Month: February 2005

The dailies report on Durel’s fax to BellSouth and Cox asking that they “get out of our way.” Both stories give background on the petition’s failure and report the aggressive stance taken by the administration. Here is a little taste from each paper:

From the Advocate: Durel asks companies to drop suit

Huval said he believes the companies are trying to make the project more expensive for Lafayette’s residents by running up legal fees and interfering with a bond sale whose timing was selected for low interest rates.

From the Advertiser: Durel wants fiber suit dropped

‘If they want to show the people of Lafayette they’re the good corporate citizens they profess to be and have been in the past, it would be the right thing for them to do,’ Durel said Wednesday.

The Independent interviews Durel; it is one of those interview stories that, for some reason, weeklies do so well. It is always refreshing to hear folks speak in their own voices–and Durel has a distinctive voice.

As you might expect, the story starts out focused on the fiber issue and does a good job of running through an overview and the basics of the current state of the conflict. It is well worth reading on that score. There is plenty for a citizen to read and think about concerning a number of local issues that do not relate to fiber. Go take a look.

But what is most exciting for fiberistas is the talk about a wireless play. Here are those excerpts; type in bold is the Independent questioner:

Are there any big-ticket items you plan on rolling out next year or in the rest of your term?

I would love for us to be the first parish — the first county in the country, I think — to become completely wireless. How we get that done is to be determined, whether it’s some kind of public/private partnership, with incentives for private companies. Nothing would make me happier in the next 12 or 18 months. I’m competitive. I want us to be first in everything. It’s all about marketing, in a way. It’s all about giving the national news media a reason to write about Lafayette.

In a question about the mayor’s business background and education, the following was volunteered:

My dream would be for us to make Lafayette Parish wireless and make every school, including the university, free to all the students in the school. Fiber is going to change things in the classroom. Maybe we can do some of those things, not because of my business background, but it’s that luck thing: opportunity and preparation meet, and we may have an opportunity to change things in education, or at least to benefit education.

Unlike some other pro-fiber and even pro-LUS partisans, I am an unrepentant advocate of the public ownership of public goods. I hope LUS does the wireless play itself and limits private partnership to the cell phone side of the picture. A wireless cloud over the city would be a truly impressive (and relatively inexpensive) addition to the fiber build. Of course, putting wireless in place in a form that could be used by more than a wealthy few will require fiber first.

I’ve fantasized about the possibilities of a wifi/cell phone “quintuple play” before. Adding that layer of mobility to the huge bandwidth potential of fiber with LUS in a position to integrate all three would enable the smooth delivery of advanced integrated services, such as programming your TV’s digital recorder from your cell phone. People in places where different providers with technologies that mesh only fitfully if at all will simply not reap the synergistic benefits that only the few folks with utility-based providers will have. Adding a wireless play will make it certain that Lafayette will be out in front of all its competitors in the race for development mindshare. Philadelphia got weeks of front page play by merely letting people know that they had this fantasy. A city with both universal fiber and universal wifi would really be unique.

What a lot of folks may not realize is that a wireless addition inevitably means a mobile phone option for at least the technologically sophisticated users. WiFi phones are being sold right now, mostly for use on the “campuses” of big corporations. More exciting—and what I am fervently hoping for—would be a partnership with one of the major cell phone companies, with LUS providing the in-system digital wireless connection and the cell phone company providing the national cell plan for out-of-Lafayette-parish calls. It would be another revenue stream for LUS, and since LUS would certainly be able to do it very cheaply, it would be another way to help local citizens save money. There could even be a “system only,” extremely cheap plan for folks who need only very inexpensive in-parish service; this could go a long way to bridging the “digital divide” between those with access to mobile telephony and those without.

It is likely that you’ll be hearing a lot more about this wireless option. Cell phone companies will not like it. Cingular, of which BellSouth owns 40%, is not likely to be happy, for instance, nor will any of the others–except, of course, that company whose partnership with LUS means a sudden, dramatic increase in market share.

