Month: July 2006

The Advertiser, in this morning’s editorial, advocates that we feel some anger about the continuing attempts to abuse the legal system in an attempt to stop the fiber to the home project.

They’re right, if woefully late to that conclusion. Of course we should be angry–and the Advertiser lays out the reasons.

1) Simple fairness:

The people support the project. The courts have found no legal basis for preventing the venture from going forward. Any further effort to use the courts to thwart the will of the people would be absurd.

2) Cost:

The cost of the delaying tactics is substantial, and we who support the project pay a substantial part. First, of course, the cost of defending against the ongoing lawsuits falls on all Lafayette’s taxpayers. LUS legal fees have totaled $100,000 thus far, and the cost will rise with the expected appeal and any other future litigation. Interest rates have increased 0.3 percent during the delays. That translates to an additional $6 million in the cost of paying back the bonds.

(That .3% is actually only the part that is attributable to the Naquin-Eastin legal delays–had we not had delays in the legislature, earlier court delays, an unnecessary referendum to confirm what the council had already decided, a PSC delaying battle, and the initial attempts to legally outlaw the project LUS would already be serving customers and saving us all money. A year ago, when the referendum passed, the rates were a full 2 points lower than they are today. Two years ago, when Cox and BellSouth were passing the (un)Fair Competition Act, they were a 3 and a half points lower. Driving up the costs to LUS has always been a prime motivation of the incumbent’s delaying tactics.)

3) Lost Benefits:

…What really is at stake is the competitive position of our community in a global economy. The world is experiencing what the Federal Communications Commission calls the “communications revolution.” In the years ahead, progress in Lafayette and around the world will be via the information highway. Becoming a leader in telecommunications will position Lafayette for powerful economic progress.

What the city envisions is an infrastructure for the high-tech world of the future. In the very near future, the movement of information will be as much a focus of business and industry – or more so – than the movement of cargo on today’s air, rail and highway transportation infrastructure. The availability of advanced, affordable telecommunications services to assure the ultimate efficiency in the transfer of information will be a priority of businesses looking for places to locate or expand operations. The LUS plan will draw them here.

To that I would add savings. LUS will drive prices down. Just the suggestion that LUS will compete has kept Cox from posting any price increases. If we already had the system we’d be seeing even more savings. And have a system we could all be proud of.

The Advertiser closes with:

Citizens of Lafayette should be angered by the stubborn attempts to deprive the community of these tangible benefits.

Yes, we should. And yes, we are.

Now that begs the question of just who we should be angry at. And the answer is all of ’em. The executives at Cox and BellSouth, Elizabeth Easton, Matthew Naquin and the Pendley law firm out of Plaquimines. If you know any of these folks let ’em know what you think.

Municipal Telecom in Louisiana has been mostly about Lafayette and New Orleans–and mostly about their fight with the cable and phone corporations. We’ve occasionally reported on other alternative local providers of telecommunications like Kaplan Telephone, EATel, or Cameron Communications and even more occasionally on various private wifi outfits. For my own part I’m a little hesitant to get to excited about private wifi groups with the aspiration to sell retail services to consumers. Both Lafayette and Baton Rouge have had experiences with private providers who announced grand plans that never really materialized in their announced form.

Baton Rouge’s much bally-hooed downtown wifi project is a case in point. I’ve never been able to get a good signal and a friend of mine who lives downtown says he finds it unreliable. The project just “shut down” for a month recently and didn’t come back up until they found a buyer willing to operate it.

(Timeout for a complaint: This is what is known as a business failure and you can bet that if it had been the city of Baton Rouge running the system it would have made the Wall Street Journal and been treated as proof positive of the incompetence of local governments. But the WSJ is not going to even notice this failure; heck the Advocate didn’t even notice until someone with connections bought up the hardware, presumably at fire sale prices. Are we going to see a spate of letters to the Advocate and two worried editorials suggesting that private enterprise is in trouble? That private entrepreneurs can’t be relied on to fulfill their promises to the community and that the customers left stranded without service should be compensated the way we would if the enterprise had been public? Nope, we will not…and no one but some lone blogger will ever notice the unequal standards applied. Thanks, I feel better now. Back to the story.)

While The Advocate found the connections of the new partners most interesting my attention was caught by the new firms ambitions. Some of them are fairly conventional as the firm switches to relatively proven business models:

[Partner] MacDonald … said that as the new company expands, JoVoGo will offer Wi-Fi to hotels, airports, residential areas, office buildings and other public areas.

And some of the ambitions reach out toward ambitions understood to be the province of wireline carriers. Ambitions that many doubt wireless carriers have the practical bandwidth or the consistency of service to provide commercially:

He also said that eventually, the company will offer “VoIP,” Internet-based telephony, as well as online video broadcasting, known as IPTV.

MacDonald acknowledged that by offering those services JoVoGo will go head-to-head with larger competitors such as Cox Communications and Bellsouth’s DSL product.

But final ambition seems most likely to be practically realizable–the company apparently has rural ambitions:

“Cities and towns want these networks, and there’s nothing anybody can do to stop the process,” he said of Wi-Fi. “Our goal is to work with traditional telecommunications companies to get their customers on the Internet.”

Powers said that between all three founders, the company has a solid base of contacts both in and out of state, as well as a mix of expertise.

