[Snake Oil, from the IND.]
Click link or image for a larger picture.
[Snake Oil, from the IND.]
Click link or image for a larger picture.
The Ind blog reports that LUS is preparing to hold “a public input session to allow interested members of the community an opportunity to share their ideas for what they would like to see the fiber system offer.” Terry Huval is quoted as saying:
“This will not be a session to debate the merits of the plan,” Huval says. “It is only to solicit ideas from the community.”
Okay folks, this is what it means to have a public telecom utility…you get to have a say in what it does. This is precisely what we fought for. It is up to you to take advantage of the opportunity.
The broadest question is: What do we want to do with our network? What services do we wish to receive. (Beyond phone, cable, and internet.) How do you think it should be done? Early in the fight there was a lot buzz and work done on digital divide issues. The council signed onto a statement of principles concerning the city’s promise to use the opportunity represented by owning our own network to help close the digital divide. How would you liked to see those ideas implemented?
Mark your calendars: the tentative time and date is the evening of March 8 in City Hall. (Last I heard the word was that there would be at least two such meetings but there is no mention of a second here.)
The Independent’s news roundup this week headlines Lafayette’s victory in the state Supreme Court.
The story highlights the victory, takes a dig at Naquin, repeats the city’s contention that the delay has not hurt the project and closes with a citation to Michael Dell’s recent affirmation of the importance of fiber to dreams about the digital home.
On the “costs” issue:
…the almost three-year delay will actually save LCG $4 million to $5 million because the price of technology and equipment has come down. “Because of the legal battle we’re going to save money,” City-Parish President Joey Durel says.
“At the same time, the technology has gotten 10 times faster,” notes LUS Director Terry Huval. He says interest rates in that time period have remained south of 5 percent, another factor lending viability to the original business plan.
It’s true that we are good to go; and it is true that we’ll get a more capable system for the delay. But it is not as simply “all good, no harm” as these quotes might make it seem–and I am sure that Lafayette actually understands that. Lafayette paid a real price, and will pay a continuing price, for the obstructionism of the incumbents and their allies. In insisting on that I’m not advocating a vendetta but a good relationship with the opposition always starts with a realistic assessment of that relationship.
The (Un)Fair Competition Act will, as it was always intended to, cause unnecessary expenses, limit the financial flexibility of the utility we own in ways that the incumbents would never tolerate, introduces a thicket of regulatory rules that are so unusual they can’t even all be legally monitored by the PSC, and, most astonishingly, sets a limit on how low a price LUS can give to its citizen-owners. (Wouldn’t you like to write a law that limits how low your competitors can go and get the state legislature to pass it?) That law will impose continuing, unfair costs on LUS for as long as it is in place.
Clasues in that law, and unfavorable conditions agreed to by LUS in its authorizing ordinance while the courts battle hung in the balance will surely drive up the interest paid by our community. LUS would normally be able to borrow money at the lowest possible rate, given its stellar history, size and the general reliability of utility loans.
Interest will be, by far, the single largest single expense of the fiber project. While it is true that the delay will not drive interest costs above the 5.5% anticipated by the feasibility study what goes unspoken is that had BellSouth and Cox not stood in our way the bonds would have been sold into a market that was almost unbelievably cheap. The prime rate was 4% for much of 2004 and is now 8.25%. That is 4.5 points of difference. An enormous difference, over the life of the loan. I have no doubt that LUS can get the discount it needs to drive its rates lower than 5.5% but I also have no doubt that in 2004 it could have gotten a similar discount off the prime…wouldn’t it be much better if our interest was at, say, 2%? That enormous difference in the cost to us and our children over the 25 years of the bond is directly attributable to incumbent delay. And, we need to clearly understand, driving up Lafayette’s cost has been a goal the incumbents have pursued in the legislature and the PSC; its legal strategy contributes to that broad goal.
At this point we’ve also lost years of receiving a unique service and the price savings that would have accompanied it. In addition we’ve lost years of a headstart on the rest of the country–and on our corporate antagonists who have used the “time-out” to beef up their own systems.
