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Gigabit Internet Connections Make Property Values Rise 108

Jason Koebler writes: When families go to buy a new home, they're most often looking for a couple things: Good schools, a safe neighborhood, maybe something that's near public transportation. And, increasingly and undeniably, access to gigabit internet service. A study by RVA LLC Market Research and Consulting found that fiber optic internet adds roughly $5,250 to the value of a $300,000 home. "It's getting to the point where, if my neighboring community has a gig and we're still doing satellite, the property value in that town is going to go up," Deb Socia, director of Next Century Cities, a coalition of cities trying to provide gigabit internet speeds to their citizens, said. "You're going to lose people and you're going to lose revenue without it. I'm hearing it from folks in different chambers of commerce, in real estate, in politics."
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Gigabit Internet Connections Make Property Values Rise

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  • "It's getting to the point where, if my neighboring community has a gig and we're still doing satellite, the property value in that town is going to go up," Deb Socia, director of Next Century Cities, a coalition of cities trying to provide gigabit internet speeds to their citizens, said. "You're going to lose people and you're going to lose revenue without it.

    So she's equating high latency capped satellite service against gigabit fiber? Well duh. It would be more interesting to see if average people would really be willing to pay that $2,500 premium if the choice was between DOCSIS 3 service and fiber service. Or even between reasonably fast DSL vs. fiber. It's been my experience that there's not much difference for the typical user (hint: /.'ers are not typical) once speeds exceed 5mbit/s. What's the practical difference between the higher D3 tiers (say 50

    • by TWX ( 665546 ) on Tuesday November 04, 2014 @07:00PM (#48314081)
      It's increasingly going to be about multiple users or automated users though. You're going to have two or three televisions streaming high definition content, you're going to have people using Internet-connected applications or games while those televisions are on in the background. You might even have security systems with offsite data storage at the security company; further streaming video content, this time sending rather than receiving.
      • by Shakrai ( 717556 )

        It's increasingly going to be about multiple users or automated users though

        I've heard the multiple users argument before; I'm not unsympathetic to it, though I do have to wonder about the fairness of a price structure that charges the household with five simultaneous HD video streams the same as the household with zero or one HD video streams. Note that I'm not arguing in favor of caps; they're a blunt and ineffective solution (moved bytes don't cost the ISP money, but sustained bit-rate does) but I've often wondered why demand or 95th percentile billing wouldn't be fair.

        There's

        • by TWX ( 665546 )
          I think that the multiple-user angle will finally be able to happen now that everyone is finally getting 1080p content online and non-tech businesses, like the security companies, are starting to see the benefit of being able to offer that kind of expensive service compared to previous, "call the cops when the alarm goes off" service.

          It took some time to figure out how to use up DSL and cablemodem bandwidth, and now that we have that we've found ways to use even more than it can provide.
          • by Shakrai ( 717556 )

            IPTV on demand is really the worst delivery system possible for video; virtually every delivery system that preceded it relied on the efficiency of point-to-multipoint, be it over the air television, CATV, or satellite. Now we're faced with a system that's going to send a discrete copy of House of Cards down the pipe for every one of the tens of millions of people that request it, even for those people that request it at virtually the same time.

            I suppose it was inevitable, even a 1 GHz CATV plant can't co

            • by TWX ( 665546 )
              Bear in mind, the home, whole-house DVR concept can be applied to making the burden of on-demand streaming easier, especially if that appliance learns the viewer's habits/preferences and can attempt to cache copies of shows or movies for the viewer when they're multicast as a form of initial broadcast, even if the viewer hasn't specifically instructed the appliance to do so. Even if the cache remains unwatched for awhile and gets partially overwritten, any portion of a local copy still saves the network fr
              • by Shakrai ( 717556 )

                That's a very interesting concept; I suspect it's years away and by that time the bandwidth argument will be moot, although perhaps not since the trend seems to be for ever increasing video resolution. You've clearly given this more thought than I have; I'm not much of a video person and have largely contented myself with OTA + TiVo. I don't even really supplement with IPTV all that much, except for those times when I have company over that insists on watching some movie or another, which I usually end up

            • Far more likely that companies like google will provide cache servers that are multicasted to and then single streamed from.
        • *NO* You were paying $20/month for the phone line. As modems increased in speed, from 300 baud, to 2400 baud to 14.4k to 56k, *YOU DID NOT PAY MORE FOR THE PHONE LINE*

          Most ISPs also did not charge a differential between a 56k modem and a 14.4k modem or a 2400 baud modem.

