Month: March 2006

The Atlanta Journal Constitution (a Cox Newspaper!) takes a rather cool view of the AT&T buyout of BellSouth, owing no small measure of that coolness to the fact that Atlanta will be losing the home office of one of its large corporations.

Yes, Atlanta is going to lose a ‘player’ and probably a lot of jobs. Those things happen when companies get bought out.

An African proverb says that “When elephants dance, it is the grass that gets crushed.” It’s true for Atlanta and it’s true for Louisiana.

Louisiana is (brace yourself) not a growth market. What we are going to find is that communities in our slow-growing state are going to move from some indeterminate middle place in BellSouth’s nine-state hierarchy of priorities to some lower place on AT&T’s 22-state hiearchy of priorities. It’s pretty clear that Louisiana and other small states in BellSouth’s service area are going to lose what little chance they had of gaining access to even late-20th Century telecom infrastructure in the first decade of the 21st Century.

One set of figures I saw yesterday showed that AT&T is going to spend a total of $89 Billion on this deal, of which is $22 Billion in debt that was already on BellSouth’s books. Even with an estimated combined income of the new AT&T in the $130 Billion range, it’s going to take a while for the company to digest this debt, and the debt from the earlier purchase of AT&T (by SBC, which then took the AT&T name), other debt from previous deals, AND then borrow money to build out new networks.

Oh, yeah! Networks! The company actually fancies itself as being in the network building business. That will likely be the case only less so after this buyout, which is more than a morsel.

No doubt AT&T will make all the right coo-ing sounds in Louisiana and other BellSouth states, talking about all the wonderful things this new gargantuan scale is going to enable them to do. But, as even a cursory glance indicates, the AT&T/SBC record on keeping promises made to win approval of mergers is, to put it kindly, weak. More on that in another post.

If there is a silver lining in this for Louisiana it is that maybe (and it’s just a maybe) this gobbling up of BellSouth by AT&T will convince the Governor, the Legislature and regulators that the interests of these companies are distinct and separate from the interests of the state, its citizens and their communities. If such a realization did occur, it would be a status quo shattering event.

In the 10 years since passage of the Telecommunications Act of 1996, one would be hard pressed to find any evidence that passage of that act has had any impact on the way the state of Louisiana handles its telecommunications.

In 1995, almost all of the state’s telecom business went to BellSouth. It was the same in 2005. In 1995, regulators turned to ‘the phone company’ for expertise on telephone rate matters. In 2005, the PSC remained firmly in the hip pocket of BellSouth.

In short, while the rest of America was experiencing the telecom revolution, with all its turbulence, in Louisiana little changed. Essentially sitting out that revolution contributed significantly to the economic doldrums our state has experienced over the past decade and (along with other issues) helps explains why Louisiana never really got over the oil bust of the mid-1980’s (yes, some cities have, but the state has never really returned to robust growth).

But, something so dramatic as the buyout of the third largest phone company in America will get the attention of even Louisiana legislators. No doubt, they either heard the story on the news last night or will read it in the paper today. If nothing else, they’ll be wondering whether their next campaign contribution checks will come with the BellSouth or AT&T name on them.

And maybe that’s when it will begin to dawn on them that this world of telecom IS really changing.

And maybe that’s when they’ll begin to realize that these big companies ARE only looking out for their own interests and that Louisiana is (at best) a side show for those folks.

And maybe that’s when they’ll recognize that Louisiana IS really going to have to look out for its own interests if we are ever going to move into the modern era of telecommunications, which is essential for ANY information/knowledge-based economic activity.

It would be ironic but somehow fitting if it took this attempt to restore the decades-gone phone monopoly to convince our good ole boys that the good ole days are really gone.

I’ll take change any way I can get it these days.

Sundays are a good time for kicking back and spending a little time in reflective thought. My neighbors are all out mowing the lawn for the first time this season, knocking back the spring weed surge and hoping to get ahead of it this year. Me, I know yardwork is eternal, weeds simply are, and I’m enjoying the sun.