So we’re not getting off “even” in any sense. The costs of obstructionism have been high–and they are not nearly over. If AT&T/BS and Cox wanted to do right by the community at this late date they’d not oppose repeal of the so-called “Local Government Fair Competition Act” an unfair law that imposes continuing costs on Lafayette’s now inevitable system and has curtailed the rights of all Louisiana cities. The original purpose of the law, frankly, was to prevent LUS from competing at all. When that failed the incumbents settled for making it as difficult and damaging as possible to operate in order to discourage us. That too failed. The law should go. The incumbents are hoping that we’ll not carry a grudge. That’s not a reasonable hope as long as the corporations continue to take unfair advantage of our community.
Not to dwell entirely on the negative: it is great that LUS’ fiber will be initially speced for 1 gig intead of the 100 megs we talked about during the referendum. (That is the implication of Huval’s saying that it would be 100 times as fast.) That, most had assumed, would have to be reserved for the planned upgrades several years down the road. Getting that almost as soon as it becomes commercially available will be a good thing indeed.
What’s Being Said Dept.
TelephonyOnline trumpets the larger impact of Lafayette’s recent court victory saying…. well, you can read it for yourself:
“This victory — and it is a complete victory, it was a unanimous vote by the Louisiana Supreme Court – will certainly send positive spirit around Louisiana, around the U.S. and perhaps even more broadly around the world,” said Jim Baller, the Washington attorney and municipal broadband advocate. “It comes at a very important time, because the debate about where the U.S. sits in the world today and what it needs to move forward to catch up to the leading nations is beginning to gather steam.”
Other communities can take heart from Lafayette’s victory:
“The Lafayette decision is very much a piece of that puzzle – the communities that are not going to be served any time soon with the kind of broadband capability that America needs are looking to communities like Lafayette to lead the way,” he said. The city’s almost three-year battle to allow its municipally owned utility service to issue bonds and build an FTTH network was met at every step by resistance from incumbent service providers BellSouth and Cox Communications, Baller said
That reference to “communities that are not going to be served anytime soon” hints at the root cause for the ongoing battle between communities and the incumbent providers that refuse to meet their needs. The very uncomfortable truth is that the incumbents are not planning to provide modern service for most of the country anytime soon (regardless of the stuff they spout during deregulatory hearings or state video franchise fights).
Baller, one of Lafayette’s attorney’s from the beginning, sees our victory in light of the country’s falling ranking in the broadband standings:
“We don’t have the luxury of time to sit back and quarrel when the U.S. in the broadband area is significantly behind the leading broadband nations of the world,” Baller said. “Given the importance of broadband infrastructure – many things in many areas will pass us by and will be much more difficult to seize – we can’t waste time fighting. I hope this will stimulate the sense of greater cooperation between the public and private sectors that will make much more rapid strides forward possible.”
I am afraid I can’t see that hope growing out of Lafyette’s experience. Lafayette’s experience gives little hope for cooperation. I wish it did. But the facts are that BellSouth and Cox fought us every step of the way. They fought us even though they refused to build such a network themselves. They fought us even though they knew that their bottom lines would be unmoved by our success. They fought us because the thought they were entitled to reap their profits unopposed by annoying competition and they fought us in order to discourage others from following our lead.
It is an illusion that the phone and cable companies can be convinced to sacrifice a single dollar to serve our national interest — any more than they could be convinced to sacrifice a single dollar to let Lafayette do for ourselves what they refused to do for us.
If a small city deep in southern Louisiana can defy the corporations and win just imagine what the Congress could do for this country if it showed a little backbone.
What Lafayette proved was the value of standing up for yourself instead of folding.
Bill Decker has published one of his occasional commentaries on the LUS fiber project. Decker has matured, going from a rabid opponent to one who has, intermittently, sounded like a reluctant proponent. This morning’s offering is “Round one in fiber fight goes to LUS; round two up next.” The underlying take, as Decker sees it, is that LUS may have (finally) secured the right to enter into competition (round one) but that actual competition (round two) is another matter–and that Cox, in particular, is going to be a competitor.
