Fiber Bonds Authorized

I attended last night’s “special and historic joint meeting” of the Lafayette Parish Utility Authority and the City-Prish Council and can report with considerable satisfaction that Lafayette’s fiber to the home project is now a done deal. With the now-ritual dual votes–first the LPUA votes and then the whole council votes on the same proposal–the official stamp of approval was put on the sale of bonds that was all but completed as the councilmen voted. That vote, as pro forma as it was, removed the last potential legal impediment to the construction of our FTTH network.

Both Blanchard of the Advocate and Taylor of the Advertiser have published accounts of the story they’ve covered since April of ’04. They’re both worth your read.

The executive summary on the story: only 110.5 million of 125 million authorized by the people was offered for sale and all but 20% of them were sold as of last night. They went for 4.9%–considerably under the 5.5% anticipated by the business plan. A successful sale…

From the Advertiser:

“Certainly this is a day we’ve all been waiting for,” said LUS Director Terry Huval…

The City-Parish Council and Lafayette Public Utilities Authority authorized the sale of $110.4 million in revenue bonds to build the much-anticipated, controversial fiber-to-the-home project.

Lafayette Utilities System received a favorable bond rating of A2 from Moody’s and A-minus from Standard and Poors, said Jerry Osborne, bonding attorney for LUS. The 4.9 percent interest rate is better than what was available two years ago but not as good as a few months ago, he said.

From the Advocate:

Low interest rates are the sincerest form of flattery,” Osborne said.

Three years ago, LUS presented a business plan as part of a required feasibility study that showed the project would be successful with 50 percent of the market, borrowing the money at a 5.5 percent interest rate.

The actual 4.9 percent interest rate is lower, meaning it will cost less for LUS to borrow money.

Additionally, in the three years since the project was first proposed, the cost of technology has fallen, LUS Director Terry Huval said. That will all make it easier for LUS to meet its goal to provide its bundled services at 20 percent below what its competitors charge, Huval said.

The Advertiser:

Officials expect to close on the sale of the bonds June 28. Within 18 months, the first LUS customer should be receiving high-speed Internet, telephone and television service through the fiber optic network. Two years later, all LUS customers who want the fiber service should be receiving it, Huval said.

Customers may be connected faster than that since the technology for installing fiber and connecting homes has advanced in the years that the project was delayed by lawsuits, he said.

And:

“This has been a long struggle, a very difficult journey,” [Bond Attorney] Osborne said…

“I think the next four years is going to be something to see around here,” Council Chairman Rob Stevenson said

Amen to those sentiments.

Update 6/13/07: My wife and I just put in an order for our very own “Communications System Revenue Bonds, Series 2007, City of Lafayette, State of Louisiana” fiber optic bonds. Call your agent and you too can own a piece of the future.