So one of our readers asked us this question the other day: Where do internet providers get their internet from and why can’t we make our own?

ANSWER

The Internet is the colloquial term for Interconnected Networks. Your ISP has an arrangement with one or more other companies, who in turn have agreements with yet more companies. Some of these organizations spend lots of money to run physical cables across the planet in the expectation that their cables will be used to transport information between the two or more points that they connected together.

You can form an organization that connects to existing infrastructure and if you’d on-sell it, your organization is an ISP. You could also set up actual infrastructure, but that’s much more costly and risky. Different countries have rules about this mainly to do with illegal use that you’ll need to abide by and since this is big business, many roadblocks exist to prevent your little organization from competing with the incumbent.

Some towns and cities, disenchanted with incumbent providers, have started their own networks and succeed in larger and smaller degree in providing their citizens with Internet connectivity. Various freenets also exist which allow information to travel within the group but not to the wider Internet. This often bypasses legal impediments to creating an ISP.

You can make your own. Go run some fiber optic cable from your house to mine. But remember, fiber costs money; a lot of money. It averages about $50,000 /mile.

  • Google Fiber: Spent $84 Million to run fiber to 149,000 homes1
    • $563 per home
  • City of Longmont, Colorado: In 1997 spent $1.62 Million to run 17 miles of fiber along main roads:
    • $95,000 per mile
    • In 2012 residents voted 66% in favor of a $45.3 Million bond issue to run fiber to homes.2
    • Population of Longmont: 88,669 (2012)
      • FTTH cost per person: $511
      • FTTH cost per household (assuming 1.9 people per household): $971
  • Villagers of Löwenstedt, Germany: Collected $3.4 Million to run fiber to 620 homes in 20143
    • $5,312 per home
  • British farmers in rural Lancashire: Raised £0.5M ($762k), and need another £1.5M ($2.3M).4 They believe they can get the cost for FTTH down to
    • £1,000 ($1,600) per home
  • Sandy, Oregon: Issued 20-year bond for $7 Million, in order to lay 43 miles of fiber, covering 3,500 homes
    • $162,791/mi
    • $2,000/home
  • Los Angeles put put out an RFP for a $5 Billion contract to wire up 3.5 Million residents and businesses (~1M households)6
    • $4,500 per home
  • Salisbury, NC: In 2014 borrowed $7.6 Million from their water and sewer fund to build fiber, and were downgraded after being unable to pay down principle7
    • Population of Salisbury: 33,604 (2013)
    • $430/home (assuming 1.9 people per household)
  • Leverett, MA: In 2012 borrowed $3.6 Million or roughly $1,900 per resident to deliver fibre to 800 premesis8
    • $4,500/home

Categorized in:

AskUs, Fact List,

Last Update: October 6, 2016

Tagged in:

,