I think there has be a better metaphor out there than the boxing one. In boxing there is considerable effort put into making sure that the fight is a fair one. It’s hard to imagine a boxing commission, for instance, that would allow one of the dominant heavyweights to compose and bring to them a re-written set of rules that would forbid a new bantam-weight from even getting into the game. Even if the heavyweight said the newcomer had an unfair advantage because he was light and quick. The commission would laugh heavyweight out of the room and tell him the bantam-weight was no threat to his standing. It’s hard to imagine that they’d do as our state government did and “compromise” by letting the bantam-weight fight but insisting that he wear heavy ankle and wrist weights tied together by “light” bungie cords to compensate for his “advantage” in the upcoming battles. (But then boxing commissions have some sense of fairness.)
However, Decker is right to say that we are entering a new phrase. And right to cite Kutztown as a one example of what we might expect in the future. (See earlier LPF entries on the town: 1, 2, 3) Kutztown is not even a bantamweight; at 5000 people small it couldn’t rate higher than Minimumweight. But it turns out that size is not the real issue—customer trust and loyalty are. Kutztown has succeeded admirably even in the face of what seems like the open and shut case of predatory pricing described in Decker’s commentary. It now has a healthy locally-owned telecom utility that saves its township beaucoup money every year.
Kurtztown demonstrates that the little guy can be successful if it gets community support. But there’s more to look forward based on looking at Kutztown than the business not failing or even saving their subscribers a chunk of change. And a chunk of change it is–over one 3 year period little Kutztown saved its townfolk $400,000 dollars over what others nearby were paying. That’s not just money that stays in local pockets–its is also money that is much more likely to be spent locally–money that does not drain wealth toward some corporate center.
Unfortunately, Decker, even while offering us the evidence we need to assure ourselves that it is possible to radically undercut the incumbent’s monopoly pricing doesn’t seem to have much faith in our much larger town’s ability to match little Kutztown. He says:
LUS clings to its original claim that it can offer phone, Internet and some level of TV service for $85 a month. Even if we build in a 25 percent government bull factor, the LUS fiber services would be very competitive with those offered by Cox, maybe a little less so with BellSouth’s rates.
So talk up, turn on and log in. Let slip the dogs of war. If you get a good deal, get it long-term, and get it in writing.
I’ve got more faith in Lafayette than that. I’m uncertain, on the basis of the evidence that he himself presents, as to what funds Decker’s lack of faith.
One of the nicer things about the new media/multimedia is that you can relatively easily get to the raw source of some stories–if the reporting medium makes it available you can go directly to the horse’s mouth. Sometimes you might even see something that wasn’t widely reported–like the idea that now that the fiber battle is settled we might get wireless even before the fiber build is done. (See the Durel video linked to below.)
The Advertiser is haltingly, but more and more consistently offering us sources as well as their version of the story. I’ve pointed to this in a recent bit about Mardi Gras–there it allowed the reader/user/interpreter (what will we call ourselves?) to construct a sense of what Mardi Gras means to different locals in a way that writing just won’t cover.
The fiber story de jour is the Supreme Court decision that cleared the way for the FTTH project to proceed. You can read the Advertiser’s articles on it. But you can also look at some of the source material.
Most obviously: They provide access to a pdf copy of the Court’s decision. Download, read the thirty pages, and be grateful that you don’t have to do it for a living. Digging into the details will allow you access to rare gems. For instance the Chief Justice drops a footnote, number 11, which uses a quote from BellSouth Louisiana president Bill Oliver speaking in USAToday to support the court’s contention that the Local Government Fair Competition Act was intended to allow LUS to form a competing business. Judical Snark? Seems so to me. A nugget of humor in tangle of words.
But even more fun, and potentially informing in subtle ways are the short videos of some of the principles take right after the decison was rendered:
Dee Stanley on “putting your money where your mouth is.”
Joey Durel…about the decision: “it’s a slam dunk” and, of anonymous critics: “their motives are not pure.” A short scan of the administrative team giving hugs all around is moving. But the really interesting quote from this interview is: “my guess is that we will probably be wireless before we get fiber; there’s a good chance of that.” Now that, for many of us, is news– news that didn’t make the printed version. Durel had moments earlier acknowledged that wireless is “only as good as the backbone it is attached to” and he claims that a wireless play has been held up by the behavior of “the obstructionists.”
