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HARI SREENIVASAN: Now our series on broadband and how it's changing our habits, our work, our communities.
Tonight, we focus on why some cities are opting for even faster access and whether it will make sense for other places to follow suit.
New York, Boston, Silicon Valley, those are the kind of innovation hubs that may come to mind when it comes to high-speed Internet. But the city, home to the country's fastest broadband, is nestled below Lookout Mountain along the Tennessee River, Chattanooga.
NARRATOR: In 2010, Chattanooga became America's first Gig City.
HARI SREENIVASAN: In 2008, using a bond issue and more than $110 million dollars in federal stimulus funds, the city's utility began laying 6,000 miles of fiberoptic cables. Today, with speeds of up to one gigabyte per second, Chattanooga's 170,000 residents enjoy broadband that's 200-times faster than the country's average.
The network ties together public services like traffic lights, a smart power grid and gives emergency responders access to more information on the go. City leaders credit it with bring new high-tech businesses and jobs to the area. Out in Kansas City, last fall, Google began rolling out its own network to rival Chattanooga's.
NARRATOR: Introducing Google Fiber.
HARI SREENIVASAN: Part of a project to illustrate the benefits of high-speed broadband.
In 2010, Julius Genachowski, chairman of the Federal Communications Commission, told Jeffrey Brown he agreed the U.S. must do more.
JULIUS GENACHOWSKI, Federal Communications Commission: We will need to get those speeds up dramatically. We set a goal of 100 megabits to 100 megabits to 100 million households by 2020.
HARI SREENIVASAN: So, 100, that's like 25-fold over what -- you're saying over where ...
JULIUS GENACHOWSKI: A very significant increase over where we are -- where we are now.
HARI SREENIVASAN: Yet questions about cost remain for such services.
In Chattanooga, most don't pay the $350 dollars for a month for the one gigabyte of speed, instead opting for a 50-megabit-per-second connection that's still 10 times faster than the national average.
So, is Chattanooga a model for the rest of the country when it comes to broadband?
We explore that with Sheldon Grizzle, founder of The Company Lab, which works to promote innovation and entrepreneurship in Chattanooga, and Richard Bennett, senior research fellow for the Information Technology and Innovation Foundation. He's worked for 30 years on Internet network engineering and standards.
Thanks, both, for joining us.
Sheldon, I want to ask you, for those folks not in Chattanooga and the rest of the country that are watching, give us some concrete examples of an economic impact.
SHELDON GRIZZLE, The Company Lab: Yes.
Well, it's very simple, and it's been very recent, too. About a year ago, we launched a program at The Company Lab called GIGTANK. And the GIGTANK, we basically started around the idea that we need to create these new business models around what the next-generation networks are going to look like.
And so we brought in eight teams from around the world, 15 really highly talented students from around the world to talk about, what do you do with a gig? What does the world look like when you do this? One of the teams that came out of that was a team called Banyan. And what Banyan is trying to do is literally cure cancer.
And the way they're doing that is through a software platform that helps match up researchers that are doing this kind of high, very intense data research around like things like bioinformatics and things like that. And so that team launched in Chattanooga. They're doing real-time collaborative research and version control, very data-intensive stuff, where they're moving massive data sets back and forth in real time.
HARI SREENIVASAN: How is this helping with, say, for example, the number of jobs in Chattanooga? Are there new jobs coming in because of the fact that you have this broadband network?
SHELDON GRIZZLE: Absolutely.
And it's early. It's early in the game. I think people are just starting to catch on with this. But we do have early signs that there are new jobs coming into the area. And we're really excited about that.
But, specifically, they're more around startups. And it will take us a couple years to fully realize that. But we're definitely seeing some early traction with new jobs being created.
HARI SREENIVASAN: All right, Richard Bennett, if this is working in Chattanooga or if it's still taking time, why are there so few communities in the country that have made this kind of an investment?
RICHARD BENNETT, Information Technology and Innovation Foundation: I don't think it's really time to say that it's completely working for Chattanooga.
They're doing some exciting things in terms of developing the incubator, trying to attract talent to the city that's probably a more important element than building staff networks. But Chattanooga isn't especially unique in terms of the overall trend toward faster networks across the United States.
In fact, the actual speeds that consumers in Chattanooga get today are below the national average. But we're installing something like 20 million miles of optical fiber cable in the United States every year and investing more per capita in broadband networks than any other country. So this is an example of an kind of an innovation focus that we're seeing in many communities in the United States, including San Francisco.
HARI SREENIVASAN: So, Sheldon, is everyone there in that city using this gigabyte that's coming to their door?
SHELDON GRIZZLE: No, no, not yet.
The local company that ran the fiber to the home is just like any other service provider. You have to sign up for their service in order to receive -- in order to receive that service. So, a lot of people are still on some of the more traditional service providers, like AT&T and Comcast and people like that.
So you do have to subscribe to that service. And the minimum that you subscribe to is 50 megs a second, which is still really fast.
HARI SREENIVASAN: Right.
So, Richard, why is this parallel that we all -- we always have a tendency to lump in infrastructure when it comes to roadways and when it comes to building the sort of digital superhighway. Why is that not an accurate analogy?
RICHARD BENNETT: I think it is an accurate analogy with broadband as far as analogies go.
The thing that's important to emphasize, though, is the challenge that communities like Chattanooga have is not actually the speed of what we call the last mile connection, which is the fiber to the home or the cable to the home, which would be sort of like your streets in your residential neighborhood.
Their problem is that they're an isolated community in terms of the major switching centers that comprise the Internet in the United States. There are 24 -- basically, your NFL cities are where the large firms get together and meet and interconnect their networks.
And so what you need is more investment in the -- what would be the equivalent of the interstate highway system to connect communities like Chattanooga to probably Atlanta where they go to actually become part of the Internet. And so the tendency among these sort of populist initiatives to -- is to overinvest in the last mile and underinvest in what we call the middle mile that would, say, connect them to Atlanta.
So that's why -- that's where most of the 20 million miles of fiber are going in the United States are in the parts of the broadband network or the Internet that you don't actually see, that don't connect to your home. But they are where the traffic jams are that prevent communities like Chattanooga from really enjoying the speeds that their last mile networks, the cable networks and phone company networks are capable of providing.
HARI SREENIVASAN: Sheldon, what about that notion that perhaps the last mile today of fiber isn't going to be the fastest network around five years or 10 years from now? Could it be wireless?
For other communities, would they be better off investing in some other type of infrastructure?
SHELDON GRIZZLE: Today, we do have an asset that is at our disposal.
And whether the last mile is covered by fiber to the home or wireless, either way, we know that more broadband is coming to people's homes and to people's businesses. And it's important for us to be thinking about innovation, about when that broadband comes into people's homes. How does that change the way that we live our lives?
HARI SREENIVASAN: Richard, your organization just did a paper on how the U.S. compares to other countries. Help put us in perspective.
RICHARD BENNETT: In the late 2000s, especially during the economic collapse, the United States was actually in a fairly dire position relative to other countries in terms of the speed of our broadband networks and the rate at which people were signing up for the advanced services.
We were 22nd in the world in late 2009 and falling. But since then, we have risen to eighth place in the average speed of Internet connections to the home and to the business compared to the rest of the world. And we're rising every year. It wouldn't surprise me if next year we're close to the top five.
HARI SREENIVASAN: All right, Richard Bennett and Sheldon Grizzle, thanks much for joining us.
SHELDON GRIZZLE: Thank you. My pleasure.
RICHARD BENNETT: Thank you.