Bond, The Digital Divide, and Trust

The most contentious issue of Tuesday’s historic council meeting was the digital divide—the cluster of concerns about the way in which modern communications technologies have served to increase the gap between those that have in our society and those that do not. Dealing with that, or rather not dealing with it, has been the dark underside of glowing promise of our new, high-tech information society. Both two weeks ago and again last Tuesday Huval gave personal assurances that a plan that would satisfy those concerns would be developed in the next six months. The Advocate story had one bit of information that may prove politically crucial:

By January, LUS will likely ask the council for permission to ask the State Bond Commission for authority to issue the $111 million in bonds, LUS Director Terry Huval said.

This means that the vote on issuing bonds will take place before the date for the submission of a full plan for dealing with the digital divide issues. Agreement that those issues would be dealt with were crucial to the plan moving forward with near unanimity. Both the council and the public commenters showed strong support.

The bonds need to be issued as soon as is humanely possible since bond rates are rising. Each day of delay adds to the cost. Interest will be, as it is on any mortgage, by far the largest cost. Each extra increment of interest results in higher minimum prices for services. It is in the interest of all to keep the costs as low as possible and so it is in the interest of all to hope the bonds can be issued as quickly as possible for as little as possible.

Any thorough-going attempt to address digital divide issues will have to take longer than three months. It will, frankly, take longer than six months. Starting the process now is an unfortunate by-product of LUS defensive posture during the fiber fight here in Lafayette. A series of public meetings on fiber, which would have been the ideal way to have developed the project in the absence of unprincipled incumbent opposition would have brought this issue to the fore much earlier. The process of dealing with it now will be a matter of human timing and street level politics; not engineering. It can’t be hurried and remain effective; it simply takes time to build the human relationships that are crucial in an endeavor this new and important. Because the issue is barely on the radar of most of the community bringing them up to speed and even getting started bringing people from different communities will take time.

So come January we will be faced with a vote where the strongest advocates of bringing our community together with a digital divide project will have to vote up or down on the whole project with, at best, only the barest outline of a real plan in place and the actual quality of the plan still building. There will likely be a couple of projects written into the budget that goes to the bonding authorities. What won’t be in place at that time is the sort of unified, established and ongoing community effort that at least two councilmen pushed for and which was endorsed time and again during the public comments: A fully realized commitment for the community coming together to advance backed by publicly visible leadership and money.

When push comes to shove it will be a moment for trust. I think Mike in his blog entry on the meeting hit the nail on the head: in the end the council vote was, as much as anything, a vote to trust Terry Huval, the crew at LUS, and the history of the utility.

More trust will be what is called in January. Mustering that trust will go along way toward telling us whether fiber has actually begun to serve as a catalyst for community unity and progress that some of us hope it can be. DSL Is In Danger Of Losing Out To Cable

A theme hereabouts has been that the unnatural alliance between Cox and BellSouth is a marriage of convenience, and that the short end of the stick is held by BellSouth. (How many metaphors did I just mix?) BellSouth’s fiber to the curb strategy is not going to work as advertised as the technical analysts have been saying for some time. The financial analysts are beginning to to take note. (I see as I log in that Mike has pointed to a more extensive analysis at the Wharton School of Buisiness and pointed out the implications for our case. Good Stuff.)

From the guys at Deutsche Bank:

“The undeniable truth is that DSL is in danger of losing the early battle to cable,”

“We continue to believe operators emphasizing FTTP [fiber to the premises] should be better positioned over the long term, with FTTN [fiber to the network (sic: node)] and other solutions second best.”

Clever fellows, those Germans.


One simple comment:

One of the more frustrating elements of the fight for fiber in Lafayette has been the unreflective presumption free enterprise purists that Cox and BellSouth, by the simple fact that they are privately owned, are somehow smarter, more nimble, and just plain better businessmen than the guys at LUS. ‘Tain’t so. And it was bad logic to ever think so. LUS is right about Fiber To The Home and BellSouth will pay the price throughout its footprint if it persists in believing that some future, as yet unrealized technology will save its Fiber To The Curb strategy from the coming deluge of bits that is HDTV. Praying for salvation is not a business strategy.

