Month: November 2004

The Advocate covers the technicals of how Tuesday’s vote will be run in “LUS hearing curfew rules face council on Tuesday” to satisfy legal requirements of actual governance (LPUA) controls and bonding (the City-Parish is responsible). I could rephrase but Blanchard does a better job:

The LPUA, the governing authority for LUS, is made up of the five councilmen whose districts are comprised of at least 60 percent city residents.

The two bodies will officially hold a second public hearing on LUS’ Fiber for the Future initiative — the first was held Tuesday.

After the hearing, LPUA will vote on the proposal. After that vote, the council as a whole will vote on the measure. A majority of the membership of both bodies have made public comments seeming to indicate support for LUS’ plan.

It’s beginning to look like a movement, cher!

A major fiber initiative has been launched in Iowa. Backed by a list of some of the biggest names in Iowa–a telecom millionaire, former governors, university presidents and other notables-Opportunityiowa.org has launched an aggressive campaign to run fiber to 25% of the households in that very rural state.

Not only is the idea of such a large rollout aggressive, the attack launched on the incumbents is likely to give the idea of a preemptive attack a good name: check out their video promoting municipal utilities. It lays out a rock solid case for public ownership that is not compromised by any mealy-mouthed concern for the feelings of monopolists. The tag line: “A fiber line to your home and business can only be built by the community.” The video’s uncompromising position is that such essential infrastructure should be owned by the community.

This campaign bears the clear signs of being modeled on a similar state-wide network being built in Utah. Like Utah’s, Iowa’s network will connect local municipal utilities that build the fiber network in their town. The basic concept, again echoing Utah’s, is for the fiber to form an “open” network which any provider could use to provide services. Individual towns, however, may choose to provide their own services.

The essential issue in Iowa, as it is in Lafayette, is local control of natural monopoly infrastructure. Just a few months ago this was an unusual position to take; today it seems that it is emerging as common sense.

Both USAToday and TelephonyOnline have good stories on this event if you want to dig a little deeper.

Something-to-Consider: Within a single week Lafayette will have won its battle for fiber and Iowa will have launched a no-holds barred initiative that aims straight at the heart of monopoly power and advocates local control of essential telecom services. Look for this virus to become epidemic once local and state governments recognize that Utah, Iowa, and places like (gasp!) Lafayette, Louisiana are both winning against monopoly power, and gaining a huge competitive advantage over other locales in the race for information age jobs.

Post Script:

Can suggestions to use Lafayette’s muscular fiber build as the heart of a Louisiana fiber network similar to Iowa’s and Utah’s be far behind? I have had a continuing fantasy about that and even posted a brief reflection on that idea in an old blog entry saying: “I’ve always wondered what BellSouth and Cox were afraid of that warrants the thermonuclear level of response we’ve seen. A regional Louisiana fiber network linking cities a la Utah’s Utopia project might be part of it.”

I still think it is a good idea. If our state’s leaders can gather up the courage that Iowa’s show Louisiana could make itself over into the tech mecca of South.

If you’ve not got your glossy, tabloid-format “Fiber for the Future” informational mailer this week and are a customer of LUS you can expect to get it soon. It started hitting mailboxes in Lafayette the day before yesterday.

Big, beautiful, and professionally produced, the mailer was, we understand, originally intended to be an informationally accurate counter to an anticipated advertising campaign disinformation campaign by incumbents in the final month or two before the council vote. That campaign simply never materialized.

It now serves the equally useful, and certainly happier, purpose of informing the community about the potentials of a project that now seems all but inevitable.

Lafayette city residents can take a look at their own copy but for those of our readers who lie outside that ambit the Advocate story has an overview:

The front cover features Jim Prince, of Stone Energy Corp., and Bill Fenstermaker, of C.H. Fenstermaker and Associates — two proponents of the Fiber for the Future project — and a story about the impact the project could have on the educational system.

Other articles focus on impacts on health care, economic development and the oil and gas industry.

Or you can go to the newly revamped, equally glossy, Fiber for the Future website. From the homepage you can link to the pdf formatted newsletter (Volume 1, Number 1). I look forward to seeing a Volume 1, Number 2.

The Independent, in a calm and well-reasoned review of the risks and benefits of the LUS proposal, reiterates its support of the Lafayette’s fiber optic initiative. The Independent web site hasn’t been carrying its weekly articles so I will break with my usual practice of linking to websites in lieu of extensive quotation in order to give you a fuller taste of the piece. Still, it is worth going to one of the Independent locations to get a copy of your own.

