Month: May 2005

An editorial in Tuesday’s paper carries some news that should reassure those that secretly think Lafayette really isn’t up to this technology thing. In a study where a perfect score was 100,

“Lafayette received an impressive entrepreneurship score of 91.6. It ranked 117th in the average annual number of new firms per 1,000 workers. Lafayette ranked 49th in the percentage of firms growing rapidly. The city has reaped rewards by cultivating an identity as a technology center.”

That 91.6 is the highest ranking in Louisiana. Baton Rouge got a 75 and New Orleans a 53.1.

isen.blog, one of the more widely quoted reviews of technology on the web, reviews the latest push poll and relates it to the battle of the tri-cities.

Maybe there’s a better name for the practice of push polling. Maybe it should be called, “Fraudulently, deceptively and systematically planting damaging misinformation.” On the other hand, considering one slang meaning of “push,” maybe not.

The opponents of Lafayette, Louisiana’s municipal FTTH project (BellSouth and Cox — the incumbent telco and cableco) have sunk to push polling. It is not the first time that incumbent-backed anti-muni efforts have slithered in such slimy disinfo; a 2004 push poll in the Illinois tri-cities region asked…

Go take a look. It’s entertaining to see what others are saying.

The venerable Consumer’s Union is the familiar producer of reliable ratings of everything from toasters to cars to “lawn tractors” (current best buy lawn tractor: John Deere L111/L118/L108). The organization is funded by its members and so is beholden only to them. Its no-advertising magazine, Consumer Reports, is known for its dissection of the value of a product for the consumer; its ruthless exposure of which “features” are worthless sales gimmicks; and its implacable record of the repair and failure frequency of major consumer products. Want to know who makes the most trouble-free car? This is the place to go.

All that is to say: these guys are on your side. They don’t have to toady to advertisers and aren’t a commercial product in some large media conglomerate’s holdings that might find it “improper” to criticize another product owned by its masters. They are fearless and are solely in the business of watching out for the consumer’s interests; your interests.

So when the Consumers Union goes on a tear about a consumer issue, it’s something worth listening to. And they’ve gone on a tear about your cable bill. Want to know why your cable bill is so high? The Consumers Union, in a report, CABLE MERGERS, MONOPOLY POWER AND PRICE INCREASES, tells you in no uncertain terms why: The cable companies are a local monopoly and they charge monopoly rents. (In a sense, it’s not their fault. They are natural monopolies–but the effect it has on your pocketbook is the same.)

What you need to know:

Cable operators are blaming the rate increases on a number of things in an effort to hide the underlying cause – the greed of the nation’s most persistent monopolists in the midst of a costly and anti-consumer merger wave. In keeping with justifications used for previous price hikes, they are blaming programming costs and capital investments needed to make new services available. Those claims simply do not withstand scrutiny…

It’s not programming costs. Don’t believe that your rate increases are attributable to ESPN and HBO…

If costs were really the cause of rising prices, then the cable industries’ operating margins -– the difference between its revenues and costs — would not be rising. The facts are just the opposite. Operating margins have been increasing dramatically since 1997 (see Exhibit 2)…

The ability of cable operators to raise rates and increase revenues, even with rising programming costs, stems from the market power they have at the point of sale. They would not be able to raise prices and pass program price increases through if they did not have monopoly power.

Besides, maybe high-priced channels don’t really bother the cable companies all that much:

One can also question the vigor with which cable operators resist program cost increases. Approximately 40 percent of the top channels (measured by subscription or prime time ratings), which command the highest prices, are owned in whole or in part by cable operators or companies that have large ownership stakes in cable companies…In other words, for a substantial part of the industry, rising programming prices are just a transfer from one subdivision of the cable company to another, which comes out of the consumer’s pocket.

You’re getting this, right? Even the cable company’s best excuse, rising prices, is a dodge. The cable companies own almost half of the expensive channels they claim are forcing them to raise your prices.

But you will, with some fairness, say: cable companies have poured huge amounts of money into networks. True, but they did it to develop new services for which they fully intended to charge. And that is working:

Another claim by cable operators is that they need the increased profit margins to pay for the system upgrades that are being put in place. Again, by looking at revenues we find that this argument does not stand up.

The digital upgrades are intended to make a new range of services available. By selling these services, the upgrades pay for themselves (see Exhibit 4). If we compare the build up of capital expenditures (a large part of which is claimed as a cost of system upgrades) we observe that revenues from services that are made possible by these upgrades have increased very rapidly. The cable operators do not need to and should not be raising basic cable rates to pay for this upgrade. They would not be able to raise basic rates to cross-subsidize advanced services if they did not have monopoly power.