Pat “the man” Ottinger…”we are very, very happy.”
Terry Huval…”Lafayette won.”
There’s something about seeing ’em say it. And sometimes you notice something important that didn’t get widely reported– like the news about wireless.
One of today’s stories–it appears on the front page of the Sunday newspaper–is more about the next mayoral race than it is about fiber. The gist is that the court victory gives Durel a leg up in his first re-election bid and the subtext is that maybe he’s doing so well he doesn’t need it.
Prevailing in the long-fought fiber battle “is the tallest feather in Joey Durel’s cap,” Cross said.
But even if the state Supreme Court had ruled against LUS, it probably would not have been enough of a failure to hurt Durel’s re-election bid, he said.
No two ways about it—the fiber campaign has been the defining issue of Durel’s tenure. Durel ran as a Republican “reform” candidate and was backed by some of the city’s most powerful power brokers. That got him elected but it didn’t, couldn’t, unify the community enough to make him a powerful and effective mayor in his own right.
The downside to running as the business/Republican candidate is that, even among the moderate wing of your own voters, that support and stance raises inevitable concerns that in office the interests of the few and powerful will be served and fears that ideology rather than the good of the community will rule decisions.
Early mistakes on budgetary and symbolic matters heightened concerns. (The suggestion that the city rename Louisiana Ave., one of the most trafficked streets on the predominately black north side after the failed Confederate general, Johnson–now, really.) The fiber initiative, undertaken in his fourth month has served to redefine Durel…and one suspects that the experience has been to some degree transformative; abstract beliefs may well have been tempered by practical experience. —Durel is now willing to define himself as “a progressive Republican.”
Even running an honest, open administration will only go so far in countering such suspicions–the fiber campaign and Durel’s willingness to get out in front of his power base in support of fiber and to defy large corporations in uncompromising, arguably populist terms has gone a long way toward defusing that sort of low-level distrust. It is no longer credible to worry that Joey Durel will be mindlessly ideological or incapable of following a star to which the local king-makers haven’t given prior approval. Nor can anyone think that Durel is unwilling to take political risks to achieve things he thinks are valuable for the community. In retrospect winning a battle against Cox and BellSouth seems quite possible. We tend to forget that going into that combat history showed that the incumbents almost always found a way to turn their money and influence into victory. Many, even most, of the sage, wise heads thought it couldn’t be done–and hence were late to the party. Durel went on without them and in spite of them. And in the end Lafayette won against all the bets of all the oddsmakers.
For long months he and Terry Huval were the highly visible leaders of a Lafayette genuinely unified against a dauntingly powerful set of opponents. And the city won. The fiber referendum came largely down to trust and Lafayette decided that it didn’t trust Cox and BellSouth–and that it trusted Joey and Terry. That battle defined Joey as an independent, capable of forging his own path and allying across divisive lines to achieve good things for his community.
That sort of trust is hard to earn.
Those things last.
Today’s Sunday editorial experessing relief that the fiber project can now go forward is another in a series of strong supportive ediorials from the Advertiser. (The Advertiser’s initial endorsement series was a model for how editorial endorsements should be done: it expressed a strong, reasoned position and followed it in the subsequent days with fact-filled analyses of the major issues of involved. Powerful stuff.)
The FTTH vision is of an infrastructure for the high-tech world of the future, when 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 transfer of information will be a priority of businesses looking for places to locate or expand operations. The FTTH plan will draw them to Lafayette.
That will mean more good-paying jobs and a better quality of life for our people…
Staying abreast of the technology should not be a problem. Lafayette has experts in all phases of telecommunications technology. There is a rich field from which to draw…
The plan is on a fast track now. Three years after the first customers are connected, the LUS fiber services – cable television, telephone and high speed Internet – should be available to all residents…
The facts are clear. The electorate supports the project. The courts have found no legal basis for stopping it. Lafayette now can move forward in giant steps toward accelerated economic growth and technological leadership.
