MR. KOJO NNAMDIWelcome back. A gigabyte per minute means Internet service that's 100 times faster than average, more bandwidth than you'd know what to do with. And it's also what Google promised its first Fiber City. Two years ago, Google picked Kansas City out of more than 1,000 city proposals to be the first home of Google's fiber-optic network.

MR. KOJO NNAMDILast fall, services went live, and now Kansas City residents can access the fastest Internet in the country. Some speculate that Google could be, well, a wrench in an industry where competition is thin and innovation has stagnated, giving new hope that the U.S. can someday catch up with its counterparts in France, South Korea and New Zealand, who have pioneered broadband expansion.

MR. KOJO NNAMDIBut amid the excitement, some worry that communities like Kansas City are selling off infrastructure and tax dollars to provide -- to private companies whose interest lie with profits and not with the public good, reigniting an age-old debate over public and private services. Here to discuss this on Tech Tuesday is Joanne Hovis, president of Columbia Telecommunication Corporation and president of the National Association of Telecommunications Officers and Advisors. Joanne Hovis, welcome.

MS. JOANNE HOVISThank you. Nice to be here.

NNAMDIAlso joining us in studio is Thomas Hazlett. He is a professor of law and economics and director of the Information Economy Project at George Mason University. Thomas Hazlett, thank you for joining us.

PROF. THOMAS W. HAZLETTThank you for having me.

NNAMDIJoining from studios at KCUR in Kansas City, Mo., is Cindy Circo. She is a Kansas City councilmember. Cindy Circo, thank you for joining us.

MS. CINDY CIRCOHappy to be here.

NNAMDIAlso in that studio is Whitney Terrell. He's a journalist and professor of creative writing at the University of Missouri, Kansas City. Whitney Terrell, thank you for joining us.

PROF. WHITNEY TERRELLThanks for having me.

NNAMDIThomas Hazlett, I'll start with you. Most people living in cities like D.C. have high-speed Internet in their homes. But thanks to Google Fiber, some residents in Kansas City have ultrahigh speed Internet. How exactly does the average Internet speed in the U.S. compare to what's possible with Google Fiber?

HAZLETTWell, there's certainly a zeitgeist that, for some years, has had the United States falling behind. And, in fact, if you go to many of these other countries that we're in competition with internationally, you actually run in the same zeitgeist there. It seems like everybody is falling behind. If you look at the international rankings from the OECD, which is a standard data source, the United States, on a per capita basis, is ranked number 15 in the world in terms of the penetration rate.

HAZLETTHow many households -- excuse me -- how many subscriptions for residential service there are? If you use some other metrics, the United States actually ranks considerably higher and about where Germany or France is and about where Japan is -- as a matter of fact, a little ahead of Japan. The speeds are interesting. There are some places in the world -- Sweden, South Korea, Switzerland have pretty darn high speeds on average, and they're faster than the U.S.

HAZLETTBut the U.S. is basically in a middle of a pack when it comes to OECD on average and particularly with cable emerging from this competition with the phone companies as a relatively cheap ultra-high speed by which we mean, in this case, 100 megabits a second. United States is actually coming up pretty well. But Google has really jumped to the future. I mean, this one gigabit per second service is experimenting with broadband of tomorrow. And they want to see, you know, how that's going to work.

NNAMDIJoanne Hovis, what kind of infrastructure do you need for Internet that fast?

HOVISWell, you need fiber all the way to your home or business, Kojo. You need fiber optics, which is really the holy grail of communications infrastructure. And that is what our competitor nations are building in places like Australia and China, New Zealand, Singapore and so on. Unfortunately, we have it in some discreet areas of the United States, but not that much.

HOVISSo hopefully, what Google is doing by building that infrastructure and creating a place where applications can develop and emerge and innovators can really play on this great big network and create new applications, they are demonstrating that there is a need for these kinds of speeds, and hopefully, we'll see that expand to other parts of the United States.

NNAMDIBut Verizon has been offering fiber to home services since 2005. How come Google Fiber is getting so much attention?

HOVISWhat Verizon's offering is fiber to the home infrastructure. So I actually have Verizon FiOS at my home, and the fiber does come all the way to my home. But the packages that Verizon offers are really cable modem speeds plus a bit more. They're offering things that are equivalent to the infrastructure of our legacy providers, our phone and cable providers. What Google is doing is making a very self-conscious effort to push the Internet into an entirely different world.