Besides, infrastructure investment has not been where they’ve incurred the greatest expense. What they are really using your ratepayer dollars for is a buying each other out. That huge expense is something the ratepayer ends up paying–without receiving anything tangible in return.

While the cable industry has certainly increased capital expenditures to upgrade its plants, it has actually sunk a lot more capital into another activity – mergers and acquisitions. It is the outrageous prices that have been paid to buy each other out and consolidate the industry that is helping to drive the rate increases (see Exhibit 5).

Not surprisingly competition is the solution, as it is for most American businesses.

If all cable companies faced meaningful competition – as those serving about five per cent of consumers do, through head-to-head competition with other cable companies — the cable industry could not pay inflated prices (and incur excess debt) through the merger/acquisition process, and could not pass along these excess costs to their customers. The General Accounting Office recently found that, in communities where there are two cable companies (and two satellite providers) cable prices are on average 17 per cent lower for comparable services than in communities with two satellite providers and just one cable company.

Notice, please, that real, wireline competition makes everyone’s cable cheaper. As studies like the GAO’s regularly document that satellite providers make no such difference in prices—evidence, should anyone care to admit it, that satellite and cable are not participating in the same market. Price competition is at the heart of the definition of markets. No price dependency = different markets.
On the other hand, competition with a fiber optic-based “Broadband Service Provider” (BSP) is demonstrably competing in the same market as the cable companies. The GAO is regularly commisioned by Congress to study whether or not a law is having the intended effect. A case study of one such law (The 1996 Telecom Act) shows:

The rates for telecommunications services were generally lower in the 6 markets with BSPs than in the 6 markets without a BSP. For example, expanded basic cable television rates were 15 to 41 percent lower in 5 of the 6 markets with a BSP when compared with their matched market.

That’s even better than the 17 percent from the head-to-head cable competition cited in the first study. The added competitive advantage of fiber generally drives prices even lower.

As is usual in the American economic system, competition is the key.

And LUS promises to provide fiber-based competition. The evidence is that we will all benefit—customers of LUS and customers of Cox alike.

David Hays has a letter in today’s Advertiser that pretty much indicates the state of the local regional opposition to Lafayette’s fiber optic project. The visible opposition is reduced to grasping at “issues” that really don’t make sense.

This letter is simply the latest is an increasingly isolated, shrill and disjointed opposition—one which in this instance is reduced to the petulant assertion that a community that has come together, left and right, republican and democrat, black and white, rich and poor to endorse a project that invests our money in our future is somehow operating out of a sense of, prepare yourself: “entitlement.” This is going to be real news for a community that has been fighting two out-of-state monopolies tooth and nail for going on a year. The city and its people have no sense of entitlement. They’ve had to fight, and fight hard, against BellSouth and Cox since day one.

Just to remind ourselves, here are some highlights of the fight:

BS and Cox’s first move when the mere idea of Lafayette extending its fiber network from offering resources to business to offering it to all her citizens was to prance down to the legislature and use a clever legislative maneuver to get its lobbyist-written bill introduced after the filing deadline. The bill was an unashamed attempt to make it illegal to even study the issue. The corporations wanted to get the state of Louisiana to tell the city of Lafayette what it could and could not offer the citizens of Lafayette. It almost worked. BS and Cox clearly feel entitled to their unopposed monopolies and were happy to try to use the state to quash our right to bring in a little competition.. It’s not Lafayette that feels entitled.

Then, you will recall, we were treated to an “Academic Broadband Forum” that was nothing less than insulting. BS and Cox brought in a panel to repeat outright and demonstrable lies like the ones that no telecom utility had ever succeeded and that competition from municipals had never caused cable companies to lower their rates. This is the same forum in which the representatives of the companies admitted before the camera that even if Lafayette were to vote for fiber they wouldn’t build it. Then, of course, they felt free to advise us that we should follow their advice and call a vote to suit their needs. It doesn’t bother them to piously advise us about a vote after telling us they wouldn’t pay attention to a successful vote and after having done their best to make sure the state would never allow us to consider the project, much less vote on it. The level of hypocrisy is breathtaking. And we are supposed to worry about the people of Lafayette feeling entitled? Come on! This is not where the sense of righteous entitlement in this fight resides.