Already, just the talk of LUS’ project has incumbent providers offering better technology and lower costs, and promising even more down the road—though neither Cox Communications nor BellSouth will commit to any long-term plans to bring fiber into households. And their copper alternatives will always have severe limitations in a world of infinite possibilities for the transmission of data streams.

…If this heavy dose of fiber comes close to meeting its goals, the system’s long-term benefits to our education, health care, and business systems could be huge.

…LUS has a long track record of success—and this project’s phased-in rollout allows it to pull the plug midway if numbers don’t add up. The worst-case scenarios that the project comes to fruition and latter fails. Considering that LUS has 55,000 electric customers the utility claims that it would only take each of us a dollar or so more on our monthly utility bill to pay off the $2 million annual debt.

It appears to be a risk that Lafayette is willing to take.

Amen to that.

Kevin Blanchard at the Advocate follows up on yesterday’s article about the city-parish council meeting with an article that focuses on the ground-level politics.

It covers city/rural politics, new estimates of the risks and benefits of the plan, changing technologies, and digital divide issues.

A good overview. Get it at the Advocate Online: LUS service fate in council’s hands

NOTE:

The section on city/rural politics includes a fairly serious typo; the story is missing a crucial “not.” It should (in my judgment) read, with missing not inserted:

Consultant Doug Dawson, who LUS hired to conduct a feasibility study on the project — and who has done several similar projects around the country — said that similar areas have [NOT] seen the “rate retaliation” that Badeaux described.

The “political pressure” against the companies would be too intense, Dawson said.

Dawson was clear on this; additionally it just isn’t the way that these corporations operate. They set rates for an entire region. The Public Service Commission would simply not allow BellSouth to mess with their rates this way. Cox would have to specifically single out communities near Lafayette to punish for Lafayette’s “bad behavior.” In addition to being clearly unfair (it isn’t their fault Lafayette is building fiber) it would be disastrous politics. Since they will not be able to raise, and will more likely lower rates in Lafayette, punishing the innocent will be painfully obvious. In response the smaller cities have plenty of great ways to “punish” franchisees who abuse their monopoly over landlines in this way. Of course, that assumes that they had any business left when the franchise was renewed–if Cox did something this in a region where I lived I’d cheerfully lead a movement to “patriotically” move to any satellite provider that promised to keep their rates the same as they were charging in Lafayette. Add to that the raw fact that, as Huval and Dawson noted, it would be an open invitation for LUS to move in and would prompt local municipalities to grant very favorable terms, allowing LUS to replace Cox. No. “Rate retaliation” has never happened and will never happen for good, solid reality-based reasons. No matter how badly Cox would like to scare particular councilmen about it.

Update 2:50 11/11/04:

Just got an email to the effect that Kevin Blanchard will be correcting the online version of the story. —So don’t be too surprised if you visit and find that all is well online.

The Wall Street Journal (free this week) confirms local suspicions that BellSouth’s threatening stance regarding offering a triple play (and more) in Lafayette is more hype than substance. In a story assessing how likely the Bells are to answer the cable companies’ move to offer phone services by providing video services says this about BellSouth:

…not every Bell is convinced that video is worth the multibillion-dollar investment. BellSouth Corp. has still not officially decided whether it will make a push into delivering its own video service and is concerned about the high cost.

“While there is a lot of excitement and buzz around video, we’re a long way away from making a decision on whether we’ll go ahead with it,” says BellSouth Chief Financial Officer Ron Dykes. He adds that the Atlanta-based company, which already has extensive fiber in the ground, will run trials this year and next.

Oliver’s anger over using quotes from retired employees to bolster LUS points was plain Tuesday night. But Dykes is not retired at all. I have to wonder what Mr. Oliver would say about this.

It’s hard to remain calm when the head office keeps on undercutting your position.

One interesting tidbit that I haven’t seen mentioned here or elsewhere is that Dawson, LUS’ consultant, had new numbers for the lowest take rates that would prevent the system from losing money that were down to 21%. In fact, a lot of the presentation was devoted to impressing upon the council just how small the actual risk of the venture is. That didn’t make for dramatic TV or interesting reading and so goes underreported but keeping in mind that the actual purpose of the meeting is useful: the idea, mandated by recent law, was to publicly assess the feasibility plan and decide whether or not to proceed on the basis of the business plan it describes. Financial tidbits like the break-even take rate are centrally important to making a judgment about the business plan.