HOVISThey call it a step function increase in capacity. What they want to do is enable new applications to emerge that completely transform how we use the Internet. That has not been Verizon's business model. Verizon's doing pretty well, selling the stuff it's got now. So it's a different focus. So it's a different approach and a different attempt to demonstrate different kinds of outcomes.

NNAMDIYou can join this Tech Tuesday conversation on fiber cities and broadband communities by calling 800-433-8850. Would you want Google Fiber in our region? What would you do with Internet that was 100 times faster? You could also send us email to kojo@wamu.org. Send us a tweet, @kojoshow, with the #TechTuesday, or go to our website, kojoshow.org, and join the conversation there. Cindy Circo, to become the first so-called fiber city, Kansas City competed with proposals from some 1,100 other cities, including some -- our region. So how did Kansas City win Google Fiber?

CIRCOWell, I think we were thinking on the same track that Google was, is that we say this as infrastructure. And to build it ourselves was cost-prohibitive as a city, and this was an opportunity to get infrastructure that we felt was needed for the creativity that was happening in our own community.

CIRCOWe very much laid out our game plan as one of the largest rail hubs in the country and presented to Google that we were a center of information and technology already and that we were in a strategically placed -- base placed that could lead them to rolling out whatever their game plan was for the rest of the country. We truly believe that this is an infrastructure need, and it was a economical way for us to obtain it.

NNAMDIWhitney Terrell, in Kansas City, a lot of people are excited about Google Fiber. And around the country, many of us may be a bit jealous, but you wrote a piece in Harper's that was critical of the deal that Kansas City struck with Google. Why do you think the city gave up too much to get the full Google experience?

TERRELLYeah. I'm sort of the fly in the ointment here. But, I mean, I read the 2010 broadband plan that the FCC put out when they were calling for these kinds of networks. And they talked about the new deal, right, and the new use of rural electric cooperatives in the Tennessee Valley Authority to -- as ways to bring electrical service to people who are underserved.

TERRELLYou know, through -- by offering low interest loans to rural electric cooperatives and by building these government organizations, they created the infrastructure that we needed so that the cities and towns that had this infrastructure owned it themselves. And what I found out, you know, is that there are cities that have already built these networks. We're talking about Google Fiber doing this great thing. But Chattanooga, Tenn., already has a fiber-optic network that has speeds that are the same as Google's, Lafayette, La., Bristol, Tenn., Bristol, Va.

TERRELLAnd I -- the more I thought about it, the more I recognize and started looking up statements by FCC chair and other FCC representatives and reading the plan, I realize that we were creating a plan that was saying we're not going to go -- we're not going to support this municipal idea of owning a networks city by city or having people own the networks themselves. We're going to create incentives for private companies to build this network. And I think -- and there was sort of was no debate. That's just like what we're going to do. And I think there should be a debate about it.

NNAMDIGoogle is first and foremost an Internet search company, Whitney. What do you think Google stands to gain in the fiber business?

TERRELLWell, I mean, it's -- in that case, you're really speculating 'cause one of the things about dealing with Google and Kansas City is that they won't really talk about their business model or what they're going to do. And they're a private company, and they don't have to in a way that a utility who has a board that sort of controls what they can and cannot do.

TERRELLI mean, people had speculated, and I speculate that, you know, Google makes money off of searching and people going through its portal to search. If you have people coming to you through the network box in their homes, you have access to their data. And there's a lot of dispute about how Google, what they will and will not do with data, you know, but they'll have access to a lot more user data than they will if they just, you know, or working through Gmail and search based data that they're getting.

NNAMDICindy Circo, is that of concern to the council in Kansas City? Google rolled out its fiber services to Kansas City residents last fall. Besides drawing up tension, what is ultra-fast Internet doing for your city, and do you share any concerns about what Google's ultimate motives might be?

CIRCOWell, there's multiple providers in our region and all of those have the ability to collect data. Collecting data is nothing new, and we're focusing on one company in saying because of them, you're data is going to be collected, which is not true. It is they can collect data but so can others. So, you know, my message to our citizens is, you know, make sure you're educated about your privacy, and you have a choice on how much you can share or not share by your settings, and you need to be aware of that.