It is huge, monolithic institutions, of whatever ownership structure that tend to be blundering, self-assured, hives of incompetence that make business decisions that only make sense in terms of advancing in the bureaucracy. It is small, nimble, businesses that are close to their customers that tend to make smarter long-term business decisions. We are lucky to have one of the these in Lafayette and “free enterprise” purists would do well to think their position through more carefully. They’ve missed that the essential quality that they admire is found in businesses that are small, sharp, local, and have a rock solid commitments to their customer base. These are the “mammals” of the economic ecosystem. Cox and BellSouth are the dinosaurs.

Truth from Knowledge@Wharton

This is a great article from the University of Pennsylvania’s Wharton School of Business eletter, Knowledge@Wharton.

It looks at the decision by Verizon Communications to invest heavily in fiber to the premises technology — the same technology that the Lafayette Utilities System (LUS) proposes to roll out in Lafayette.

In the process of reviewing this decision, the professors and analysts quoted provide a clear-eyed picture of the challenges facing the Regional Bell Operating Companies (RBOCs), like BellSouth. The article blows huge holes in the pitch by the BellSouth Louisiana team that somehow they can get their DSL infrastructure to support video deployment in a way anywhere comparable to the kinds of service available over cable systems. The notion that this fiber-to-copper based technology (DSL) is (or could ever become) the near equivalent of fiber is laughable.

Overall, the article is yet another powerful validation of the LUS infrastructure strategy. It also reinforces the point I’ve been making here: the RBOCs (and BellSouth is ours) face considerable challenges that leave no inexpensive, low-risk way out.

Knowledge@Wharton is a free eletter. You may have to register to access the article, but it’s well worth the effort. Besides, by registering, you’ll get this always useful eletter sent direct to your own email box every week or so.

History in the Making

Like John St. Julien, I spent about six hours in the Council Meeting room at Lafayette City Hall last night watching, listening and participating in (for under three minutes) the discussion over whether the Consolidated Government Council would vote to move ahead on the fiber to the premises project that Lafayette Utilities System (LUS) has been evaluating.

It was a long, but worthwhile night. I was happy to go, though I’d watched the first of the two public hearings on the feasibility study via Acadiana Open Access last week.

What follows are my impressions from the night’s events. It’s not a news story and it’s not a compilation of notes. It’s just what I saw, heard and felt while there.

Perhaps the most startling thing about the night was the near total absence of substantial opposition to the LUS plan. BellSouth had a rep in the audience. I heard Cox did, too, but I didn’t recognize that person.

There were 3.5 opponents to the plan.

One opponent based his opposition on the ideological notion of reserving projects like this for the private sector. The fact that no private sector company has expressed any willingness to undertake such a project in Lafayette didn’t shake this opponent’s resolve. He thinks a fiber network like this is a great idea, but his belief is that government should not be doing infrastructure work like this.

The second opponent to the plan based his opposition on what I believe to be a fundamental misunderstanding of the capabilities of wireless technology and a fundamental misreading of the forces driving bandwidth demand. This person is happy with his DSL and believes he will be so for the foreseeable future. Should the day come when DSL does not meet his needs, then he thinks a free Wi-Fi network would pretty much take care of things.

In my view, he’s wrong on the wireless capacity issue because the emerging bandwidth needs driven by HDTV alone will outstrip the capacity of the most robust wireless technologies within a couple of years, when broadcasters are forced to switch to HDTV signals and cable systems are forced to carry those signals. These signals are capacity hogs. Theoretically, in homes with a single TV, a robust wireless network powered by, say, Wi-Max might be sufficiently robust to handle those signals. But, what about other network services such as telephony and Internet services? Where will the bandwidth for those services come from? Yet more infrastructure?

Current estimates are that home bandwidth needs within five years will reach the 100 megabit range. No distributive wireless network technology today has the capacity to meet that need.

What is driving that bandwidth demand growth? More robust programming, like HDTV, online gaming, and other emerging technologies that are tied to the entertainment industry.

As was explained at last night’s meeting, no information infrastructure is more adaptable or more scalable than fiber optic lines like the plan being considered by LUS envisions. Upgrades take place via equipment at the ends of the network, not to the network itself. As I pointed out in my brief remarks, the phone companies and cable companies are validating this fact every day with the billions of dollars they have committed and are spending on new networks which are ALL based on fiber infrastructure. Wireless can be an adjunct to fiber but it can never replace it.

