Louisville city-county is about 350 square miles with 750,000 residents, Smith said. Using a fiberhood rollout, Smith hopes to get fiber to at least 25 or 30 percent of the city-county over the next couple of years. That would primarily cover densely populated areas, but Mayor Greg Fischer wants to wrap in as many "adjoining disadvantaged census tracts" as possible to spread the wealth, Smith said.

"The old model was 'everybody has to have service,' which is where cable and telephone came from," Smith said. "This is a model that says, 'we can be patient while demand builds.' We'd like to see some of our most disadvantaged served, but we're not starting out with 'everybody must get service immediately.'"

The RFI process will help vendors understand the local regulatory environment, Smith said. "We have the ability to grant rights of way for Internet and residential Internet. We're educating the nation and the world that we are clearing the path, because in many cities around the country it's not so clear what the local issues may be. If you're a city that really wants to push to get this upgrade, you have to do that homework on behalf of the private marketplace."

The Bryan/College Station effort is being spearheaded by the Research Valley Technology Council, covering an area of about 250,000 people, Benham said. The region might be able to lure a vendor with conduit, which is essentially a placeholder that makes it easier to install fiber. Benham said there is already conduit traversing the entire area.

"We can streamline the permitting and inspection process. We can streamline right of way. We can sublease conduit that we have," he said.

The Bryan/College Station RFI was issued last month, and responses are due December 6. "We have started receiving them," Benham said.

The RFI notes that a vendor would receive "Access to available infrastructure and other public assets—including publicly owned poles, ducts, conduits, towers, buildings, dark fiber, etc.—on attractive terms and conditions." It also promises "Streamlined regulatory and permitting practices; Tax, enterprise zone, and other financial incentives; [and] Coordination with planned construction activities."

In Louisville, the RFI was issued last week, and responses are due January 31. In addition to gigabit fiber, the city-county seeks "discounted or no-cost" service of 100Mbps in low-income areas.

Smith is optimistic because of the early response. "We've met with a number of different parties going into this RFI, and we already have preliminary interest," Smith said. "I'm not going to over-promise anything, but the fact that we've had multiple meetings with some parties makes me feel a little more bullish."

The area's current providers, Time Warner and AT&T, are welcome to join the fun.

"I'm not here to say we're trying to get away from our incumbent providers," Smith said. "This is an equal opportunity situation, anybody is welcome. Time Warner is welcome. AT&T is welcome. What we're trying to say is, we see other cities offering a digital infrastructure on much different terms than we see them today. We want to be one of those cities."