But there is a bit of revisionist history in the editorial and my old history teacher self feels obliged to note it–the Advertiser now claims that it supported the fiber project “from the beginning.” Would that were so. In fact the first few comments were anything but supportive with phrases like “What’s next? A five-year plan? A hall of socialist labor heroes?” In fact the daily, like the Chamber, came late to the party, endorsing only after community support had firmed up. In this vital battle neither were early leaders, however valuable their final contribution.
Well, heck… in yesterday’s rush I missed a very informative story in the Adverstiser. (I had meetings and family all day.) Mea culpa!
If you missed it too, go back and dig it up. It’s a very satisfying story to read in that it covers the flurry of activity that ensued as soon as the fiber plan was approved by the court.
In a nutshell:
Employees hit the ground running Friday morning, while City-Parish President Joey Durel fielded telephone calls congratulating him on the fiber victory.
There’s a grab bag of interesting points:
•• Ottinger too thinks it unlikely that any request for a rehearing will be made–on the grounds that it wouldn’t likely be successful. Of course, being seccessful in their myriad legal hassles hasn’t really been the point; delay has been. But the time when the obstructionist nature of their game can be denied is over. Neither the lawyers, nor Naquin, nor the incumbents that many think behind this as well as an earlier string of lawsuits are likely to have the stomach for the sort of rude dismissal that the court is reputed to be capable of–a dismissal which would underline again that these lawsuits have never been about substance but about delay and trying to get the courts to agree to anticompetitive measures the legislature never intended. (The ones the legislature did intend are bad enough; the incumbent’s law still badly needs repealing.)
•• Huval says they might not go for the entire bond cost:
…CCG Consulting, which conducted the feasibility study, is updating his numbers to determine how much in bonds LUS needs for the fiber initiative, Huval said. It will probably be about $110.5 million or less, he said.
Now that’s surprising and exhibits a certain confidence that the cost barriers that Cox and BellSouth have institutd in the (Un)Fair law won’t delay the pay-back schedule suggested by the feasibility study. Not selling the whole amount that the people authorized would be to forgo a cushion that will be hard to get in any other way. Perhaps (and I don’t know) the remainder of the bonds authorized can be sold later should need arise but there would be a political price to pay at that point that might be prohibitive. I do like confidence, however.
•• The hardware issues are being looked at, the requests for proposals are being drawn up, and you can know with certainty that the vendors are flocking in to make their pitches. LUS has committed to public forums that are intended to discover what we, the public, want in a system. Those desires might well have an impact on the eventual technical specs of the system so I’m looking for an early announcement of such forums to clear the way for the detailed technical work.
•• Cox says this “changes nothing in terms of its ability…” to compete. Sheerest Nonsense. Denial is not a river in Africa.
•• Mayor Durel cautions against taking any long-term contracts with the incumbents. I can see what he means; a tactic of the incumbents has been to try and lock up customers before local competition begins–even to the extent of hiring door-to-door salesmen, an expensive tactic seldom seen these days. I don’t see why you shouldn’t let these folks spin out their spiel–and then calmly offer to accept those juicy terms if the contract end date can be set to be the month before LUS is expected in your neighborhood. Reap the benefits of competition and the go directly to the hometown boys. (Do keep track of that end date, though, you’ll not want to miss out on any of the fun.)
The ball is rolling now and a different set of games are being played out. Good. The delay game had gotten real old.
It’s amazing how quickly things can change.
A few days ago the fiberistas of Lafayette were in anxious stasis, fidgeting and hoping that a court decision expected on February 27th would break in favor of the project. It did–on Thursday the 22nd. Jubilation! Unrestrained Jubilation!– with whoops and hollers on the other end of phone connections as the news ricocheted around town. That, however, has quickly given way to the sense that now, finally, the real work can begin. By Friday afternoon the conversations I was having with both people long deeply committed to the project and friends just eating dinner at the Filling Station downtown had turned to “What next?” and “Let’s get on with it?”
Blanchard over at the Advocate has an article in this morning’s paper that pushes that impulse one step further. He’s shifted the focus of his report from the fight to what we intend to do with our bright, shiny, new toy. That, I think, is the right thing move for us all to make. But the speed of the transition is enough to make your head spin.