The third opponent based his opposition to a reading of a 1965 LUS bond covenant which he interpreted to read as requiring competing entities BellSouth, Cox and others to leave the telecom business once LUS gets into it. The city/parish bond attorney said that was an incorrect interpretation, that it applied only to electric, water and waste water services that were part of the bonds sold under that specific covenant.

The half opponent wants to see LUS partner with private sector providers in building the system and providing services. The fact that LUS will continue its wholesale bandwidth operations for companies selling to large businesses apparently is not a deep enough level of private sector involvement. The most telling argument against this kind of public/private partnership came from LUS Executive Director Terry Huval, who cited problems associated with similar partnerships in other communities.

There was another opponent to the plan, but I apologize for not catching the drift of his criticism of the plan.

I considered leaving after hearing after John testified, but decided to stay and be present when history was made by the council.

Before the vote came, each of the councilmen made a statement about their views and their vote. It was clear that they all took the issue seriously and had devoted a great deal of time on their own researching this issue, particularly what this kind of infrastructure will mean to Lafayette’s economic viability and to the creation of opportunity here. They also had listened carefully to both the opponents and proponents of the plan.

What was abundantly clear — and what was stated plainly by a number of council members — is that it is the track record and credibility of LUS’s leadership under Terry Huval that carried the day over whatever lingering doubts any of them had about the project. Huval and his team carried the council and the expectation is that they will carry this system — and this community — to success down the road.

At 11:15 p.m. — five hours and forty-five minutes after the hearing started — the council voted 8-1 to accept the feasibility study and to begin the detailed engineering that will result in a business plan.

It was a momentous occasion and one that I believe will be looked back on in years to come as a significant day in the history of this community. I was proud to be there.

Local Media Reports On Council Vote

Apologies for the late media posting. A late night last night 🙂 and lots of stuff to catch up on this morning are my only excuses.

The best story today is is in the Advertiser. (Council passes $110.5M fiber plan) Good, clean reporting and they troubled themselves to do some nice sound bites from those speaking in the public comments section of the program. I’d like to have heard some reporting on the explanations each council member gave for their vote since that is what will be truly consequential in long run.

The Advocate went to press with its story (Council debates LUS network) before the vote was taken but there are still worthwhile things to look at, particularly concerning Mayor Billings of Provo and the attendance of State Treasurer John Kennedy who is chairman of the State Bond Commission.

KATC has an online story as well (LUS Fiber Plan Approved) to which they’ve attached a video. Kinda fun but funky javascript, low res, and a clogged Cox pipe to my home lower the its quality. We know how to fix part of that equasion.

Lafayette Steps Up and Steps Forward

At 11:07 on November the 16th Lafayette entered a new era. The first vote enabling LUS to move forward with a fiber to the home system passed with but one dissenting vote.

Ok, maybe 11:07 wasn’t the exact moment when that happened. Maybe there was a long series of obscure votes on various resolutions and ordinances by confusingly constituted bodies that voted twice on all the crucial stuff just to make sure that all the bases were covered. Maybe that is what really happened. But I like the symbolism involved with the 11:07 time. Lucky numbers, you know.

The night stretched on, and on, and on. We saw all the presentations we saw last Tuesday again. Apparently Act 736 requires it. Then we saw some of the same people asking the same (or ones that were indistinguishable from the same) questions we heard last week. And we saw a repetition of opponents getting up and praising LUS and praising fiber but not like the idea of putting the two together. Some things did change a little: last time only one incumbent came; this time no incumbent bothered to register an objection. We got a few opponents saying out loud what I inferred last week: that what they really feared was LUS’ success. If LUS was successful they feared that the competition would run Cox and BellSouth out of town; or, unaccountably they feared that such success would just be, somehow, wrong. That the opponents were reduced to praise of LUS and fear of its success is an amazing indication of just how weak the opposition has become. The opposition has ended not with the fireworks I would have once expected but with a whimper.