We live in interesting times…

Dropping back into town from a very good Mardi Gras break, I came back to a welcome announcement of a formal request by the city-parish that BellSouth and Cox drop their lawsuit that attempts to delay or derail the LUS project.

You can get a look at both the press release and the formal letter of request online. From the press release comes the strong language that I am happily coming to expect.

The lawsuit and the petition drive are both tactics that have been used by the telecom companies in other communities. “It is clear that BellSouth has been the guiding force behind this petition drive since the beginning and now that it has failed they are using legal action to try to intimidate the citizens of our community,” said Huval. “It is a shame to learn that the corporate greed of these companies will stop at nothing to prevent our Fiber plan from succeeding.”

“Now that the petition is dead, we believe that if BellSouth and Cox are good corporate citizens of Lafayette, they should withdraw this lawsuit,” said City Parish President Joey Durel.

Trouble is, as has been noted previously, BellSouth and Cox are not citizens of this community—the people who live and work here are citizens and companies like BellSouth and Cox are our corporate guests. And not very good guests at that.

I don’t expect BellSouth and Cox to withdraw, since the point of this lawsuit was never to win–that always seemed like a long shot. The calculus that must be at work is that a couple of extra months of monopoly profits at maximum market penetration in a city the size of Lafayette makes even an expensive lawsuit seem like chump change.

It is all about the money for these guys.

I don’t think that the city really believes it likely that BellSouth or Cox will be good citizens in this instance. Instead, this is an opportunity to point out to the people of the city that BellSouth and Cox are not good citizens and do not have the best interests of the actual citizens of Lafayette in mind. The point is well-taken.

Kevin Blanchard does a good job of trying to unravel the intricacies of the law as played against the self-serving personalities of the petitioners.

I read the thing through carefully and it looks like the Fiber411 boys did themselves in by turning in their petition early. They want to believe they can come back later and add to the signatures on the petition but on Blanchard’s account the law is uncompromising: you can’t add or subtract from a petition after it is turned in. They’ll have to start over, even in the very unlikely case that some judge finds for BellSouth and is not overturned.

Take a look at the article though. The story is intricate and there are some fun things in it.

But the best part, from the point of view of a partisan, was another classic quote from Durel. It’s clear that BellSouth and Cox should not expect anyone here to back off:

“I call on BellSouth officials in their ivory towers in Atlanta to call off the lawsuit against the people of Lafayette and Louisiana,” Durel said. “We are more than capable of determining our own future without their intervention.”

2theadvocate.com: News – Fiber-optics vote petition fails 02/05/05

From a story at KLFY:

“Of the 2,791 names listed on the petition, only 1805 were confirmed as valid.

Registrar Charlene Meaux-Menard tells TV 10 whether petitioners were trying to get 15% of the parish’s registered voters or 5% of those who voted in the last election, there simply weren’t enough valid names turned in.

In light of the registrar’s ruling, petition organizers say they are unsure about their next move.”

This has been a comedy of errors from the very beginning.

Claire Taylor of the Advertiser reports: Petitions for fiber election fall short of 5 percent goal

“A petition drive to force a popular vote on the Lafayette Utilities System fiber optics project fell 45 signatures short of the 5 percent of city voters that organizers believe they need.”

The circumspect way that this is stated reflects (finally) an appropriate hesitation about what the petitioners claim, though Claire does not come right out and say it. The truth is that for these guys, even the easy way has turned out to be too hard.

They’ve been following the path described in a BellSouth/Cox lawsuit that finds a convoluted way to assert that they shouldn’t have to follow the so-called “Municipal Fair Competition Act” procedures that BellSouth and Cox agreed to just last summer. That act, agreed to by all parties, uses the standard referendum rules set forth in the city’s “constitution” — the city charter. That was just too hard to think about. Fifteen percent was just too tough, said the fiber411 boys. So they found a way around it that involved invoking a part of the bond law that the city was explicitly not using that called for only 5%. (The part they were using is the part that enables the type of revenue bonds they will actually be issuing and contains no referendum procedure.) That law refers to the issuing agency–in this case the city-parish. But that, too, was tougher than the Fiber411/BellSouth crew could be bothered with.