          • by TWX ( 665546 )
            ISPs often would charge a premium for the fastest modem connection, having separate phone numbers for the higher speed bank, but that was usually only temporary, as a premium service. I remember 33.6K and 56K both having higher price points than the next-down when they debuted.
            • by Gr8Apes ( 679165 )
              Guess that depended upon your ISP. Mine was flat and had issues with their local POTS switches, having to have their telco install a whole new set of hardware because of the amount of lines and data they were pushing through neglected old equipment. The price was the same, no matter what you were using on your end (14.4 through 56K). The price? $14 / month at that time.
      • All the uses for gigabit connections I hear basically boil down to multiple HD video streams and rented applications running on remote servers. Until someone can actually give me some truly useful purposes, know what you can keep your gigabit connection. Replacing TV tuners and Cable boxes should not be what we envision the Internet to become.
        • Replacing TV tuners and Cable boxes should not be what we envision the Internet to become.

          Why not?

        • Off site backup. Out of home access to home resources (streaming off of the DVR, using my computer at home via remote connection, remote play of games from my console, etc.). Smart home security systems that use more data than just "did an alarm get triggered". Telepresence.
    • Re: (Score:3, Funny)

      I don't know, think about how many toolbars that gigbit internet could handle? The average user could have 10, no 20 different toolbars installed, and still not notice any degeneration of service.
    • by ruir ( 2709173 )
      Not that much difference once speeds exceed 5 Mbps? You surely jest. I would say once speeds exceed 30-50 Mbps, there is not much more difference. However that is one side of the coin, it does not matter much if my ISP gives me 1Gbps down and only 100 Kbps up. The other direction it too important. We have 100Mbps/8Mbps at home, and it makes quite a difference.
  • by Overzeetop ( 214511 ) on Tuesday November 04, 2014 @06:55PM (#48314049) Journal

    You'd probably have most of the villagers at the town hall with pitchforks and torches. Funny how we want the services and value, but almost nobody is willing to pay what it's worth to get it.

    • by Tablizer ( 95088 )

      The trick is to get the Federal gov't to subsidize it, then vote "the tax-and-spend bums" out as a reward. Works every time.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      And they'd be right to do it, because 5000 dollars is way excessive to apply at once, much smarter to amortize the costs (which will usually be less than 5,000 dollars), over the life of the system.

      Y'know, the sane way to do things.

    • They did this for sewer hookup around parts of south-east Virginia when they decided one way to mitigate pollution in the Chesapeake Bay was to reduce runoff from septic systems. If electrical service and POTS service hadn't been regulated like they were, the same would have been true of them. I don't see the difference. -- you want the service, you're either paying for it up front or your taxes are paying off a municipal bond. Money has to come from somewhere...
      • Many, probably most, municipalities have hookup fees for water and sewer. There's an initial feel and sometimes an added amortization fee on your bill as well because even the per-user cost of building a water treatment plan is enormous. I think I heard that Blacksburg, Virginia's hookup fees are in the $25,000 per house range. Some places have a school fee (more homes = more students, statistically speaking) to help cover the cost of building out education facilities. With a typical 3-school strand costing

    • by Austerity Empowers ( 669817 ) on Tuesday November 04, 2014 @07:20PM (#48314189)

      I would pay $5k tomorrow for fiber provided that the fiber installed could be serviced by any number of providers that i can select at will, without contract or obligation.

      If comcast or att want it, I will not line up at town hall with torches and pitchforks, I will ram them up the offending CEOs more intelligent end while slapping the other end across the face with my terms of service.

    • by Kjella ( 173770 )

      Well the median US home costs $189k (pdf) [huffingtonpost.com] so a $300k home is far into the upper half, where customers can afford to be picky about what they want. It's not like it would bring $5k value to every home nor would it be worth as much if it were more commonplace. Right now it's a fairly exclusive feature that can add a nice premium because it specifically attracts tech-oriented people who want it. It doesn't take that much to make a bidding war on a $300k home go $5k further if it's particularly attractive to so

      • However those are also the people that many cities want to attract.

        One of the satellite cities round here is developing city wide municipal fiber and expects to have everyone connected in a few years time. I'm not looking to move at the moment, but it is a decent factor that will put them in the running for our next home.