You might recall a little anonymous blog site that purported to be written by a Lafayette resident (aka TJCrawdad) but turned out to actually be an official in Tyler, Texas at Cox regional headquarters who was in charge of “governmental and public relations” for our region. He took some ugly potshots at the governmental officials that he was supposed to be negotiating with from behind the cover of anonymity until he was exposed. He clearly felt entitled to fudge the truth a little bit.

Then Cox returns to the legislature and gets a Baton Rouge legislator to file a bill that would force a second vote on a community that couldn’t be convinced to petition for a first. That same bill would punish Lafayette for having the gall to offer a little competition to Cox by effectively fining it nearly a million dollars. Gall? Entitlement? Arrogance? Words fail.

We’ve had the first ugly push poll; and then, in an amazing display of raw arrogance, a second and even more offensive one. TV rationed to Monday, Wednesday, and Fridays. Really? Stuff like that is a joke. It’s almost enough to make you miss the attempts to inject a little racial animosity into the conversation by planting the lie that only the “southside” would get fiber with as many people as possible. We really don’t need the “help” of BS and Cox on this one. It is no one from this city who feels entitled to awaken that beast in order to make a few more bucks and avoid a little effective competition.

No, it’s not Lafayette that feels entitled to its way. It’s BellSouth and Cox who seem to believe they should be allowed to whatever would eliminate the possibility of competition.

When all the local regional opposition can come up with in opposition to the consolidating and pretty clearly overwhelming support of the community is “entitlement,” it’s pretty clear the well has run dry.

David Hays has it exactly wrong. A sense of entitlement isn’t Lafayette’s problem. In fact, it’s BellSouth and Cox’s sense of entitlement that has led them to act in ways that have alienated the community.

The Daily Advertiser carries a short feel-good story today on a small project (in relation to the need) to bring used computers to underserved Lafayette kids. I was there yesterday (with some other volunteers) and the program is really a very good one. The idea is a great one: rescue good computers destined for the landfill and get them into the hands of kids who can use them. The program run by Je’Nelle Chargois and Don Thibodaux under the auspices of the Muliticultural Arts Program (a local nonprofit) collects computers, checks them out, strips them down to components and bare hard drives and challenges the kids that come to learn what the parts are, put the computer back together and install the necessary software from scratch. If you complete the intensive two-day program you go home with a computer of your own…and a different appreciation for what lies behind your everyday experience of sitting down in front of your machine.

It’s the sort of program that we need several dozen more of…and all that is really required is to put the perfectly good computers that are being replaced on schedule by businesses together with volunteer skills and a few good organizers like the folks who run this program. Acadiana has all the pieces–perfectly usable computers go to the landfill daily, we have more than our share of good-hearted tech types, and plenty of local organizations are begging for these sorts of programs and would be happy to host them if they could get the pieces together.

That all that doesn’t come together more often and more easily is a real shame.

Part of the story about the event doesn’t make it into the article: yesterday almost didn’t happen, or at least in not as successful a form as actually took place. Je’Nelle Chargois spent part of last week scouring the community looking for the last nine three gig hard drives necessary to bring the twenty-nine computers for the anticipated crowd up to speed. As of last Thursday Goodwill had scrounged up two for her project but folks were still looking for the last seven. By happenstance, Chargois—acting in her role as the head of the local NAACP—had a meeting scheduled with Lafayette Coming Together (LCT), to discuss the local fiber initiative. Toward the end of a long discussion the membership raised the question of developing concrete programs that would address the digital divide and asked her advice on what sorts of programs might prove valuable.

She responded with a description of her computer-rebuilding program…and a side comment on the difficulty of finding adequate equipment and volunteers. A couple of members volunteered to show up and expressed the thought that those drives had to be out there. We promised to send out an email to our group email list and see what we could turn up both in terms of drives and volunteers. That email to the group resulted in several members sending emails to lists they belonged to ranging from TechSouth to the Lafayette Chamber. The response from the community was great. One of the LCT folks volunteered to receive phone calls and emails on Friday and started scheduling volunteers. In short order we had 10 volunteers from both the LCT membership and the good folks who’d read about it somewhere out in the land of email. Even better, Home Bank called with the donation of 10 Pentium IIs and about 30 Pentium ones. The Pentium IIs were loaded with multiple six gig hard drives…The project was set to roll.

It happened over the Saturday and Sunday of Mother’s day weekend just past. The students really lit up when they got to sit down in front of a disassembled computer that was spread out on a cafeteria table that was their station. At the height of the activity we had one adult to every two students and that worked really well. As a former teacher I was especially impressed by the “teacherliness” of the volunteers. They picked up on the emphasis in the introductory lecture about the way things fit one way and only one way and led the students through some hands-on practice in installing boards. In short order the students were forging ahead of instruction. And, mostly, getting it right.

