Month: May 2005

This article from eMarketer on a new “Asia-Pacific Broadband” report contains starkly clear explanations about the importance of broadband access and why countries like South Korea and Japan have invested so heavily in fiber and why China is doing so now.

Did I mention that it makes a compelling case for the LUS fiber to the premises project?

Here are a few key quotes:

South Korea and Japan are in the forefront of broadband access because their governments have fostered a competitive marketplace through economic and regulatory policy. As a result, their consumers have a choice of broadband technologies and service providers, and residential bandwidth has become extremely affordable. Broadband connections have gone from 1-3Mbps two years ago to 50MBps-100Mbps today. New broadband services, including VoIP, online games and IP television, are also driving demand.

Ah, “competitive marketplace.” That scurrying sound in the background are the sock puppets of the incumbents and the incumbents themselves scrambling to say “See! Market driven is the way!”

I would agree were it not for the fact that the incumbents and their freres in the industry have spent hundreds of millions of dollars lobbying and lawyering to make sure that competition is restricted. We don’t have a competitive telecom marketplace in the US and certainly not in Louisiana and Lafayette.

LUS would inject true competition into the local voice, data and video marketplace. Doubt it? Well, consider the fact that your friends at Cox (you know, the ones “bringing the Fuchsia to Lafayette!”) have not raised their rates since word got out last year that LUS was considering getting into the voice, data and video business. I think there were four rate increases the year before LUS made its move. Coincidence? Think again!

Here’s another quote from the Asia-Pacific Broadband author, Ben Macklin:

“Investing in infrastructure, whether it is roads, railways, equipment or telecommunications, is an investment in the future. The evidence for economic and productivity gains stemming from road and railway upgrades has been well documented. More recently, efficiency gains from utilizing IT and e-business processes have also been clearly identified. In 2001, the Brookings Institute estimated that widespread adoption of basic broadband in the United States could add $500 billion to the U.S. economy and produce 1.2 million new jobs — yet there continues to be debate in the US and elsewhere as to the value of investing in broadband infrastructure.

So, the LUS project would position Lafayette to capitalize on leading technology trends — including jobs creation — at a time when the rest of the country (and certainly those in the south central US) continue to lag these trends.

Friends, that’s called comparative advantage and that is the critical element for success in economic development.

There’s more:

“A question that politicians and CEOs often ask in relation to broadband infrastructure is: what will consumers or businesses do with all that bandwidth? When US telecom Verizon announced its intention to roll out optical fiber across its national footprint, one of its competitors quickly responded by suggesting that consumers don’t need that much bandwidth. Yet the building of better roads in the US in the early 20th century was one of the major factors in driving the sale of cars, and in turn creating a massive industry. After all, there is no real point in buying a car if there is no road to drive it on.”

Gee! Wonder if the ‘competitor’ questioning Verizon’s commitment to fiber was someone from BellSouth?

Ever see the commercial for NASDAQ, where Steve Ballmer of Microsoft recounts the story about telling his parents he was going to join the company? He says his mother asked him, “Why would anyone need a computer?” Sounds quaint now, but in the 25 or so years since he had that conversation with his mom, the world has undergone a profound change, driven in large part by the computer tied to the networks that link the world. If Ballmer had that same conversation with his mother now, I’m pretty certain she’d understand why people need computers.

Analogies don’t always work, but one of the best one that has been applied to technology, opportunity and economic development is based on a quote from hockey player Wayne Gretsky, “The Great One.” Gretsky said the key to his prowess as a player was his ability to anticipate where the puck would be in a few seconds, not reacting to where it was in that instant. “Skate to where the puck will be, not to where it is,” was Gretsky’s condensed version of his insight.

The LUS fiber to the premises project is our community’s opportunity to skate to where the opportunity will be rather than being bound by a strategy imposed on us that is guided by considerations other than the community seizing on opportunity.

Why is this important? Again Macklin:

The analogy between road infrastructure and broadband infrastructure is apt, he says, because it reflects the US economy’s transition (like other economies around the world) from manufacturing to information and knowledge. The manufactured products of the past were distributed via road and rail; today’s information products are distributed via telecommunications networks.

Viewed in this context — and against the backdrop of the prolonged and persistent efforts of incumbents to treat bandwidth as if it was scarce, rather than offer it in abundance — the LUS fiber to the premises project is an essential infrastructure investment that is critical to the future economic well-being of this community.

Both the Advocate and the Advertiser carry stories playing off yesterday’s visit by officials from the Defense Advanced Research Projects Agency (DARPA) to the ULL campus to assess the progress of this year’s entries into the Grand Challenge race across the Mohave. Last year UL’s “Cajunbot“–a modified swamp buggy that seemed oddly out of place in the Mojave desert– made it all the way to the race to compete against teams from private industry and schools like MIT and Caltech. It was, and is, a great underdog story.