CIRCOBut, you know, the other part of this is, you know, putting us in a box of saying it all has to be in one particular way, we're not getting the help from the federal government or the state government in financial assistance in creating these systems. And this was a way for very little money. We're waiving permitting fees. We've -- are willing to use office space with some of the city buildings that aren't being used.

CIRCOThis is nothing compared to incentives that we use for economic development deals, you know, with tax abatement or TIF projects, a physical development deals that the city does all the time. So this is a very inexpensive incentive that the city is in partnership with Google. So the price that we talk about is nothing comparable for what we're getting back in Kansas City.

CIRCOWe've been in the national, international spotlight for the last two years which has brought companies and attentions to Kansas City that rival our sports that we have here. So it's just even -- not even measurable at this time, the media attention that we have received. And we have a very organic group of people that are growing and people who are moving here because of the opportunity to have this gigabyte.

TERRELLThat's true. I mean, it's been good for us in -- I'm sorry to interrupt.

NNAMDIWell, please be brief 'cause I want to bring Joanne and Thomas right in the conversation.

TERRELLAll right. Go ahead. I'll come back in. You go ahead.

NNAMDIMany people, and this is for both of you Joanne Hovis and Thomas Hazlett, many people might think it's annoying to wait for a page to load or to watch video buffer, but they may not see the need for Internet that's 100 times faster. What would the average Internet user do with a 1 gigabit connection?

HOVISKojo, we can only begin to imagine the things we're going to do with it. That's the innovation part. In the same way that 100 years ago, we couldn't imagine the things that we were going to do with electricity. We thought it was all about electric light. We never imagined the vacuum cleaner, the electric oven, the personal computer sitting on our desks at home, all of the things that were inconceivable and would never have emerged if we hadn't had the network there.

HOVISAnd that is what gigabit connectivity could mean, will mean for our economy and innovation, and frankly for our democracy in the next hundred years. But even now, even before we get to that kind of connectivity, we can already see the kinds of applications. I'll give you an example. My daughter who is 12 years old, as a matter of course, is doing her homework online in the cloud with six or seven of her contemporaries.

HOVISShe does not work independently. It's part of the way she is learning at school, that she is always online, and she's always working with other students. That's part of the reality of the new form of education enabled by connectivity. Now, her school has enough broadband that she can do that at school, and we have enough broadband at home that she can do that.

HOVISWhat are the things that she might be doing in a couple of years when we're at a gigabit instead of 50 megabits? What are the things that the other people, the innovators who are in Kansas City now and who are unfortunately not here in the D.C. area because they don't have the same kind of network on which to innovate will be creating?

NNAMDIThomas Hazlett, I am no longer in school, so what will I be doing beyond streaming movies about jazz to remind me about Kansas City and Charlie Parker?

HAZLETTWell, on day one, nothing. So, I mean, you asked a very important question, and the problem we have, you know, it's the chicken or the egg problem. It's very standard. On the first day this rolls out, the advantage over a much slower system of 30 megabits per second or 75 megabits per second is not going to be apparent to just about anybody. People are talking about if you go high-definition interactive gaming with multiple players around the world, maybe this will help you.

HAZLETTOthers are noting if you really do get your 1 gigabit speed locally, the backbone of the Internet won't be fast enough to really keep up, and that's going to have to catch up. So the idea is that in the future, yes, this is going to, you know, Google hopes to stimulate applications that fill in, and there's a long history of that. And looking back, you know, 13, 14 years ago, there really wasn't broadband in the United States. That's when cable modem service started coming in, and DSL was just being brought in to compete with that.

HAZLETTAnd over the last many years, yes, we've created enormous opportunities online, some of which we were just talking about in the education field, you know, medicine and, of course, Web surfing and, you know, video streaming and so forth. And we have gotten faster and faster, and this is the next step. This is Google really dangling something out there that is not at the state of being a nationwide build-out. This is really an experimental project, you know, a science project, and where it goes from here will be very interesting to watch.

NNAMDIGot to take a short break. When we come back, we'll continue this Tech Tuesday conversation on fiber cities and broadband communities. If you've called, stay on the line. We'll try to get to your call, but there are still lines open. So you can call 800-433-8850. Have you lived in a city that had a community-operated broadband network? How did that work out for you? Do you think it's the government's responsibility to expand Internet access, or should private companies lead the way? 800-433-8850. You can send us a tweet, @kojoshow. I'm Kojo Nnamdi.