A good experience for all involved…and a model for how we can all come together.

—In that vein, one of the volunteers that first morning was motivated by the experience to build an Acadiana tech community website which has as a major function trying to put together events like this one and volunteers from the tech community. If you’ve got an event (or an idea for an event) that needs volunteers or if you think this sounds like a worthwhile way to spend some time, head over to http://acadianatech.com/ and start looking for kindred souls.

Spent much of the day at my mom’s house for Mother’s Day, but got some useful information during lunch.

Turns out that my mom (who’s lived in Lafayette for about five years) received a Push Poll call on what she recalls being Thursday night.

I hadn’t talked to her about the fiber issue in a week or more, nor had I discussed the push poll with her at all, so her responses were based on her own instincts and what she’d seen about the poll in the local media.

She said she was asked if she supported the project and she said yes, she did. She was asked if she would take the services from LUS if they were offered after the election. She said she would — if they were cheaper than Cox and BellSouth (she’s a customer of each of them).

She told me she explained to the caller that she didn’t use the Internet, but that she supported the project for what it would offer young people — like me? 😉 — who did. “I told them that I thought it would be a good thing for young people, that they could get better jobs here using technology.”

Go, Mom!!!

She was asked the infamous ‘what if LUS rationed your cable access like they ration your water for watering lawns?’ question.

“I said that the question didn’t make any sense; that we can’t control mother nature and how much rain we get,” she said. “Cable is completely different.”

She said the questions were long and that there were a lot of them. “They would ask a question and then ask if I’d be voting for or against the project,” Mom said. “Each time, I told them ‘for’. After a while, I asked her if it was going to take much longer. She told me there were about four questions left. I said, ‘well, just put me down as ‘for’ on each of those and let’s be done with it.”

Apparently that was the end of it. She found the whole thing pretty amusing.

Interestingly, if her recollection of the night of the call is correct, this means that the push polling continued unabated despite the PR drubbing both BellSouth and Cox took in the local media as a result of the blatant nature of the poll.

So, the Florida-based pollster working for the Georgia-based media companies isn’t paying any real attention to the impact of the polling on the local populace or his clients.

Kind of sums up what this issue is about — the indifference of out-of-state interests to the interests of this community.

As the fight here in Lafayette starts to heat up there’s going to be a lot of national commentary on our city’s battle. Responses from the national level to the ridiculous absurdity of the Cox/BellSouth push poll is starting to roll in.

Today we have a great little story from Broadband Reports’ Karl Bove, “Fiber Kung-Fu in the Bayou.” It says that the same tactics that were used in the Tri-Cities battle is being used here. Beyond the push poll similarity (a major factor in the Tri-Cities fight) it also notes that the Heartland institute is involved here. The Heartland Institute is a so-called research institute in Illinois that regularly produces reports that favor the financial best interest of its corporate benefactors. The Heartland Institute’s absurdist paper minimizing the risks of smoking is only the most obvious example of their “integrity.” I wrote a fair amount about these guys when an associate of theirs who owns an editorials-for-hire company called Expert Opinions conned the Advertiser into running a guest editorial by passing himself as an expert “associate” of the Heartland Institute. Bove notices another sign that the Heartland Institute has its eye on Lafayette: Eric Benjamin has been hired to produce an anti-muni fiber article for the Heartland Institute’s newsletter for public officials in the Midwest. If one of your editorial writers is hiring himself out to an institute that is well-known for its extreme anti-municipal position on fiber, you’d think that it might strike the paper as unseemly for him to write on the topic here. Apparently such conflicts don’t bother The Times. Assuming, of course, that Benjamin thought to tell them.

The story also reviews the recent history, going back to the empty threat by BellSouth’s Oliver, to close the Cingular call center and gives a lot of good links to the Tri-Cities material and older parts of our own story.

As always, the comments on broadband reports are interesting.

The Advocate’s Kevin Blanchard does yet another superb job of digging down into the stories he covers. Today he works through the push poll story with a degree of thoroughness and dogged determination to track down answers to questions that required interviewing a raft of different experts. Folks, read the story not only for the excellent information it contains but also for the work and the craft that had to go into it. Not every story can be done this way, I know, but fix this one in your minds as an example of just how good workaday journalism can be.

Here’s the theme of the story:

Some reported questions contained in a recent poll sponsored by BellSouth and Cox Communications seem to put Lafayette Utilities System’s proposed telecommunications business into a false light, according to city officials and people who have been contacted by pollsters.

