Author: FiberFolk

Saturday’s edition of The Advocate carries a straight news story about a tour of other municipal fiber operations by a team of the Lafayette Utilities System (LUS) employees.

That article may come in handy if you read this Eric Benjamin column in Wednesday’s The Times of Acadiana.

Menwhile, John is still seeking help interpreting Benjamin’s first column on the LUS project.

The hired guns over at the Progress & Freedom Foundation think that the problem with telecom policy in these United States is that there is too much public input.

At least that’s the way I read this latest trial balloon from P&FF’s Randolph J. May. Mr. May believes that there are too many “cooks stirring the pot” at the FCC. His solution, make the commission directly responsible to the president.

What a neat trick!

As an agency directly responsible to the president, the FCC could invoke executive privilege to prevent the public from finding out whom the commissioners are meeting with in the course of shaping public policy.

Oh, I get it! Make telecommunications policy like energy policy! That is, make policy a captive of the corporations who constitute the industry and reduce public scrutiny of the decisions of the commission along with examination of the decision-making process.

Brilliant!

This is proposal is classic incumbent monopolist logic at work. One passage provides the key to understanding what Mr. May and his paymasters have in mind. He writes:

“In large part because of drawbacks tied to its institutional legacy, the FCC’s implementation of the 1996 act has been problematic. In this quickly evolving digital age, the commission regularly issues muddled, fractious decisions that take many months, or years to produce and they are frequently overturned in court.”

Before getting on to the argument itself, it must be noted that the companies that fund the Progress & Freedom Foundation (particularly the regional bell operating companies Verizon, Qwest, SBC, BellSouth and their predecessors) bear a hefty portion of responsibility for the FCC’s inability to make timely policy. These companies employ armies of attorneys whose functions include filing suits to challenge FCC decisions in the various federal court districts across the country.

That apparently irrepressible impulse to litigate further strung out the FCC’s long policy implementation process which is the impetus for Mr. May’s suggestion.

Mr. May’s complaint here is really that the current structure of the FCC provides companies other than incumbent phone and cable companies the opportunity to influence the regulatory process through which the FCC makes its rules. On top of that, there is no secrecy available in the process. The ex parte rule requires that commissioners and the commission staff publicize any meetings they have with parties having an interest in commision rules. The room can be filled with smoke as the industry lobbyists can blow, but the light of public scrutiny must be allowed to shine in.

What Mr. May and his P&FF masters want is something akin to the Cheney energy task force where the entire process of shaping policy can be conducted behind closed doors, outside the view of and beyond the influence of the public and those with views that run counter to those of industry incumbents.

P&FF is saying that democracy and transparency of process are the problem at the FCC. ‘Things would be much better if we could get these rules right quicker,’ they are saying. It’s a tempting argument, unless one understands the importance of transparency in the regulatory process, as well as the nature of that process compared to that of executive departments.

The FCC is comprised of five commissioners. The prevailing rule is that the sitting president gets to name a majority (at least three) of the members, ensuring that the party not holding the White House gets at least two seats on the commission. In the years since passage of the Telecommunications Act of 1996, this split has had real world impacts.

Reid Hundt was the sitting FCC chairman when The Act became law. Under his leadership (with the support of the two other ‘Democratic’ members of the commission) rules providing Universal Service funding for schools, libraries and rural healthcare providers were passed. But, more importantly, the commission under Hundt and his successor William Kennard took The Act’s commitment to creating a competitive telecommunications environment seriously.

With the change of administrations in 2000, Michael Powell became head of a commission which, for the most part, has been dominated by a 3-2 majority that has usually favored the interests of incumbents over a true competitive environment. In Mr. Powell’s view, competition would exist among modalities (cable versus phone versus satellite) rather than within the modalities. Thus, under the Powell FCC, there has been a rollback in the commission’s commitment to things like open access to incumbent networks.

One reason converting the FCC to an executive agency is so attractive to the P&FF folks is that raw political influence is much pronounced in those departments as compared to a regulatory setting. In today’s politics dominated by corporate contributors, under secretaries and other positions in departments (like the Department of Commerce mentioned in his article) have become the positions into which lobbyists for the industry or sector that such agencies allegedly regulate migrate. It is a revolving door environment in which political contributions don’t talk, they scream.