NNAMDIWelcome back to our conversation on Tech Tuesday about fiber cities and broadband communities. We're talking with Sydney -- Cindy Circo. She's a Kansas City councilmember. Whitney Terrell is a journalist and professor of creative writing at the University of Missouri, Kansas City. Thomas Hazlett is a professor of law and economics and director of the Information Economy Project at George Mason University.

NNAMDIAnd Joanne Hovis is president of Columbia Telecommunications Corporation and president of the National Association of Telecommunications Officers and Advisors. Our number is 800-433-8850. Cindy Circo, about a quarter of Kansas City residents did not have Internet access when Google fiber showed up. What does a fiber optic network mean to those people?

CIRCOWell, it's brought attention to the digital divide. That was something that I was trying to do before the opportunity with Google, and this has highlighted that need to close that divide. We now have organized groups that are reaching out to underserved neighborhoods.

CIRCOThere's non-for-profits that are nationally are coming in and being created right here to help serve those people. It has been a neighborhood-building exercise. We now have people that are living in the neighborhood, excited about the opportunity, organizing their neighborhood to be a part of what they feel is something that will be a huge advantage for them.

NNAMDITodd in Marshall, Va. is on the phone with me. I think you'll want to respond to Todd's question. Todd, you're on the air. Go ahead, please.

TODDHi, Kojo. Thanks for taking my call. My question is instead of Google bringing its money into these high-bandwidth projects in major cities, taking that investment and investing in lower bandwidth connections for rural areas. And I'm -- I live in Fauquier County, and a lot of folks around here don't have access to broadband. They have to use satellite connections, for example. I just wanted your thoughts on that.

NNAMDIWhitney, your thoughts. Why has the example of Google fiber in Kansas City made you concerned that private companies won't reach the kinds of communities that Todd in Marshall, Va. are talking about, rural communities that are left in the dark?

TERRELLWell, essentially, the private capital model is the model we've been using, you know, to build out our broadband network. And as the 2010 broadband plan notes, there are 100 million Americans who lack high-speed access to the Web. So I just don't think that continuing with that -- it's like saying, here we got a plan to fix this problem. What our plan is going to be is the same thing we've been doing in the past. You know, private companies don't go to areas where they don't have -- you know, where they don't feel like there's enough profitable reason for them to give people broadband access.

NNAMDIWell, Joanne, according to the New America Foundation, Americans will pay anywhere from $100 to $300 for an Internet speed of 100 megabits per second, while in Seoul, South Korea, you can get the same speed for just 23 U.S. dollars. Why are Americans paying so much more for the Internet?

HOVISWell, we have a number of things working against us here, I would say. One is that we have, as a matter of reality, ended up with something that looks like monopoly and duopoly. And our incumbent companies are making extraordinary profits on old-legacy infrastructure and on products that are priced for profit. And that's the prerogative of the private sector.

HOVISBut in countries like South Korea and New Zealand, Australia and so on, their central government has taken steps to try to rectify that and to try to make sure that infrastructure is available and affordable. And sometimes that takes leadership at the central government level. We've had some in the form of the Recovery Act broadband funding, but we don't have anything close to what's happening in the Asian countries.

HOVISAnd as a result, we simply don't have the same kind of investment, and that's where local government has stepped in. I really agree with my colleague that there is a significant concern. If we leave this entire industry, if we leave this entire sector to a few private companies who, by definition, have to be concerned with shareholder value first and foremost, we are going to neglect massive parts of the country.

HOVISAnd for even those parts of the country that already have infrastructure, we will leave them without competition, and that is not in the best interests of consumers or in the best interests of the nation when we're talking about an infrastructure that's fundamental to the national interest. That's why local government has been so important in broadband and so many local governments have built their own broadband networks.

NNAMDI800-433-8850. Do you think it's the government's responsibility to expand Internet access, or should private companies lead the way? Thomas Hazlett, fiber connection can cost as much as $2,000 a household. Who is going to front those costs? The user, the provider or the government?

HAZLETTRight. Well, it makes a lot of economic sense to allow the demand to be voiced in the market, and there is no answer to the question, how much speed do people want, do people need. That's just something that we need to observe competitive markets figure out. We have gotten more competition in recent years. Google's entry, albeit in limited markets, is very exciting on that level.