And while I am enjoying the sunshine I’m also happily reflecting on this nifty article on peering from Cringely, that points out that the future of video requires very, very, very efficient networks and that that, in turn, requires that network owners get over their fear of peer-to-peer file sharing and embrace the efficiencies that a peer-to-peer distribution structure make available.

Cringely is one of those guys who asks the right questions. It’s one thing to be smart–that’s nice but not all that reliably productive–and quite another thing to have developed a talent for asking the right questions. Cringely’s got a real talent for honing in on the important, intractable questions. While that’s his biggest asset, he also knows a hell of a lot about a hell of a lot of things and is able to synthesize a sensible, broadly-based (and hence surprising) guess about what really, honestly answering that right question might look like.

Invaluable.

Cringely dogs his problems; a little bit of an obsessive personality turns out to be good for his readers (if not, probably, for his wife). The current question grows out of a continued worrying of the issue of how to build a network that will be capable of doing all we want it to do. And what we want it to do is everything….HD video, voice, video conferencing, data streams, off-site storage and on and on. There’s some huge bandwidth involved. Cringely points out in an earlier essay that, to realize our dreams of a net that takes over and interconnects all functions it will have to grow:

If the prime directive here is simply to grow the Net as big and as fast as possible, then the best way to do that is through the balancing of data loads as much as possible across the Net. This is contrary to the client-server model that has dominated the Internet for most of its existence. Put differently, the major impediment to eventual Internet hegemony is the problem of scaling client-server applications. How big a data center do you need before you realize that no data center is big enough for some applications? Only a server-server or peer-to-peer architecture makes sense in the long run.

See? The right question and very hard to evade conclusion. How to grow the net fast enough? Install a more efficient distribution system…one that mimics the architecture of the net instead of trying to run everything from central servers. Several hundred pages of miscellaneous BS whitepapers, numerous panicked reports, and droning congressional hearings are hereby avoided.

This week’s essay is devoted entirely to the problem. I recommend you read it and spend some of your sunshine time placidly reflecting on the local implications.

I’m gonna try and absorb the idea that a peer-to-peer distribution architecture is the answer to network congestion; not the cause of it. Folks who are providing internet connections all over the country are running in panic from peer-to-peer downloadable video because it raises bandwidth usage. On the broadest level that is a good thing, at least for any company that has bandwidth to spare. You should be happy people want to use your product and happy that they’ll gravitate to you if you have the most of it to offer. But while internal bandwidth is easy to sell, the rub is that connecting through other people’s networks costs you money. So on the one hand local ISPs want folks to spend their money on more and more bandwidth but on the other hand dread the costs associated with that increase. It might be that a clever ISP could have its cake and eat it too: facilitate lucrative bandwidth purchases and keep traffic manageably local. If an ISP were to provide a very aggressive local caching setup that redirected downloads directed outside the network to a local server and run a peer-to-peer client in the customer premise equipment/modem or on its customer’s’ computers a network that could handle lots of video and other high-bandwidth, interactive applications could be built that would both provide fast, reliable connections, and keep as much traffic as possible off the costly larger internet.

Here’s a little sweetener: there’s a Louisiana company involved that Cringely promotes as having a chunk of the big solution in hand. It’s connected to a University and involves a specie of grid computing that might enable real-time streaming video and a radically lower costs….

Enjoy your Sunday afternoon.

The Wall Street Journal and the New York Times are reporting this morning that ATT is in the final stages of negotiations to acquire BellSouth.

The merger would have national implications:

A merger of two of the four remaining Bell phone companies would represent a huge step toward recreating the monopoly that existed in the phone business before the old AT&T was broken up in 1984.

A deal between AT&T and BellSouth could pressure Verizon to consider buying Qwest, the last of the four big Bell companies.

The resurrection of the old ATT was heralded by the recent acquisition of ATT by SBC; the new company took on the ATT name and presumably any ATT/BellSouth corporation would also do business as ATT.