        Personally I chose my current home, in part, because i could get 50mbit/s from comcast, 40mbit/sec from centurytel, good 4g and two fixed wireless providers. I'm also less than 20' from the

    • by Anonymous Coward
      Didn't the government spend billions to get fiber out there, and the Telecoms took the money and did nothing?
    • If you proposed a $5000 hookup-tax for internet You'd probably have most of the villagers at the town hall with pitchforks and torches. Funny how we want the services and value, but almost nobody is willing to pay what it's worth to get it.

      What if you proposed giving millions of dollars and local monopolies to telecommunications companies to improve their infrastructure and all you got in return was shitty service at astronomical prices?

    • Well 5000 amortized over the life of a 30 year mortgage is only like 20 bucks a month. Who in their right mind wouldn't pay an extra 20 a month for gigabit ethernet?

    • by AmiMoJo ( 196126 ) *

      $5000 is probably a huge under-estimate. A lot of people wouldn't buy houses that hat only satellite internet connection, or very poor ADSL. Some houses in the UK are more or less worthless because they can't get reasonable internet service.

      It reminds me of articles saying that Japanese Knotweed will take thousands off the value of your house. In reality it will make it worthless because most banks won't offer people mortgages on it and even if you pay to have it eradicated from your land it will just come

  • Do the study in a real housing market like DC or NYC or San Fran - then we'll see if the theory holds water.

    Some backwater with a 2.7% rise in values is definitely not worth the time to even research.

    • by TechyImmigrant ( 175943 ) on Tuesday November 04, 2014 @07:16PM (#48314157) Homepage Journal

      >Some backwater with a 2.7% rise in values is definitely not worth the time to even research.

      If that backwater had gigabit fiber and a $50K houses, I could buy 4 for cash and live there off the rental income from the other 3.

      I couldn't live there without the interwebs though.

    • You wouldn't consider paying a small amount more for gigabit? I certainly would.
    • by Shados ( 741919 )

      When I was looking for a place in Cambridge/Boston, the (few) places with FiOS access (as opposed to being stuck with Comcast) were sure to put it on the fliers or MLS descriptions. So I assume people cared.

      Of course, FiOS around here is arguably worse than Comcast, which is saying something, but at least you have options if you live in one of those spots.

      • by Anonymous Coward

        I bought a house seven years ago in the Boston area -- I was one of the home buyers who had been burned by cable companies sufficiently often that my wife and I agreed that we just wouldn't look at any house without FIOS. I'm sure it added to the cost, though since we considered it a "must have", we never bothered finding a similar house without it to see how much it added.

        We were definitely in the "well off, two-engineers-income" bracket, with internet usage patterns resulting from two geeky engineers; th

    • 300K for a home isn't exactly backwater
  • Meh (Score:4, Funny)

    by Anonymous Coward on Tuesday November 04, 2014 @06:59PM (#48314069)

    I'd still rather have a strip club nearby. Also ready access to marijuana.

  • Not surprised (Score:5, Insightful)

    by Kjella ( 173770 ) on Tuesday November 04, 2014 @07:01PM (#48314083) Homepage

    All those that talk about "location location location" really mean "the things you can't change". Interior, exterior, garden, floor plan, pretty much anything can be redone but you're stuck with your surroundings. And you're usually stuck with a crappy Internet connection. And despite most people not getting around to changing all they'd like to change, they kind of know they could. Things you can't fix tend to gnaw at you a lot more. I'm probably more Internet-addicted than the average person but I don't think I'd want to live at any place with <10 Mbit/s Internet. Unless it's a tropical island or something, then I'd make concessions. Or put up a big satellite dish, not really sure.

  • Does that mean Comcast et al will get the boot from more municipalities?

  • by dsginter ( 104154 ) on Tuesday November 04, 2014 @07:01PM (#48314087)
    I've often wondered why homebuilders aren't building fiber to the home and then coordinating with raw internet providers like Cogent. Add some mesh networking to support older adjacent homes and you'll finally kill Comcast.
    • by tomhath ( 637240 )
      They are, and have been for twenty years. Except for the part about killing Comcast, most people just don't care about that aspect.
    • Homebuilders are more interested in doing shady property deals with local government and sourcing the cheapest crappiest lumber. I don't think structuring internet services it really a big part of their mind space.