HAZLETTIt's also exciting that the phone companies and the cable companies are competing on the fixed-line side. That was a major goal of the '96 Telecom Act. It seemed to many people to be a pipe dream at the time. Now it's obviously a reality. It's even passé. People talk about high profit side. I'd like to take the other side of Joanne's argument. If you actually look at the profitability of that sector, let me just -- it's just -- it's -- some companies are now making money in wireless, but the fixed-line stuff is very difficult.

HAZLETTAnd the valuations of -- for example, to cable companies relative to their capital cost are way down since the monopolies they did have in the 1980s. So what's happening is more competition, more speed. If you take a company like Verizon, they have invested a lot to try to pass about 18 million households with fiber to the home.

HAZLETTThat's the FiOS network, and Wall Street did not like that because not enough people were subscribing. They were hoping to get 35, 40 percent of the market. They've struggled to do that. To get customers to actually to pay is difficult. Well, that's a signal that we got to be very careful here about spending other people's money. If individuals are not willing to pay for much higher broadband speeds, taxing them to pay for it is, you know, a road to disaster.

NNAMDICindy Circo, your government here. What do you see as government's reasonability to provide this kind of broadband access to all of its citizens? Or should it be left in the hands of private companies?

CIRCOWell, I think what Whitney has done is brought this conversation locally to us on a broader scale. I don't think there is one answer. For Kansas City, it was not affordable for us. We would have had to tax our citizens in order to lay that infrastructure. We were able to get the same infrastructure through a public-private partnership with little to no investment from the city. That, to me, as a city councilperson, is a win.

CIRCOAnd at the same time it brought competitive nature to the market here in Kansas City, and that is a win for the citizens of Kansas City. Nationally, I mean, we don't have much rural area in Kansas City. We have a very broad urban-suburban setting, so we don't have that same conversation. But we do have the lower-income residents, urban neighborhoods, who need the ability to have that connection. And we're going to be able to produce that for them also. So for Kansas City it was an answer. Nationally, I don't think there's a one size that fits all.

NNAMDIEarlier in the conversation Joanne Hovis made a reference to how we thought of and welcomed electricity. People often draw a parallel between the situation with broadband today and efforts to bring electricity to the American countryside 100 years ago. And that time, Franklin Delano Roosevelt pushed the Rural Electrification Act, which helped bring electricity to rural America. Is there a similar solution for expanding broadband? I'll put this question both to you, Joanne Hovis, and to you, Whitney Terrell. First you, Whitney.

TERRELLLook, I think that's what the federal government should be doing. You don't have to tax people. You know -- well, first of all, arguing what we should and should not tax people for is the complicated question. I mean, we spent a heck of a lot of money saving banks. I would have like to have seen some of that money spent on building these networks that I think would be a lot more valuable to us than giant multinational banks.

TERRELLBut, you know, low-interest loans would be a help, you know? I mean, that's what -- that's one of the things that Roosevelt did when he was creating rural electric cooperatives, you know? Yes, I think that the federal government should spend money on this. That's what I think they should do.

NNAMDIYour turn, Joanne Hovis.

HOVISWell, like Whitney, I would really like to see vigorous leadership from Washington on this issue, and there has been some in the past few years. And I think we should give Congress and the administration credit for that. There has been some funding for broadband infrastructure, but unfortunately, it's a drop in the bucket.

HOVISAnd in the absence of a national will to fund this infrastructure and see it as roads as the infrastructure of our future, I think the most important thing we can do is encourage local innovation and local experimentation. And that means that Kansas City's model is great for Kansas City, and Chattanooga's model of building its own infrastructure is great for Chattanooga.

HOVISAnd we have to encourage local communities to go their own way. The biggest thing that would make a significant difference in enabling this infrastructure, in my opinion, is if the 20 states that have phone and cable companies sponsored legislation precluding or hindering local government entry into broadband if that were not a factor. There are 20 states.

TERRELLThat is a great point. That is a great point. I'm glad you brought that up.

HOVISAnd it's very hard to take seriously companies who talk about the importance of competition and that we supposedly have a competitive market, when at the same time, they are lobbying for legislation to stop local communities from doing this and then suing local communities when they do. Let's truly enable our local communities to experiment in broadband.