I find the article exhilarating–and a little disconcerting.
The exhilarating bit is easy enough to understand. The story delves into a range of exciting possibilities that I really think are important and which need to be discussed by the community. The disconcerting part is that they are largely presented via attribution to me. I’m not used to being quoted. Both as a recovering academic and a blogger my stock in trade has been referencing others and it is truly odd to be on the other end of the stick. I feel obligated to say that I regularly share fantasies and hopes with a good number of other folks in our town–they end up being a community product and people who worked with me on LUS’ digital divide committee, Lafayette Coming Together’s fiber fight, the Cajundome computer center after the storms, and LCT digital divide projects have earned their fair share of the blame for the dreams I carry around.
With my discomfort hopefully out of the way, back to the story…
Boiled down, here’s the way I read it:
This guy St. Julien thinks that the fiber to the home system Lafayette is about to have is potentially game-changing, not only for Lafayette, but perhaps for the country. Lafayette could, if makes bold decisions correctly, end up not only way ahead of the game but also helping to define the rules of the game. It could be THE example for communities wanting to control their own future and could set up patterns others would be eager to follow. Lafayette could lead.
That hope is based on three factors that make Lafayette unique; a combination that no other community can currently match:
1) It will have a state-of-the-art fiber-optic network available to every home and business in the city. 100 megs of bandwidth will be available between subscribers within the network (the intranet, not out on the internet as the story indicated–there we will have more nearly conventional limitations) and that kind of capacity and universal availability is vanishingly rare in these United States. LUS has solidly promised to cut rates…and that, the research clearly shows, will increase the percentage of those who signup for various services. Lafayette could easily develop the highest “take” rate in the country–it could be the most connected city in the country.
2) That muscular network will be deployed in a large, ethnically and economically diverse city. Most other fiber networks are much smaller and are seldom comparably diverse. No other installation comes nearly as close to matching the diversity of the country as a whole.
3) Lafayette’s system will be owned by its users/citizens. Lafayette’s system will be a utility and as such its central purpose is reliable, affordable, service. Most high-capacity fiber installations in this county over the next 5-10 years will be made by private corporations with immense debt and an obligation to produce short-term profit for distant shareholders. Lafayette can reasonably make decisions without that baggage. We will be one of the few communities that own our own roads in the digital era.
Played right these differences can translate into a huge continuing advantage for the community.
The article mentions that Lafayette could, for example, decide that its digital set top boxes will do a more than those that other communities offer. (Analog broadcast will end in 2009–about the time Lafayette’s system comes online–and such boxes will be a practical necessity after that point.) Current set top box/DVR combinations (like TiVo or Cox’s DVR) are actually specialized computers using fairly standard hardware. It is not in the private provider’s interest to let customers use that capacity and it is effectively locked up. But LUS’s users are both its owners and its citizens. It might make sense to lock out the service functions but let users have the rest of the device’s computer capacity to use as a net-connected machine. That one stroke could go far to closing the digital divide by eliminating the most important barrier to computer use: the cost of the machine. With the price of computers dropping dramatically that may be less important than it once would have been. And maybe the details would prove unworkable. But the point is: Lafayette could consider it.
Lafayette could also turn its size and diversity to good advantage. That combined with futuristic broadband could — and should– make Lafayette the place for testing the practical and commercial viability of the the “next great thing.” Video? Educational applications too advanced for the current infrastructure? Community distributed computing? It is hard to overstate the potential.
As the article states:
LUS Director Terry Huval said LUS will hold public meetings to ask for public input and hear what types of services people would like to see.
St. Julien said the group he helped form during the election, Lafayette Coming Together, supports the idea of public meetings to discuss these technical aspects, which will have an effect on the end consumer
We have a lot to discuss and LUS is stepping forward to say that it is already eager to do what no private provider would care to do or dare to do: ask its users what they want to do with the network. That kind of openness is hard to find in today’s protect-your-rear world. We should take LUS up on their offer–enthusiastically and thoughtfully.
Let the conversation begin! –Time’s a-wasting.