If we focus on the financial risks and benefits the heart of the event lay in convincing the council and the public that the risk of failure is low and the chance of success high. From that point of view the event was a smashing success. The presentation was actually quite convincing that the upsides financially were great and the downside pretty minimal. But it is less the quality of the LUS presentation, effective though it was, than the response of the opponents that leads me say that LUS has won the battle of convincing the public that its plan can succeed.

An important thing that has gone unremarked is that last night, aside from BellSouth’s Oliver’s angry tirade, a new way of thinking about the issue emerged among opponents. Those who have been following the story will recall that the opponents have taken the condescending position that because LUS is a governmental agency it cannot, for that “reason” alone, hope to succeed against real “free enterprise” companies like Cox and BellSouth. This is faith-based, ideological reasoning and, as has been argued repeatedly on this site, runs head on into the reality of the market and LUS’ history as an technically sophisticated, efficient, and popular public utility. Regardless, the opponents have consistently argued that they are generously saving the city from itself; they are simply trying to keep the city from engaging in the losing enterprise of competition.

That idea had vanished last night. The new ideologically-based line is that it would be awful if LUS succeeded. The ideologues no longer want to save us from ourselves. They want to save us from LUS’ success. The worries focused on LUS’ successful competition (that it might eliminate Cox and BellSouth!), on its reluctance to allow competition over its own lines for the successful services it intends to offer, and on the concern that somehow LUS’ success would be unamerican. That’s a huge change—and weak stuff. It’s going to be hard to convince the public that they ought to fear LUS’ success.

In its own way Oliver’s tirade is another sort of confirmation that the ground has shifted to LUS. Oliver no longer is “reasonably” trying to save us from our own folly. He is now in full blown, burn the bridges, attack mode. He is claiming new weapons will emerge in the war to come and that BellSouth will compete aggressively, throwing everything they have into the fight. You can doubt, as we do here, that BellSouth will actually carry through with a fight that costs them more than words. But the reality of their difficult situation is not the subject of this post—the news is that rhetorically they have dropped most of their condescension and are treating LUS like the aggressive competitor it will be. BellSouth is treating LUS as someone you try and bluster and threaten into submission. And that, in its own way, is evidence that LUS has succeeded in convincing us all—pro or con on the construction of a municipal fiber optic network—that its feasibility study describes a business plan that can succeed.

In its own way Cox’s absence is part of that same shift. It is famously hard to interpret absence but the most straightforward interpretation of Cox’s no-show last night is that they felt they had nothing to gain by arguing with the feasibility study’s methods or conclusions. My guess is that they judge this battle already lost and their contempt for the community runs so deep that they are no longer bothering to even address their objections to the people. I have no doubt, no one who has followed this could have any doubt, that Cox will continue to fight. But it is significant that they do not choose to even argue with the feasibility study.

The take-away message is this: Everyone agrees that LUS’ fiber optic project is doable. That is no longer at issue. All that is left to decide is whether or not your interests are best served by allowing LUS to succeed.

The incumbents clearly have taken a position against allowing that success to mature. And ideologues agree, for their own reasons, that LUS success would be a bad thing for the ideas the hold.

But the real question is whether the council and the people think LUS should be allowed to succeed. In reality, I think that question has been answered as well.

I sure hope I am in one of the areas that gets fiber early. Where do I sign up?

The Advocate covers last night’s fiber optic plan public meeting and does a good job of hitting the high points. The Advertiser has a story too, but it has yet to make it online. In this instance there is little there that is not also in the Advocate.

Take a look.

By far the most interesting part of the Council meeting was the Councilmen’s Q and A session. One got the feeling that a lot of the Questions were “for the record”—designed to get objections or points put on the public record.

Still things did come out.

In response to councilman Badeaux’s concern over the rural parts of the parish there was a bit more discussion of what it would take to move LUS out into the parish and the possibilities of partnering with other utilities to take advantage of LUS’s telecom backend investments. Dawson mentioned this was already happening in Bristol; a fact which no doubt adds to the incumbent’s fear and loathing.

Benjamin pushed for an assurance that the rollout wouldn’t abandon his Northside, black constituents till last and received a rundown on the topography of the new network. Apparently it will be designed around hubs located at each of the 14 electrical substations and two will be chosen for the initial rollout that will represent samples of all of Lafayette. The idea is to sample take rates and the sorts of bundles that sell best in each category. Wouldn’t you like to be in the first two segments?