Under the transition suggested by Mr. May and P&FF, someone from, say, Verizon or SBC or BellSouth or Comcast or Cox, would — upon the victory of the presidential candidate receiving their largesse — move into a position that is today held by an FCC staff member who might actually have an iota of understanding of the concept of the public interest.

It is this pesky concept of the public interest or, at the very least, interests that do not entirely coincide with those of the incumbent telecom and cable companies which is the target of Mr. May’s ‘reform.’

What the Progress & Freedom Foundation seeks through this proposal is to enable its prime funders (see the names listed in the previous paragraph) to grab firm control of the regulatory process and turn it into a farce.

This ‘efficiency’ would come at the expense of an open regulatory process that allows for public input and participation. This approach would give those with the deepest pockets the ability to capture control of the regulatory process and shut the door behind them.

The Progress & Freedom Foundation forgets that the pesky inefficiency which open regulatory processes impose are inseparable from the reason that our republican institutions are so widely admired around the world. There is a price to be paid for ‘making the trains run on time.’ Sometimes pretty good is a damned sight better than perfect. This is one of them.

Don’t have a WSJ subscription and so can’t get to the text of this one. But if you do the story is online. But according to the summary on CNET news it suggests that the Bells are in trouble and may end up being a sick industry like the railroads.

I value history and have previously opined that the railroads are a good example of the malign consequences of ignoring the natural monopoly character of an industry. In our history it lead to a lot of unwholesome things like robber barons and widespread governmental corruption. A bit more thought and I realize that both railroads and the new Bells are regional monopolies and some of the problems with both were due to unclear jurisdiction and their regional nature.

All very suggestive and I would welcome hearing from a reader who does have a subscription as to just what analogies they draw.

The story of how lawsuits and regulatory maneuvering by incumbents in Virginia drove up the costs of Bristol’s OptiNet project is a pretty clear picture of what awaits LUS once it details its plan and, presumably, wins Consolidated Government approval to proceed with its fiber to the premises project.

The regulatory front was prepared in this state during the recent legislative session where BellSouth used its lobbying clout to compel LUS and other would-be Louisiana municipal fiber network builders to run their business plans by the Louisiana Public Service Commission.

But, what the Battle of Bristol reveals is that incumbent phone and cable companies have remained true to their corporate DNA. That is, they are not innovators they are litigators. The single class that has benefited most from the passage of the Telecommunications Act of 1996 have been lawyers, as incumbent carriers, competitive local exchange carriers, long-distance companies (interexchange carriers), cable, wireless, rural carriers, communities, citizens, customers and regulators clashed in the courts trying to flesh out the meaning of the new law.

Litigating is nothing new to phone companies, though; is the incumbent monopolist’s way. It is so deeply ingrained the phone company culture that McGraw Hill’s Telecommunications Protocols‘ (ISBN 0-07-134915-4) author Travis Russell writes in the second edition of that book:

“As you can see, while the computer industry highlights center around technology, the telephone industry has struggled with takeovers, lawsuits and regulation.”

With a takeover of LUS off the table, BellSouth (and, likely, Cox — either jointly or separately) will pursue the other two lines which have historically been the path of obstruction: lawsuits and regulatory manipulation.

The intent and the result will be to drive up the cost of LUS deploying a fiber to the premises plant here. In Bristol, incumbent phone company Sprint and incumbent cable provider Charter Communications vigorously pursued this route. There, they succeeded in delaying the rollout of services by OptiNet, thereby depressing revenue in the system’s ealry early going.

It may, too, have created ill will in the community for the incumbents as both have lost market share and a cable rate increase earlier this year had virtually no impact on OptiNet subscription levels.

We can expect a similar strategy of obstruction to emerge in Lafayette from the unnatural alliance of BellSouth and Cox Communications. The downside of this strategy is that it makes those that employ it come across as classic sore losers who are intent on inflicting pain on its likely competitors. But, of course, the views of customers would have to first matter to the incumbents in order for customer sentiment to be relevant.