DARPA is the storied source of funding for blue sky projects ranging from artificial intelligence to ray guns (really) is now interested in something they call autonomous robotics. The idea is to develop a vehicle that can navigate complex terrain without human help. So far its not been a lot more successful in meeting its ulitimate goal of developing a vehicle that can drive itself across complex, unknown terrain than the artificial intelligence projects were. But the point, often missed by unreflective critics of government, of DARPA projects like the Grand Challenge is to deliberately set tasks so difficult that they “challenge” the participants to invent valuable new technologies in the processs. This is truly one of those instances when the value is in the journey and not the destination. It represents a specie of risk taking seldom conceived in the private sector.

The “field” of autonomous robotics is actually an offshoot of the artificial intelligence research cited above. While we never got “brains” like Hal in the movie “2001” that we can talk to (and fear) we did get whole new ranges of computer science that form a substantial part of the curriculm now taught at ULL. Autonomous robotics actually emerges from artificial intelligence’s failures–as it turns out it was easy to “teach” artificial minds to do things we consider hard (like math) but forbiddingly difficult to do thins we consider a no-brainer–like walk across a new room or navigate 200 miles of open terrain in a jeep.

The participation of ULL in the DARPA challenge (and LITE, and, of course, our proposed fiber-optic network) serves notice to the world that folks in Lafayette can participate in technological challenges at and beyond the bleeding edge. We needn’t take a back seat to anyone. And won’t.

CNet News, a major online technology news source, has a special report on municipal broadband networks: Political Connections. The lead story is “Cities brace for broadband war.” And Lafayette is not only in the lead paragraph, Lafayette is the lead paragraph:

A hundred years ago, when Louisiana was still literally in the dark, residents of Lafayette banded together to build a city-owned electric utility where once there was little more than swampland. Today, at the dawn of the 21st century, it is hatching plans to lay out its own state-of-the-art fiber-optic broadband network.

This time, the city’s futuristic ambitions are challenged not by the rigors of geography but by obstacles of business: specifically, telecommunications giant BellSouth and cable provider Cox Communications, which claimed the region as their own years ago. But the historic coastal community, known for its eclectic culture and rhythmic zydeco music, is not about to abandon the pioneering spirit that begat its visionary reputation.

Now that’s good publicity, if, well, a little overblown. It might not be on quite on the same plane as having the nation’s largest weekly endorse your small city’s project, but if we want to be considered for next year’s round of high-tech investments, being called visionary on CNet and cited for our pioneering spirit isn’t a half-bad way to start.

I talked to one of the authors the day TechSouth closed and we had a long discussion that wandered into how it was that Lafayette and not some other city was making this bold move. I get quoted saying that it has something to do with our historic willingness to go our own way. I think that’s a good part of it.

Toward the end, the story returns to Lafayette and Kaliste Saloom, representing Lafayette Yes, gets in some good points.

Take a look, its a fun read. And we come off well.

If you missed it, you should go back and catch the “guest columnist” piece Terry Huval had in the Advertiser earlier this week. He walks folks through a by-the-numbers explanation of how In Lieu of Taxes (ILOT) works. it’s a clear precise explanation and I can do no better than to suggest that you read it for yourself.

What I can do is telegraph that which would probably be immodest for the director of the Lafayette Utility System to say: LUS has generated vast amounts of wealth for our community.

It does this through a simple but powerful mechanism: what economists call the multiplier effect. This is a kind of positive feedback effect in which each dollar injected into a local community–or kept in that community that would otherwise flow out of it–circulates a number of times before it “leaks” out of the local economy. So a dollar saved has a much greater positive effect on local wealth than just the one dollar.

The way LUS operates results in more money being kept in our community than it would if LUS did not exist. And the money saved generates more wealth as it recirculates in our economy. ILOT is the second of the three generators of wealth that LUS provides this community.

The first is its consistently low prices. Over generations LUS’ prices have consistently been cheaper than its regional private competitors. Every penny saved over what would be charged individuals by private providers is money that returns and circulates again and again in our community, creating wealth for all.

The second generator of wealth is ILOT itself. LUS consistently pays more to the local government in ILOT than its private competitors would in local taxes and franchise fees. Every penny paid in ILOT funds government programs that would otherwise have to be paid by local taxes. In this way our citizens enjoy services similar or superior to those of surrounding communities without having to pay the taxes that would otherwise be required.

Harder to quantify but still real is that LUS certainly buys more of its resources from local sources than would its large, private competition.

All three mechanisms drive more money into the local economy than would an outside provider — and the money multiplies. It isn’t simple local patiotism that leads citizens and local governments to believe that locally owned and operated businsses are good for the local community. It is also basic economics.

The net effect of both lower rates, lower taxes, and larger local purchases is to keep money in all our pockets. Money we keep circulates locally and generates wealth here. It is simple and powerful. LUS is and has been good for our economy. Owning our own utilities has been a huge economic advantage for Lafayette.

Owning our own telecom utility will have exactly the same effect. Vote Yes on July 16th!