So they decided (though they’d been acting like they were working for a city-parish number all along) that they’d turn in the petition when they might have had enough if (and only if) the city was the proper venue. Why do that? Laziness and a doubt that, with the petition pulled off the BellSouth trucks, getting the remaining signatures would possible for the boys probably had a lot to do with it.

But there might well be more. One has to wonder if BellSouth wasn’t getting antsy. After all, they used the handing in of the petition as cover for their lawsuit. In went the petition. Out went the lawsuit, piously covered with a press release that said they were supporting the obvious desire of the people for a vote. BellSouth really, really, wanted to get their suit off in time to have a prayer of holding back the bond sale. And another couple of weeks might have been too late. So, conveniently for BellSouth, the lawsuit went in lacking the number of signatories that it needed under any reading of the law.

You do the math. The pattern is all too clear.

——————–

Update 2/5/05 10:00 I should have pointed to the updated Advertiser story this morning. But Mardi Gras happily got in the way. I highly recommend the Tee Mamou run. Fun and funny too.

The update is titled “Fiber 411 petition drive falls short” and carries a fuller story with more qoutes from various principals.

It’s worth a trip by Doug’s place, LUS Fiber To The Home (FTTH), if you haven’t dropped by today. He’s reproduced a commentary piece from the Wall Street Journal (a subscription site so you’ll need to travel to Doug to get it) that says plainly what every thinking person should know about the Bell companies’ unfair pricing. The author is mad at the Feds, as well he might be, but the root cause is the Bell network’s monopoly status, not the subsequent inept regulation. What does the author offer as a solution? You guessed it: “Fiber is being strung away from the telecos.” (He appears to look to a mesh network which would be fueled by that independent fiber. That might work if we didn’t also want to be free of our cable TV masters as well as our Teleco ones. FTTH!) Go over there. Read it. And then think about what the possible pricing for services might be here in Lafayette if we got really high take rates. Remember, LUS will have no reason to charge its owners monopoly profits.

While over there you can get another opinion piece not available online: Doug’s own. It was published in the Advertiser Wednesday and the Advertiser doesn’t seem to put such docs up in a timely manner–if ever. He notes that it was written before the lawsuit and prior to the petition being turned in. That’s reassuring. Go take a look and make your own judgment. I guess I’m in no mood to be conciliatory.

Blanchard in the Advocate offers an overview of the Chamber’s recent position statement on public vs. private investment. What’s most interesting about the article is to get the spin from Mayor Durel and Chamber President Picard.

Durel’s spin is positive, as you might expect. He thinks the city is right in line with these guidelines. Picard is relatively new as a visible player:

“Picard said it’s too early in the process for the chamber to take a specific position on the LUS fiber-optic project.”

You can only shake your head. Too early? The project is almost locked in place. Once the bonds are sold, it will all be over but the cheering. But regular readers have seen my take on this; there’s no need to go through the sorry story again. If you missed that post, it’s sitting in the archives.

A story in the Shreveport Times documents the other side of the cable-municipal “alliance” remarked on in the previous post. As satellite TV begins to carry local channels, one consequence has been that local stations are emboldened to demand some money from cable companies that benefit from carrying local and national network programming. Cox in particular has been refusing to pay one red cent to a corporate owner of multiple stations, Nextstar, and that has led to its customers across the country (1, 2) losing access to local channels and network programming.

Relevant pull quotes:

“Cox Communications Inc. will violate its franchise agreement with Bossier City by no longer airing KTAL-TV Channel 6, according to a letter the city is sending cable provider Cox Communications today.”