Recently released polling data here shows that this is not the course that wins the hearts and minds of Lafayette residents. It is the course of petulant monopolists who are not accustomed to competition, nor to losing. It also reinforces the notion that the talk by Cox and BellSouth of concern for the well-being of the citizens and community of Lafayette is just so much hot air.

LUS has, hopefully, recognized the pattern of obstructionist tactics used by incumbents in its research on other municipal systems. I don’t doubt that LUS will be prepared for what awaits them when the time comes to move on its still-developing plan.

I wonder, though, if the public will be prepared for this fight? Because, cher, we have not seen truly ugly yet, but it’s coming — and it’s expensive!

Two new national articles examine the fiber fight in Lafayette—and both tear into BellSouth and Cox. It does a fiber partisan’s heart good. I’ve noted before that the Lafayette fight for fiber has become the headline fight in a spreading battle between incumbent telcos like Cox and BellSouth and Municipal providers like LUS. What we are seeing now is that people across the country are recognizing that the sleazy tactics arrayed by the incumbents in any one locale is not an aberration or an indication that something is somehow really wrong with the local project. No, what LUS and the City-Parish are being put through here is repeated across the country and is an indication not of local problems but of the greed, and weakness, of the incumbent providers.

Both Broadband Reports (Playing Louisiana fiber keep-away) and Fiber Optics Forecast (The FTTx Battle In The Bayous) carry stories on the issue. (links via LUSFTTH, good going Doug!)

I’ll not try and summarize these two articles, I’ll just feed you a few tidbits to and urge you to jump to the sources themselves. Both of them are well worth the time on Wednesday morning, I assure you.

BroadBand Reports:

In 2002, Cox Louisiana was one of the few cable markets in the country that saw three rate hikes in one year; a luxury afforded companies with little competition. Regional Cox customers are part of a forgotten Cox division that has been excluded from a series of speed increases customers in coastal markets have enjoyed. Cox is only now starting to provide these customers with connections faster than 1Mbps, yet they’re sure fiber is a bad idea.

On our “Academic” Broadband Forum:

We’re guessing the experts didn’t mention that in markets with more than one cable operation (muni or otherwise) consumers usually see rates 17% lower on average, according to data from the General Accounting Office. Also likely omitted was how the 16,000 residents of Newnan, Georgia receive broadband for $25 a month, discussion of how one Minnesota suburb now enjoys $16 3Mbps wireless service, or the growing number of other communities enjoying less expensive alternatives.

(Broadband forum is guessing right, they didn’t mention that, in fact they were at some pains to assert that municipal competition never caused incumbents to lower their prices. A position contradicted by both common sense and the facts.)

Finally:

These aren’t honest debates over the viability of municipal operations occurring in dozens of states across America. These are not corporate executives seriously concerned with the Democratic process and the quality of service communities receive. These are tactical corporate disinformation campaigns, designed to protect bottom lines and keep competition from arising in the service vacuums these companies have helped to create.

(Oh, and if you thought that was vigorous writing–don’t miss the comments….)

Fiber Optics Forecast

Telephone and cable companies, fearful of losing as much as 50 percent of their customer bases, have been opposing just about every one of the municipal projects. Until now, most of the battles have been fought behind the scenes, with only the tip of the iceberg showing at the occasional city council or other hearings. In Lafayette, the battle has escalated well-beyond that, into an acrimonious public debate that rivals the 1863 Civil War Battle of Vermillionville (as Lafayette was named back then, after the nearby Vermillion Bayou).

After expressing concern at the cost per customer of the LUS project FOF notes:

…Meanwhile, for BellSouth and Cox, the Battle of Lafayette really is a lose-lose situation, one that is reflected in smaller municipalities around the country. If Lafayette goes ahead with its project, the two incumbents could lose as many as half of their customers. If that happens, the economic underpinnings of the networks the phone and cable companies have built start to look quite shaky.