The biggest change from last Tuesday was the almost unanimous support from the community: A large crowd waited into the night, five and a half hours, to watch the historic proceedings and a fair number—25 by one count—were there to speak before the council. They were, mostly, impassioned and were, mostly, whole-heartedly for the fiber initiative. The few who spoke in opposition remarked on just how rare they were. At least one came to the podium clearly having intended to blast the project but admitted to having learned things that gave him pause during the hours he waited to speak.

The surprise of the night was the reappearance of Mayor Billings from Provo who flew in this afternoon, came to the council meeting, complimented our food, passionately plead our cause, was called to the podium repeatedly to answer questions from the council members, and sat through the whole thing. He saddles up and flies out again early in the morning. He had to miss that good Louisiana dinner he had more than earned. The man deserves a medal. I hope someone will at least serve him breakfast.

But the council vote made the whole thing worthwhile. Delicious. It really does usher in a new age.

Now we just have to decide what we want that age to be.

Media Roundup/Digital Divide

The Advocate and the Advertiser both run the expected story on tonight’s council vote, both outlining the procedures, and pointing to a yes vote. The Advertiser has a bit more, revealing Councilman Williams’ threat to vote no unless some sort of explicit provision to provide remedies for the digital divide issues that concern him are included.

I hope that is all grandstanding. I’ve done some work in this area and LUS is correct when they say that the most intractable part of the digital divide problem is availability and the price of access. What LUS has promised in a rock-solid way to do in terms of universal service (everyone will have access) and price (a substantial cut in prices) will accomplish in one stroke what has led to the failure of many otherwise well-designed projects to narrow the digital divide. Voting against this would mean the councilman would also be voting against cheaper cable access for his folks. It doesn’t make sense. I’d have been happier seeing some sort of language in the feasibility study and it not being there was a real political mistake on the part of LUS; it was one of the things I went looking far as well and was disappointed not to find after the early promises. Of course, the shape of our feasibility study was a result of LUS adopting a defensive posture about putting anything substantial that was not required in the feasibility study. That seemed unwise to me at the time, and I said so. This fracas is one result of that decision. Still, it is my sense that LUS can be trusted on this. They have shown initiative about getting outfront with innovative ways to provide price relief for poorer families on the electricity front—a point Huval pointedly made in an exchange with Williams last Tuesday, and which Williams conceded—and it would seem that this would buy LUS some credibility on this issue.

On the other hand, I’d like to see LUS give Williams something to take home since they’ve promised, and I believe intend, to address this issue. The problem is that it is hard to see just what the mechanism would be—this is supposed to be an up or down vote on accepting a feasibility plan that has already been deposited and this process is fairly tightly regulated by state law.

I just hate to see a game of chicken being played with this issue. It is far too important.

Cox to BellSouth: ‘Are you choked up over my new services, or is my foot on your throat hindering your breathing?’

This is the press release Cox Communications issued regarding their announcement on Monday that they are rolling out Voice over Internet Protocol (VoIP) phone service in Southwest Louisiana.

It’s good news for customers because it will lower prices and make innovative services available to them — particularly to businesses.

We’ll have entries on local press coverage of the announcement, but this release is of interest (despite the typically self-serving stuff that constitutes state-of-the-art corporate press releases) because of the link to this PDF which provides some of the technical explanations of Cox’s VoIP system.

Wanna geek up on VoIP? That PDF is a good place to go.

Uh, Mister Oliver. SBC says Fiber IS The Future

I’m almost to the point of pitying Bill Oliver and the gang at BellSouth Louisiana these days.

Here’s a very condensed listing of the problems their erstwhile partner in opposition to the LUS fiber to the premises plan (Cox) is causing them:

For starters, Cox is rolling out new services that, frankly, just run circles around anything BellSouth can offer over its current infrastructure. The new Cox telephone service is targeted for a direct hit on BellSouth’s marketshare.

Then, there is the fact that Cox (along with other major cable companies) is also considering a cell phone venture that could give it yet another service to bundle at BellSouth’s expense (this, after BellSouth borrowed a couple of billion dollars more to finance its part of the Cingular buyout of AT&T Wireless just before the first public hearing on the LUS plan last week).