      I've seen home builders touting Comcast as a feature.

    • by mi ( 197448 )

      When renovating our rental properties, we paid for an Ethernet-jack in every room. The runs were terminating in a single closet allowing tenants to hook up to the DSL- or cable "modem" of their choice. Don't know, how much the feature helped us raise in rent, but pretty sure, it helped some.

      The "coordinating with raw internet providers" part, however, is made difficult — even for buildings large enough — by the regulatory burden imposed by the local governments [wired.com], who use their (unjust) power to

    • What does a homebuilder care about Comcast? $5000 for properly run, terminated, and coordinated fiber per house vs. $0 to offer Comcast. At the end of a small builder's 20 home year, means $100,000 different in the builders pocket (or boat, or vacation home, or wife's new boobs). I work with these people, and they don't give a shit unless it puts money directly in their pocket.

    • by AmiMoJo ( 196126 ) *

      Cost. It's the same reason they don't install solar PV or reasonable insulation or an adequate number of power sockets or ethernet/coax to every room.

  • Security and safety of my children came first, of course. Can the home(s) I'm looking at be connected to high-speed internet service was near the top of the list though. I have access to Cox and FiOS up to 150Mb, which meets my needs for the immediate future. Gigabit would be nice to have though...
    • by Nkwe ( 604125 )

      Security and safety of my children came first, of course. Can the home(s) I'm looking at be connected to high-speed internet service was near the top of the list though. I have access to Cox and FiOS up to 150Mb, which meets my needs for the immediate future. Gigabit would be nice to have though...

      When I purchased my house, I wrote availability of high speed Internet into the contract. This was 10 years ago at a time when the phone company would not tell you in advance if a particular address has DSL service available; the only way to know for sure was to put in an install order. My real estate agent whined that I couldn't put that in an offer, but I said, "Yes, I can. It is a contract and I can put in anything I want." I put it into the contract, ordered the DSL service, and once the DSL was turned

  • YouDontSay.JPG (Score:5, Interesting)

    by jtownatpunk.net ( 245670 ) on Tuesday November 04, 2014 @07:22PM (#48314197)

    I just bought my forever house and had a few beautiful places picked out but had to change my search area because internet access sucked balls everywhere in that area. At best, I could get "up to" 3mbps DSL at a couple locations. Now I know why prices were so much lower in that area. And the realtors I talked to said "What kind of internet is available?" is one of the first questions people ask these days. Of course, when I asked that question, none of them could answer it.

    So I shifted my search closer to The Big City where I got cable internet and almost as much privacy.

    As for the value of internet, I was ready to spend up to 10 grand to improve infrastructure to the right property so figure that into the equation however you will.

    • Don't you think though, with a "forever" house, waiting a few years for bigger, faster internet would be worth it?

      I think it's inevitable.

      • Plenty of people can't spend the next decade stuck on 3 mbps, while waiting for a rollout that they "hope" will come someday.
      • As usual, I'm ahead of my time. Human hibernation is still in its infancy so I had no practical way to "just wait" for communications infrastructure to catch up.

    • by Anonymous Coward

      And the realtors I talked to said "What kind of internet is available?" is one of the first questions people ask these days.

      Ugh, don't trust the realtor with that answer! I bought a $700k house in Seattle, and the real estate agent lied and said Comcast was available when I first looked at the house. I found-out after buying it that Comcast doesn't offer service to my house since their buried cable was damage and the city wouldn't allow them to repair it. I have no cable TV so I can't watch ESPN. I'm pissed about that. I'm more pissed about being stuck with dial-up. I can't afford to move just to get cable TV and Internet

      • Sue the realtor and the city.

        Well, maybe not right off the bat. First, see if you can get it on the local version of Bite Back with Kent Brockman and his Channel 6 Consumer Watchdog Unit. Generally, the cable company's monopoly contract generally requires that they service every household in [specified_area]. If there's cable in the ground, it's because your neighborhood is part of that area and the cable company is required to service it. The city can't require them to provide service then deny them th

  • So when Big Cable gets wind of my community considering putting in FTTH, and they invariably engage in their traditional filth-throwing, can I sue them for tortious interference because they're causing me financial hardship? Provided my house is technically "for sale" at the time, of course.
  • because the Man owns me #wageslave

  • I say why not. Obama is America's destiny.

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