…Initially Bell South senior PR folks tried to convince us at Fiber Optics Forecast that it already has fiber to a million homes and that it is adding new fiber at the pace of a quarter-million homes per year. After just a couple of questions, that claim collapsed with the admission that the fiber passes all those homes, but doesn’t actually go to a single one of them. To be quite frank, our initial reaction was similar to Lafayette Mayor Durel’s comment to us that “they want to treat us and south Louisiana like we were a bunch of idiots.” At press time, BellSouth still had not produced promised executives to discuss the Lafayette situation. Similarly, Cox failed to respond to requests for interviews. The bottom line is that, in small towns like Lafayette, BellSouth and other CLECs might want to consider biting the bullet and abandoning most of their own lines, instead negotiating for a franchise as the voice carrier in any triple-play system offered via the LUS FTTx system. Half a loaf, after all, is better than none.

They close out with:

In any case, the Battle of Lafayette is sure to be studied by municipalities all over the country, with the eventual outcome helping to set the pattern for rural FTTx deployment all over the United States.

The following blurb and link were contained in an email eLetter from Southeast Tech Wire today:

o Discovery Acquires Raleigh-based Rainbow Educational Media

Raleigh, N.C. — Discovery Communications, the Maryland-based media

company behind such cable TV stalwarts as The Discovery Channel and TLC,

said on Monday that it has acquired Raleigh-based Rainbow Educational

Media, a publisher and distributor of core-curriculum educational videos,

CD-ROMs and DVDs. A Discovery spokesman said that the principals of

family-owned Rainbow — also known as the Charles W. Clark Company — plan

to retire, with the business being absorbed into Discovery’s current

facilities. Financial terms of the deal were not disclosed.

http://biz.yahoo.com/bw/040823/235537_1.html

What’s the connection? Well, Cox is an owner of Discovery Communications, owner of The Discovery Channel and The Learning Channel (TLC).

This just in: Cox still has no plans to build a fiber to the premises network in Lafayette!

In my little crusade to make sure that folks don’t take the recent flurry of anti fiber letters as all that indicative of the opinion of anyone but BellSouthCox folk I give you the latest letter. Though he doesn’t mention it he’s a BellSouth retiree; he said as much in his previous letter. I imagine he retired a while ago since he seems unaware of Voice Over Internet Protocol—VOIP. VOIP is surely the method that LUS will use if its plan goes forward and it involves using none of BellSouth’s resources unless the person you call is a paying customer of BellSouth or one of its lessees. Anyway, those “discounts” aren’t such a good deal anymore. The Ma Bell, AT&T, recently stopped taking new customers in our region due to regulatory changes which will eliminate much of the “discount” the writer complains of. Ma is moving to Cox, among others, to provide its local connection using VOIP as was reported here earlier. (See: Running to Mama for VOIP).

Don’t worry, I’ll get over this silly little bit soon. It just irritates me.

I went to the Zydetec meeting that featured Don Knezek, covered in the Advertiser story Expert: Technology vital in education and was impressed. Thanks to Zydetec for inviting him. Knezek is an interesting guy and I agreed with most of what he had to say about education and technolgy. A happy thing for me since ISTE, the organization he heads, is tremendously influential in setting standards for technology education at every level from kindergarten to grade 16 (that’s what educators call seniors in college). Part of my job in a former life was to make sure our college of ed could meet those standards for new teachers.

It turns out he’s a fan of broadband and intelligent advocate of settling on what you want to accomplish in education—the vision thing—before buying into particular technologies. That was refreshingly forthright and absolutely crucial to good decision-making. If we decide to persist in the idea that education is about transferring knowledge from one head to another textbooks really are the cost-effective, “proven” solution. It’s only if we decide we want to help students learn to engage in more active learning—the sort of learning that is more like our day-to-day, real world learning than textbook learning, do the richer resources of computation, databases, simulations, and the net turn out to be crucial.

Be as interesting as I found that and related parts of his talk, this blog isn’t about education and what was interesting from a broadband point of view was that this guy is smart, actually really important and, get this, passed up a slot on Jay Leno to come to Lafayette. What drew him was local projects that bring students into more active learning by bring them into the workplace and –you guessed it–the rumors of a large-scale fiber initiative.