The extent to which all of this appears to be rattling BellSouth cages was hinted at during Oliver’s speech to the Parish Council in opposition to the LUS plan. His voice dripping with sarcasm and contempt, Oliver said that the BellSouth VP who extolled the virtues of fiber was no longer with the company. Apparently, at BellSouth (as in some certain other venues), you’re either with ’em or against ’em. With the VP now consigned to the “ex” file, Oliver indicated the argument in favor of fiber went out the company with him.

Ah, if life was but so simply controlled. Unfortunately for BellSouth and Oliver, there are trends that all the spinning by the company’s formidable lobbying machine (which works so magically on Louisiana’s Legislature and the Public Service Commission) can’t alter.

One of those stubborn facts is the emergence of fiber as the infrastructure of choice for modern telecommunications. Oh, don’t take our word for it. Don’t take LUS’s word for it.

Take the word of BellSouth’s senior partner in the Cingular Wireless venture, SBC.

The Houston Business Journal had a story on its website on Monday which dealt with an announcement by SBC regarding its intent to begin offering Internet Protocol-based television services over its new network by the fourth quarter of 2005.

Did I mention that this new network will be all fiber? Here’s what the SBC folks had to say:

SBC expects total build-out will be complete in 2007, as previously projected, and the company should be able to market its full-range of Internet protocol-based voice, Internet and high-definition television services to 18 million households by the end of 2007.

The move allows SBC to challenge its cable television competitors, which have been making in-roads in the Bell territories by offering local telephone service and high-speed Internet access.

“Project Lightspeed provides a number of important advantages – including superior speed to market with exciting, market-changing services, and it allows us to leap-frog today’s U.S. telephone and cable TV networks,” says Lea Ann Champion, senior executive vice president of SBC IP operations and services.

“Over the past several months, SBC teams have put intense study and careful analysis into this project,” she adds. “Our deployment schedule is achievable. Our approach is capital-efficient and financially disciplined, capable of delivering positive returns on investment with conservative penetration assumptions. We are very confident in our ability to execute and make solid progress in the months ahead.”

SBC will build out this network using two technologies – fiber to the premises (FTTP) and fiber to the node (FTTN).

OK, so the SBC network won’t be quite as advanced as the LUS network in all places (like Cox, they’ll do fiber to the neighborhood node in existing neighborhoods), but it will be based on fiber — and, in new developments, will actually be about equal to the LUS fiber to the premises project.

The point here is that SBC is validating the LUS approach of fiber-based infrastructure with its own investment of $4 Billion. And, they’re in a hurry! They want to roll the whole thing out by the end of 2007.

Despite the fact that BellSouth and Cox lawyers and lobbyists are plotting to delay the LUS plan by whatever means possible in the courts and at the PSC, it’s likely that the LUS fiber roll out could actually be well underway by that SBC gets it’s infrastructure project rolling.

At the end of the day, if the Consolidated Government Council gives its approval to the LUS plan, the municipally-owned utility will deliver fiber to every home and business in Lafayette. At that time it would be interesting to know just how much money BellSouth and Cox will have wasted in their efforts to stop this project and how that money might have been put to better use — perhaps by upgrading their infrastructure and services? — instead of paying lawyers.

LUS fiber plan faces crucial vote Tuesday

The Sunday Advertiser runs “LUS fiber plan faces crucial vote Tuesday” as its Sunday headline. All in all it is pretty thin gruel. The story reviews the history, summarizes the plan, and covers the arguments of the boosters and opponents is the “he said; she said” fashion that has come to pass for objective journalism.

Though it may not matter much to the reading public, the decision to run a local story as the “Sunday Headline” is a significant one for those who work at a daily newspaper. The decision to present the fiber optic story as the story of the week makes sense. On a local level it is arguably the story of the year in its potential to shape the future. It is hard not to wish for a more muscular, in-depth piece that opens the issue up for examination by the public in addition to simply reporting the latest back and forth. If the story is worth the Sunday Head it is worth a little more work effort at this time to fill out the story and help readers understand what has and has not been credible in what has been said by both sides over the course of the story.

Still, taking this for what it is rather than what it could be, it isn’t a bad little summary and is worth the read as long as you are careful not to take the he said, she said portions too seriously.