Williams pushed the digital divide issue and extracted a promise that LUS would come before the council with a plan six months after the plan is approved. Williams could have been happier and clearly would have liked some gesture toward that in the feasibility study. Perhaps LUS wants to delay this until after the approval so that it can have a public discussion of how to best proceed without incumbent sniping on the plan. I hope. LUS has apparently talked to Dell, HP, and Sun about using older computers on this and I know they’ve considered leasing computers. Both Huval and Williams are right about there respective points. Huval points out that the really intractable part of the digital divide is making the monthly service affordable. LUS promises to really make it cheaper and that can be a huge thing–a user could buy a triple play for the price they were previously paying for phone and cable, getting the internet basically for free. But Williams is right too: without a computer that is useless. Getting a computer into the hands of folks who have a hard time affording their monthly phone bill is also essential to overcoming the digital divide.

Broussard wanted a better sense of what the offerings would be. I don’t get the impression he got what he wanted but he did receive confirmation that the 85 dollar package that has been bandied about is the middle tier. There will be a more expensive as well as a less expensive one.

Interesting, all in all. I’ll leave the rest for the papers. Night.

I went to the council meeting while Mike diligently blogged from home. It was interesting actually being there. I had attended earlier meetings where the feel was very different. Those times there were noticeable cliques of people dressed in office attire sitting in clusters and a row of Cox employees in uniform lined up across the back. This time, for all that this is a more important meeting and one that invited public input, there was no feel that the troops were lined up. The audience was sparser, the clusters smaller, and the folks that were there were mostly self-consciously dressed up in their formal suits.

Not only was there no Cox contingent lined up across the back of the chamber, there was no Cox at all. No speaker objecting for Cox, and no one to question Dawson on the details of his plan. Nor did BellSouth question Dawson.

Except for Oliver’s lecture (on which more later) and one other BellSouth employee the time reserved for public comment was mostly consumed by ideologues—men lecturing the council on how it was wrong, just wrong for Government to be competing with “private enterprise.” There were advocates, but they got in and out quick. Not so for these opponents. Folks stood reading from notes clearly carefully typed up before the meeting that asked questions answered in the presentation or assumed as facts ideas clearly put to rest in the council’s Q and A session. That part was a little surreal. There was a strange hollow energy about the ideological presentations — almost to a man (and they were all men) they grudgingly admitted that this fiber stuff was all well-motivated, the council trying to do their job, and LUS was a well-run utility. The BellSouth employee even fumbled through an endorsement of Huval as the man he would most want to head up any project he was involved in before moving on to the standard note about how scary the telecommunications business should be for the council. They seemed to know that they were going through the motions and only the true believers felt compelled to soldier on. Any humor came from LUS and especially Huval. The night was grim for the incumbents.

Only in Oliver’s lecture did we see that old incumbent fire and spirit. Oliver came out swinging, issuing dire warnings and thinly veiled threats. It was bracing. He promised competition; he changed BellSouth’s triple play to a “Grand Slam” with the addition of a wireless play from Cingular. That Grand Slam play was actually interesting if a fairly obvious ploy—it is something all the Bells with wireless arms have been discussing. Shoot, even the Cableco’s can see that coming and are reportedly partnering up with cell phone companies to answer that shot already (Cox included). But too much of Oliver’s presentation was bluster–at one point he made the heated but clearly untrue claim that the FCC had ruled that “fiber to the curb, our plan, was functionally equivalent to fiber to the curb, our plan.” This is just plain silly and the earlier LUS presentation had dealt with the differences between FTTP and FTTC explicitly. At the end he undercut his stentorian presentation (his cadenced repetition of “out-of-date because…” would have made a drama coach proud) by lashing out at a quote attributed to a former BellSouth leader by Huval. At the moment few in the room knew which quote he was referring to but his frustration and anger were clear.

One part of Oliver’s lecture made sense of the rumors we’d heard of a meeting between BellSouth and Durel, a meeting which evidently included LUS as well. Apparently it was not, as Mike had speculated a meeting at which BellSouth explored possibilities with LUS as a defense against Cox. No, as Oliver informed the council, that meeting was set up to read the riot act to our local representatives, to threaten them with fiber to the curb, a Cingular cell phone bundle and the ominous promise of unrelenting competition.

I’ll only say what I’ve said before: Fiber to the Curb is not the equivalent, functional or otherwise, of real fiber. It will never have the same capacity and it will be strained to put High Definition TV on the table beyond a very few channels. The threat is bluster. And if the incumbent’s generally frustrated demeanor is evidence they know that the council knows it is bluster as well.