For customers nationwide, the immediate consequence would be small. No customer would lose choices they now have–both ATT and BellSouth are monopolies in their areas and those areas don’t overlap.

Mike has been predicting this merger for months and I’ll be interested to see what he has to say about it. Our immediate interest is in the consequences for Lafayette and the LUS project. Don’t hope for any real changes in the phone company’s stance toward Lafayette or competition.

ATT, while SBC, was infamous for abusive public relations war in the TriCities of Illinois, pursuing a course there that inspired much of the aggressive defense Lafayette used in our local fight. You can expect ATT to continue to try and block communities that want to provide for themselves using the same federal, state, public relations, and legal resources as has BellSouth.

ATT and BellSouth are also pursuing very similar “Fiber to the Node” strategies toward getting into the crucial cable TV business. In contrast to Verizon (or LUS) which is running fiber to the home, ATT and BellSouth have pursued a strategy of building out fiber “deep” into field with the hope of beefing up their DSL lines and using those to provide enough bandwidth to fund a version of cable TV called “IPTV.” “Internet Protocol TV” is basically a fancy term for downloading video; unlike their cable competitors, ATT/BellSouth customers won’t have all the channels you watch constantly streaming through the connection to the home. Instead, a channel will have to be explicitly sent to the customer. This will mean a slight delay as you switch channels but will conserve bandwidth. ATT has been more willing to announce its video strategy publicly and has more test areas for its “Project Lightspeed” product.

In a lot of ways it looks like the acquisition of BellSouth by ATT will be a case of more of the same…but even more aggressively. The silver lining to this consolidation, such as it is, might be that the process of getting this by the feds might be distracting, that the new ATT will be straddled with monstrous debt, and that the sight of the giant phone company monopolies recombining could lead some of our federal and state representatives to question how wise it is to prohibit local competition.

It’ll be well worth watch as all this unfolds. As always the devil will be in the details.

Yesterday’s Advertiser ran a letter that predicts the paper’s ascendance as the area’s top producer of video news:

The Advertiser and will develop videocasts and podcasts that will at first attract only a trickle of viewers/listeners, then a bayou and finally a flood of Katrina proportions that will sweep all competition away in a torrent of quality webcasts.

That sentence provoked a smile and not only because of the local reference. The use of the word “torrent” is a clever touch. (Bittorrent being the distribution protocol that powers most video downloads, popularly called “torrents,” these days–much to the chagrin of standard TV outlets.) In most places this suggestion would be thought-provoking but pretty much impractical: only a small slice of the demographic necessary to making a newscast a fiscal success would have the bandwidth to stream a quality videocast. Videocasting for the few is not a viable business plan…Especially not for a newspaper whose advertising base is built on the presumption of a mass market.

But when LUS’ fiber-optic network comes in in Lafayette with a huge 100 meg in-system service for any LUS internet subscriber the “market” for such a “product” is suddenly credible. If LUS does capture 50% of the market it could put HD quality videocasts in front of enough people for someone to fantasize about a city market share that could easily rival the broadcast stations. (Yes, that’s not enough, I know. Broadcast stations and the cable company hit a much larger number in the region. Still that’d be a real market; not a fantasy one. You cold have low quality streams for folks who persist in using Cox.)

So, for the moment let’s treat the idea seriously that we could all be watching videocasts of smart, well-reported, specific stories at our leisure instead of occasionally tuning into the evening news. I’d certainly be happy to be freed from the tyranny of the newsreaders.

The Dream
A videocast regime built on the model of newspaper reporting could make for great video news: Instead of a talking head reading a headline you could have a real story written by a real writer and told with a beginning, a middle, and an end–whether that took 2 minutes or 10 minutes. Like the daily paper you could watch it anytime you had the time and look back through recent issues to settle any questions you might have. The writer would illustrate his or her points by using snippets of spoken interviews or bits of video footage. Not sure you share the author’s interpretation of a crucial event or comment? A “digging deeper” link would carry you to previous stories, a fuller interview, and the raw video footage.