He said that MacDonald is familiar with the technical side, while Brewer “knows how to deal with local governments to hopefully bring Wi-Fi to other communities to use as an economic development tool.”

Meanwhile, Powers said his own role in JoVoGo is seeking government grants and other financial assistance to deploy the technology in other communities.

He said the U.S. Department of Agriculture in particular offers grants, low-interest loans and no-interest loans to develop telecommunications in rural areas. For example, he said, USDA has a program aimed at getting Internet connectivity in municipalities with less than 20,000 people.

“The government sees the need to expand the information network to rural and underserved communities,” he said.

Now if you listen carefully there’s a carrot being held out to both the telecoms and the municipals. They’re suggesting that they could be hired to provide services to both companies like BellSouth or Cox and local communities. It’ll prove hard to serve both masters.

BellSouth and Cox are both working wireless deals in various ways. BellSouth in particular has made claims about providing its IPTV service during the recent franchise debate that it just doesn’t have the capacity to carry off. Rural areas will simply not get the new services that BellSouth let rural legislators think was possible. But they might well, in some places find it feasible to rebrand a well-connected local wireless providers signal. Others of the telecos are already doing this in attempts to placate localities.

Even more promising might be to team up with some smallish communities that don’t have decent internet service now. That’s the (so far unproven, but promising) model the America’s big cities are trying out right now. It would seem a more promising business model for small towns, in all honesty.

This company, JoVoGo Communications, is worth watching. Even if it flames out as so many private providers in this field seem to do its ambitions are well worth watching and might actually benefit some communities that really could use a provider.

Elizabeth Naquin and Matthew Eastin have cost their neighbors 6 million dollars since they decided to oppose what the people of the community clearly said they wanted last July 16th. That was the message of a clearly frustrated and angry Terry Huval and Dee Stanley at the news that the pair and their class-acton suit lawyers had filed an appeal of their recent loss in court.

The news media were on this, for a change. The Advocate, The Advertiser, KATC (with PC only video) and KLFY all run major stories–and they are all worth a look.

There clearly comes a point when such expensive obstructionism becomes a real issue for the community and it may be that this press conference marks that point. The question that everyone wants to ask is, of course: Why? Why pursue a course that only costs your neighbors so much money in order to frustrate their clear desire? Nobody believes that this has much to do really with utility rates. LUS has never had high rates and is perfectly free to set whatever rates it wants to set in any case. Nobody really thinks that a lawsuit that challenges the rates has a prayer of succeeding. And nobody thinks that suing over rates in years past has any real relation to preventing LUS to sell revenue bonds to build a business that didn’t even exist when the utility rates in question were set.

History helps us understand at least part of the reason that Naquin and Eastin are doing this–they are tools of the incumbent providers. The original version of this lawsuit originated during the fiber referendum fight and was nearly a direct copy of a suit filed by BellSouth with the exception of trying to promote the idea that “in lieu of taxes” is somehow an unfair tax on the people. That little bit of propaganda went nowhere an nobody really noticed when a judge dismissed the lawsuit (see the timeline in today’s Advertiser). The attempts to delay the LUS project passed the Public Service Commission and for a time lawsuits to delay LUS were superfluous. Given that history we shouldn’t be surprised to notice that after months of not having a suit active the lawyers and Naquin and Eastin only showed back up at the exact moment when BellSouth and Cox needed a new lawsuit to counter Lafayette’s attempt to repeal the (un)Fair Competition Act. Lafayette caved at the threat by BellSouth to sue again and cut a deal to withdraw their repeal bills. BellSouth let its suit die. The Naquin and Eastin lawsuit didn’t get included in the final deal amid claims by BS that it didn’t sponsor this one and hints that maybe Cox did.

Eastin and Naquin have never shown any interest in the actual fiber issue as multiple stories attest; they have never shown up at any council meeting or LPUA meeting; they’ve never shown their face in public opposition. With that in mind it’s a little hard to take seriously the idea that they are self-motivated by anything that approaches idealism to oppose the voters of the city. As today’s stories make clear they are not trying to save the people of the city any money. If that was their purpose they’d demand that their lawyers not entangle the bond issue that is costing the community so much money–and delaying a project for which the people voted. No, it is simply impossible to believe that Naquin and Eastin are hoping to benefit the community.

So why? The remaining explanations are pretty clearly self-serving.

1. They remain simply the tools of the incumbents. (Somebody has to be paying for these lawyers to keep four (count ’em!) lawsuits in different courts running. Who is paying for this? This 62 year old Elizabeth Naquin woman and Eastin? I have to doubt it.)
2. They’re hoping for a big bucket of money and are willing to blackmail the community in the hopes that the city will fork over a pay-off to get the chance to go forward. (Ain’t gonna happen.)
3. They actually think the lawsuit has a chance and that there would be a pot of gold at the end of the rainbow that they are willing to split with the lawyers. However, if the lawyers I’ve talked to are right there is really no chance of this. A win would only result in a long-term repayment in the form of a little bit of money rebated on each bill. There is no pot of money coming in any case. If their lawyers are telling them different they need to talk to other lawyers. Their own lawyers have undoubtedly made sure their cut is coming from somewhere.

There just aren’t all that many explanations for what is going on here as long as Eastin and Naquin are standing in the way of the bond issue. They’re costing the people of the community money and delaying a project the people voted for. It’s all pretty ugly.