NNAMDIAnd then...

TERRELLThat wouldn't cost any tax money to just let people try.

NNAMDIAnd then there is this. Here is Dan in Washington, D.C. Dan, you're on the air. Go ahead, please.

DANOK. Thanks, Kojo. I wanted to say thank you to everybody for recognizing the fact that places like Japan and Australia and so forth are blowing the doors off United States when it comes to broadband and have been doing it for quite some time now. And I have been able to experience that personally. Secondly, though, I would like to say shame on America for allowing these big corporations to stranglehold the United States in such a way that we're at their mercy.

DANI say, if we can allow companies to come in and build hot lanes and so forth from out of the country and then turn around and to charge us tolls to use the roads that they built, let's open the broadband market to foreign companies from Japan and Australia and New Zealand and then let's see what happens to the companies here in the United States. Instead of giving the American taxpayer the shaft, maybe they'll get on the ball and allow us to have what the rest of the world has at a decent rate.

NNAMDIWell, first, I think we'll have to get rid of K Street in Washington altogether in order to that, but I'd like to hear your view on it, Thomas Hazlett.

HAZLETTYeah. Well, this idea that the rest of the world is blowing the socks of the U.S. in broadband is -- it's got a German truth, and it's about 98 percent fantasy. The United States has higher broadband penetration than Japan. They do have some fiber to the home in Japan. There are a handful of countries that do have fiber to the home and have more of it than the U.S., but they're not getting the new applications to really fill up that pipe. And so they're wondering if that's a good investment or not.

HAZLETTI'd like to also correct the idea that a third of the U.S. doesn't have access to high-speed residential broadband. That is just not right. I don't care how you read the national broadband plan. The Federal Communications Commission says that over 95 percent of the U.S. households are covered by cable broadband systems, and obviously, the telephone companies are in for some of the rest of it.

HAZLETTAnd, in fact, wireless broadband is now available to more than 98 percent of the country. And satellite broadband, 12 megabits per second at $50 is now available ubiquitously. The fact is that there has been progress in the market. The United States is not getting "blown away" by the rest of the world. Now, we do have to have good policies to keep up.

HAZLETTAnd I should point out that we already have subsidy policies. The fact that nobody is talking about the subsidies that we spent billions and billions on, you know, more than at least $75 billion since the '96 Telecommunications Act to expand telecommunications in the rural areas is a product -- in fact, it does not help consumers. It is...

NNAMDIWell, what you seem to be saying is that there is nothing broke, so we don't need to fix any of that?

HAZLETTNo, no. I mean, we always want to do better, and there are ways to do better. And I, you know, I applaud some of the efforts. And, in fact, I applaud Google for dangling this demonstration project out there and provoking the incumbents. So I think that that's quite progressive. I also applaud Kansas City for allowing this to happen.

NNAMDIWell, Joanne Hovis, the FCC unveiled it's national broadband plan to expand Internet access into 2010. Based on that study, what would you say is the federal government's approach to catching up with the rest of the world in broadband expansion when, in fact, Thomas Hazlett is saying there's no catching up to do, we're already there?

HOVISThe national broadband plan is a 2010 document, and we are in a field in which a year is an eternity. So I hope that the FCC and -- with the encouragement of Congress and the administration, will consider revisiting that plan and looking at what is actually happened in the interim and whether their prescriptions have actually worked out because this infrastructure is being built in the rest of the world, and the national broadband plan took some of that into account but not sufficiently.

HOVISWe are competing with countries where 90 percent of their homes will have the kind of speed that people in Kansas City will have from Google. And when that happens, where are the application developers going to go? Where are the innovators going to go? They're going to go where they have the playground in which to play, the roads on which to drive because you can't develop an application without the network on which to develop it.

NNAMDIJoanne Hovis is president of the Columbia Telecommunications Corp. and president of the National Association of Telecommunications Officers and Advisors. Thomas Hazlett is a professor of law and economics, and director of the Information Economy Project at George Mason University. Cindy Circo is a Kansas City councilmember.

NNAMDIAnd Whitney Terrell is a journalist and professor of creative writing at the University of Missouri-Kansas City. Thank you all for joining us. I suspect we'll be rejoining you for another conversation like this in a little while. And thank you all for listening. I'm Kojo Nnamdi.