“City Attorney Jimmy Hall said Bossier City is acting to protect its interests and ensure Cox adheres to the franchise agreement. The U.S. District Court here has ruled that such agreements, rather than FCC rules, determine a broadcast entity’s obligations, he said.”

This is the sort of story that underlines the importance of local franchise rights in the current telecom market. Without this document to guard the interest of local viewers, the decision would be strictly an economic one settled as a battle between two large companies interested solely in their own bottom lines nationwide, with the interest of mere local citizens barely registering on the radar screens of the corporations.

The Lafayette side note is obvious: LUS will be carrying local stations. Once the network is built, it will be much less likely that Lafayette citizens will be caught as innocent bystanders in a gun battle between large corporations. Cox would be foolish to consider dropping local stations in the face of real, local, competition. And if they were to prove so foolish, the citizens would have a real choice: LUS.

Here’s the gist of the story:

The cable industry is reaching out to local governments to test whether they can forge an alliance to block Verizon Communications from waltzing into the cable business under liberalized state laws designed to accommodate the phone giant’s broadband-deployment plans.

Cable’s relationship with cities and towns has never been easy, and it probably reached its nadir three years ago, when cable backed the Federal Communications Commission’s decision to deny local governments about $500 million in annual cable-modem fees.

The National Cable & Telecommunications Association (NCTA) has launched a push to support towns and cities that want to maintain their rights to force franchise agreements with companies delivering cable TV and using public rights of way and poles in their communities. Since cable companies hate those very franchise agreements (and especially their universal service clauses) and seek to evade them at every turn, the initiative has provoked some industry commentary.

It’s interesting for us here in Lafayette too. Here’s a little conundrum for you: Why is the cable industry seeking allies with municipalities across the country to force regional Bell companies to abide by municipal rules while Cox is throwing its all into evading municipal rules here in Lafayette?

The easy answer that Cox and the cablecos don’t like competition is both correct and too easy; it doesn’t explain why the cable companies are suddenly engaging in this push. Cox, like every other effective monopoly, is anti-competitive by nature and design. What has changed? What do the cablecos see coming that moves them to action? In a phrase: real competition.

Until recently each cable company enjoyed an effective monopoly on the all-important local cable TV service in its service area. The telephone companies have provided some limited competition in broadband but can seldom match the speed or market penetration of cable in a broadband market that is still secondary for both types of companies. Satellite? No. National and even FCC studies have repeatedly shown that satellite “competition” may cost cable some customers but has yet to have the effect of lowering cable pricing—the essential marker of real competition. But all that is now changing.

Verizon has started to roll fiber to the home out at various (high value) points in its footprint and promises more. Everywhere its trucks roll fiber, it will be coming into direct, wireline-based competition with the cable companies. And the cable companies, wisely, are fearful. Fiber is, as the industry well knows, the path to expanded future revenue. Everywhere cable companies encounter fiber they find themselves going from having the network best positioned for the future to the also-ran company. It’s galling and hurts their pride.

What has changed for the national companies and what has changed for Cox in Lafayette are the same: fiber optic-based competitors are emerging — real competitors that could force them to lower prices and improve service. And that is what is worth, for the cablecos nationally and for Cox locally, opposing with all your might, even through alliances which are unnatural and necessarily temporary.



Update 10:45 1/2/05: Lest you think I overstate the case for it being “all about fiber,” you might wish to review “Cable Officials See Greater Broadband Competition Ahead” wherein the cable company engineers were told:

Referring to FTTH as “cable TV on steroids,” Farmer said the all-fiber networks offer much greater bandwidth and data speeds than cable’s existing HFC plant. He also noted that FTTH costs about the same amount as cable HFC plant to build but much less to run, largely because the fiber lines don’t need signal amplifiers and other active RF components that require frequent adjustment. “The maintenance and operation costs [of FTTH] are much lower,” he said.

The competitive advantage is real. Even the cable guys know it.