How might we get to such a place? What would be necessary? How could its development be encouraged?

There’d seem to be at least two paths: Up From Technology or Down From News Institutions.

Up From Technology; AKA the AOC solution
You could start from the “grassroots;” from those already doing or poised to do podcasts and videocasts. Around here that’d probably be folks arrayed around Acadiana Open Channel–people who are interested in alternative media, in local perspectives and who are attuned to the technical issues involved. That group is already primed to find “work arounds” to the primary media and are prepared to think about developing audiences outside that context. Most of the talking head shows on AOC are already pretty much podcasts–the pictures of the mouths speaking doesn’t add a lot to the show, especially when the second speaker is a caller on the phone . The “news” programs are devoted to promoting stories the local hosts feel are undercovered. Mostly that’s national news but occasionally, as during the fiber fight, it includes a local component. What we see next to none of is anyone actually going out, finding, and reporting news.

AOC-type folks have the technical orientation, the passion, and the willingness to do something different. What we don’t see are actual reporters. And that’s what at least some of the established news organizations have.

Down From News Institutions; AKA the Advertiser solution
You could start from institutions — like the Advertiser — that already do a credible job of reporting. Real reporting is built on reporters, the “talent.” Any credible videocasting operation will have to have ’em. For all my complaining the print media still houses the only “real” reporters around. The best have a good sense of the issues and a real memory of how things have changed over time and how the same issue was tackled the last time around. A good reporter is a treasure and the only places you can find ’em nurtured are in the print media. So it is not irrational to look to the print media (and the advertiser as the letter writer does) as the source of reporting for a dream of videocasting replacing newsreaders.

But the reason that reporters are found at newspapers is that newspapers have editors and news directors. Most of the time good editors and good reporters go hand-in-hand. Editors/news directors do a lot more than critique the fine print and structural logic of a story (happy as I’d be to see more of that); they also direct overall shape of the news. If they don’t assign a story it will seldom be done. If they don’t have an education reporter or bear down about the background on stories that would be opaque to the public you’ll not see any decent education reporting or background material. A truly great reporter can swim against the tide of lackluster leadership but it’s rare.

What a videocasting regime would really need is a visionary news director/editor. I don’t see that at the TV or the Advertiser right now. Frankly, editorial leadership at the Advertiser seems weak; the choices made are pretty conventional.

The Third Way; Hybrid Solutions
If the Advertiser and the TV stations seem to lack passion, and the AOCites lack reporters or editors then it might be possible to get to a better place by combining the better qualities of the two.

AOCites might develop a “best of’ show that would package and rebroadcast in videocast format the best “reporting” on AOC. (Ok, they could broadcast it too, if they wanted. But this is about the videocast.) It could be a monthly thing at first but would serve the vital editorial function of providing guidance and quality assurance. Over time such a show might try and develop its own stable of people who report only through that venue and under the guidance of the editor.

News institutions might try and make use of grassroots passion by developing a “special to” relationship with video and podcasters that is similar to the relationship a lot of magazines and newspapers have with particular reporters and freelance writers. A lot of the nation’s smartest reporting has been done by semi-autonomous reporters with special relationships with particular editors. The most interesting possibility here is that some “underutilized” print media editors might step up. Weekly urban newspapers, with their alternative orientation have a national tradition of doing in-depth reporting in non-traditional areas. Recently, and locally, the Independent did a very nice piece on Lafayette’s Mardi Gras Indians which was an excellent example. A videocast of that story would draw a lot of traffic. You can imagine online interviews, snips from the neighborhood prarading, a segment on sewing the garments by various folks, a discussion over competing traditions, and a voice over commentary on the awards “ceremony” at Clark field. Something of that magnitude would become a constant, daily web site driver, useful at local schools, and visited by folks nationwide. During the carnival season it could fuel traffic for an entire online special section.