Blanchard briskly repeats the outline of the story, from Cox’s early, forced admission, to its claims that nobody local knew anything about content, to BellSouth’s denial, to Cox’s Cassard outing BellSouth as co-conspirators, to BellSouth’s belated admission that someone knew (level and name unspecified).

But what is most valuable, and required a lot of work, was tracking down the specifics on the various bits of absurd misinformation that the poll was intended to convey. Go look at his explanations for yourself, but I just can’t resist repeating the list:

1) There’s no issue with religious programming. The ACLU says it’s nonsense. Cities like Bristol and Dalton with systems similar to those proposed by LUS have religious programming.

2) The idea that LUS might limit TV to 3 days a week because they ask for restraint on lawn watering in the summer is just absurd.

3) The LUS plan will not serve the south side first and only. This little bit of an attempt to stir up racial animosity is particularly contemptible. We really, really don’t need any “help” from outside corporations on this issue. Even more astonishing, this sick puppy of a question inverts the real issue: LUS, precisely because it is a public utility, will serve everyone. Private providers have no such intention, will tell you so, and are currently lobbying the FCC, Congress, and the states to make sure they don’t have to.

This question amounts to an uncaring bit of malice which trys to exploit Lafayette’s racial history to gain a little financial advantage. That is combined with what the purveyors know is a lie about their opposition, but true about themselves. It is disgusting. This is one of those points where I begin to question how anyone can support these guys. Why put up with this? If these were people instead of unthinkably wealthy corporations we’d all hold them in fine contempt. We ought to anyway.

I’m not the only one who thinks so. It’s a good thing the corporations don’t need the council’s votes any more:

Councilman Dale Bourgeois, who represents an area of north Lafayette, said the question offended him.

“I truly take offense at somebody trying to divide the citizens of Lafayette. I don’t have any kind of respect for anybody trying to do that,” Bourgeois said.

Part of the LUS plan will work to increase lower-income households’ use and access to the Internet. LUS is already providing service for children’s programs at parish public housing authorities, demonstrating their commitment to serve the entire community, Bourgeois said.

Finally, we have the little canard that anyone will be able to find out what you are watching by consulting the public records law. They absolutely know this is a lie. They’ve got oodles of smart lawyers padding around plush offices in Atlanta to tell them so. That doesn’t matter. Advantage is all that matters to these guys. They are trying to find out what will be the right buttons to push. And they think that we are or might be just this stupid. Absolutely amazing.

The story ends up with a comment that lets us recall just what the point is… and it lets us know that the people who are getting this “poll” get it too:

Cassidy said he’s all for having a vote and debate on the LUS issue, but doesn’t appreciate Cox and BellSouth’s tactics.

“That’s what Democracy is all about — put the facts out there and let the best man win,” Cassidy said. “But simply to put these lies out into people’s heads — that’s what made me mad.”

This is the kind of election campaign that BellSouth and Cox always wanted — one of lies and deception. It’s just our people’s response that surprises them.

This short piece in the Advertiser reports on the news broken yesterday by KLFY: BellSouth, after denying that they had anything to do with the obnoxious push poll that both amused and annoyed Lafayette residents, had to retract the denial after Cox spilled the beans. Now they admit that they sponsored the poll but claim that nobody local knew. Nothing too new at this point but it’s all confirmatory–of things that are a little incredible. Interestingly, we see for the first time in print the name of the new Cox VP in charge of public affairs and government relations for our part of Louisiana: Tim Tippit. Write that name down somewhere. You may recall our last fellow with a similar title: Tom Cantrell aka TJCrawdad. They appear to be the ones who get to do the dirty work in this organization. Williams can (in)credibly claim to know nothing about anything that would impair his work with the local community while this midlevel guy insulates top management from the consequences of decisions made…nowhere.

“Your friend in the digital age.” ..NOT

The Advocate carries the news of Lafayette Coming Together’s website launch and the formation of an associated PAC.

The story is straightforward. A few excerpts:

A group has formed to begin raising money to operate a grassroots campaign of support in the upcoming election over funding the Lafayette Utilities System telecommunications plan…

The group said it will canvass neighborhoods, maintain an e-mail network, provide a clearing house for information, contact legislators, and solicit donations for buttons, yard signs and bumper stickers.

“Our members come from different political parties, different parts of town, different occupations, races, and ages,” the release says.

The only problem with the story is that the URL was incorrectly given as a .com address, not the .org one. The right one is LafayetteComingTogether.org. Give it a look-see.