Seattle’s Costly Dark Fiber Deal is Dead

January 30, 2014

The government-sponsored, high-speed internet pet project of former Mayor Mike McGinn has finally died. The ambitious endeavor, a feature of the Seattle Broadband Partnership, sought to use the city’s 500 miles of unused fiber cable, known as “dark fiber,” to provide 12 Seattle neighborhoods with fast fiber-to-the-home internet service. The dormant fiber optic cable system was expensively installed under Seattle’s streets during the 1990s tech boom and then quietly abandoned.   Like a digital Underground Seattle, the network lies beneath the city’s streets and sidewalks, a monument to the bold aspirations of late 20th century high-tech dreamers.

Fiber optic cable has clear advantages over traditional wiring.  Fiber-to-the-home, or “FTTH” technology works like the conventional copper wires that currently bring many of us our phone calls, internet and email. The difference is a single copper wire can carry six phone calls simultaneously, while a fiber optic line can transmit more than 2.5 million phone calls at once. At least one million consumers in the U.S. already use FTTH, while six million in Japan and 10 million worldwide enjoy its astonishingly high-speed service. Even the City of Ellensburg and the tiny town of Ephrata, Washington run on modern fiber. Eyeing these statistics, former Mayor McGinn launched the project to light Seattle’s dark fibers in hopes the city would become the fiber optic “city of the future.”

Former Mayor McGinn signed a deal in 2012 with Gigabit Seattle, a tech company specializing in FTTH wiring. The deal collapsed when the company failed to raise sufficient money to keep its part of the bargain and build its initial network. This resulted in a $52,250 unpaid bill to the City of Seattle for some preliminary engineering work and lease of the fiber network. So far, Gigabit has paid just $2,500.

Meanwhile, Gigabit Seattle quietly went dark itself. Co-founder and President Mark Ansboury stepped down, the firm’s Twitter and webpage went silent and its offices disconnected their phones entirely. With no one left to prosecute, the City’s attorneys are deciding whether or not to send the unpaid $50,000 bill to a collections agency.

People in Seattle seem to subsist on technology as well as food and water, so FTTH might have a future when internet traffic is driven up 50 times its current rate within the next 10 years, as predicted by a study from the Discovery Institute. So why did Gigabit Seattle fail? The company’s poor strategy was unable to carve out a market share. The public use of taxpayer dollars toward a single government-selected venture aside, FTTH providers already exist in Washington:

The nonprofit Northwest Open Access Network completed construction on 1,300 miles of fiber cable network last year, while local utilities such as the McDaniel Telephone Company in Lewis County will soon offer fast fiber service to customers. The major Internet Service Provider companies have invested a total of $6.2 trillion in fiber networks in Washington alone. According to the 2013 Washington State Department of Commerce Broadband Annual Report, 98.9% of the state’s residents live in areas where broadband is available at a minimum speed of 3 Mbps. The report states that Washington is first in the nation for software publishers and second in total state-level payroll coming from the technology industry, at 18.4%. Online shopping emanating from Washington accounts for $3.5 billion yearly.

The death and debt of Gigabit Seattle reiterates a classic message to Quixotic politicians: however clever the innovation or accessible the assets, the private sector’s technological gambits always outperform the government’s.