Fiber-based big broadband opens enormous potentials for doing things better and the possibility of a new way to do the news is only one. What’s exciting is that Lafayette could help shape that future. When new forms are invented the first folks out of the gate have a huge influence on what’s eventually seem as “normal” by the rest of the world. Lafayette will be one of the first with real broadband. All her people will need to do is to step up to the plate with some vigor and some imagination.

“Lafayette Utilities System will take another stab at borrowing money to start its telecommunications business Tuesday when it introduces for a third time an ordinance to issue up to $125 million bonds.”

So opens Kevin Blanchard’s article on the latest fiber-optic bond issue. As is standard for him, Blanchard’s story is a model of journeyman journalism. He’ll lead you patiently through how we got into the current situation and what’s being dealt with in the new bond issue.

What makes this a story this morning is that the bond ordinance is now available at the LCG website, linked from next week’s city-parish council agenda.

I took a preliminary look at the ordinance last night and that was enough to convince me that I’m not really in a position to really read it with complete confidence. There’s levels of lawyering that’s dressed-up common sense. This is a good bit beyond that, a thirty five page document of which probably half is consumed by explicit definition. But I did understand it well enough to gather that “Residual Revenues,” “Credit Event,” and “default” were key definitions. Every bond issue, I presume, has to have rules for what happens in the case of default by the issuer and this one is no exception. What’s interesting, and what BellSouth will be wanting to challenge, is the conditions under which default is triggered. That’s a big chunk of what has gone on in preceding lawsuits and hence a big chunk of what is being dealt with now.

The story notes that default is well-defined but that the city-parish gives itself the explicit ability to loan itself market-rate money — a capacity anticipated in the the Local Government (un)Fair Competition Act that gave BellSouth the capacity to trigger all this mess. Blanchard treats this as the obvious “out” that will be taken to make sure that default never has to occur. That strikes me as right.

Bear in mind that all this legal back and forth, beginning at (un)Fair law and continuing through the endless BellSouth fueled litigation is intended to increase the costs of purchasing services to the citizens of Lafayette and to make it more likely that any stumbling blocks along the way result in the collapse of the system. It is a hugely unfair law that imposes constraints on our community that no private provider would ever be asked to endure. BellSouth regularly transfers money within its company in whatever way serves its owners best. We should be able to do so as well. The fact that BellSouth has gotten the state of Louisiana to impose conditions on us that it would never tolerate should be a lesson to us about our legislature… we should already know about BellSouth. (As Mike has recently reminded us.)

Repeal is the solution.

It’s becoming a bit clearer as to why BellSouth is taking so long to restore phone service in New Orleans. They’re shipping jobs and workers out of state!

The Times Picayune had the latest installment of BellSouth’s quiet abandonment of New Orleans in Thursday’s paper.

Yes, it’s only 26 jobs this time, but that brings the total number of BellSouth jobs to leave New Orleans since Katrina to 250 which, the paper notes, is about 25 percent of the total number of jobs the company had in pre-Katrina New Orleans.

26 jobs here, 30 jobs there, and (to paraphrase Everett Dirksen) the next thing you know, you’re talking about a real economic impact.

Interestingly, after Bill Oliver’s bluster during the run-up to the fiber election, Lafayette is not listed among the cities that BellSouth has withdrawn jobs. Was the stuff Bill saying during the campaign really all just hot air?

According to LUS’ Frank Ledoux, speaking at tonight’s city council meeting, we’ll soon be looking at a new bond ordinance for Lafayette’s delayed fiber-optic utility system. That ordinance will set up the rules which will govern the money borrowed to pay for the system. It will have to reflect the 3rd circuit’s courts findings overturn a local decision, since the city decided not to appeal. It’s been a long wait for the new instrument.

We’ll see the ordinance on 7th; it’ll be given the legally-required two week period for reflection and consideration and a council vote is projected for the 21st of March.

That won’t be the final time the council has to deal with it before the bonds are finalized. There’ll also have to be another layer of approval when the bonds are actually sold.