If rumors can move a guy like this to visit, imagine the influx of just education folks eager to try out their grants in a large, diverse community. Folks will line up to beg for a chance to trot out the latest ed tech innovations. And that would be a lot of fun, believe me—and not only for the kids.

Maybe I am just in a contemplative mood this lazy Saturday morning, posting pieces that are more philosophical than newsy, but it occurs to me that Slashdot might be a good example of the possibilities of wider net access.

(Ensues longish both technical and philosophical discussion, if your day is not as lazy as mine jump to the bottom for the moral.)

Folks love the net but even its most ardent fans will admit that parts of it are pretty juvenile. Folks that are unpleasantly and often baselessly opinionated, for instance, dominate most discussion features. (I trust we are trying to be pleasantly opinionated here. 🙂 ) You can get the good stuff but you have to wade through a lot of silliness to get there. In an earlier post today I dismissed slashdot forums, leaving the implication that they were usually a waste of time. That is unfair and untrue. They are just a LOT and reasonable folks don’t always have the time or energy unless the topic is important to them.

Slashdot is a little preview of what can happen when a community users gets serious about having serious discussions. Slashdot is mostly about technical, web-oriented stuff. So its users are very net-oriented and have had access for longer than any one else. And they have had longer to get annoyed with folks we call “jerks” and they call “trolls”—folks who spoil the discussion. Being technical themselves they set about a fairly technical solution. They decided not to exclude people but to find other ways of keeping the conversation on track.

Update 3:30: The walk-through below is a nice teaching example of how the Slashdot system works. But as content it is old. A newer version of a very similar question asked the Slashdot community, Cities Building Own Fiber Networks, is recent and if you want to browse for information it is a better choice. The information there is a lot fresher. All the principles developed below apply. It might be fun for those not familiar with Slashdot to walk through the example below and then go explore the newer version.

If you’d like to see what I’m talking about open the slashdot fiber discussion in a new window and follow along.

The intro sets up the discussion and at points toward the real issues. Beneath the intro is a interface bar that allows you to change how things are displayed. If you set it up for -1:291 comments, Nested, and Oldest First and click the Change button you will be taken to a new page that starts with the comments. Look at ’em. The very first one is a silly off-topic thing that the someone a crew of folks who have been deputized to keep things sensible have downgraded to a (Score: -1 Offtopic) indicating that it’s offtopic. Looking down a bit you see one labeled (Score: -1 troll) indicating that its a post that is just trying to start trouble. You don’t want all that gradu do you? Go back to the top. Try the other extreme. Change -1: 291 comments to 5: 4 comments. Someone on the rating squad thought these the best. The system isn’t perfect. The first comment is way off base as responses in that thread demondstrate. But third one rate 5 for insightful actually is. Take a gander at it and you’ll see what I mean. (alone in a separate screen if you haven’t been following along) But while the rating system is very useful the adults using the forum do most of the work. They ignore dumb stuff. They point out what is misleading. They dont’ tolerate baseless, ideologically driven nonsense. When they think they are right they don’t back down but argue their point. But calmly, afraid of looking foolish or be downgraded–and hoping to be upgraded and notices as a sensible head. All that stuff is pretty much what we do in everyday life. But the web has been missing those amenities and slashdot goes a good way toward giving them back.

A long way to a short point: Once folks have good, solid net access they figure out ways to make it more useful.

It’ll work the same way here if we get cheap universal access. Once we get used to it we’ll figure out how to make it more useful…and good discussion groups will be the least of it I am willing to bet.

I was semi-idly noodling around the web following link trails of fiberish stuff when I tripped onto a Slashdot forum discussing Fiber To The Home projects. I have tried to tell myself not to get drawn into reading slashdot discussions unless the need is dire. Hours can disappear into that hole with nothing productive emerging. But I still graze those forums when it is something that interests me and this time it paid off.

Lawrence Lessing, he of intellectual property and constitutional law fame, was referenced somewhere in the middle of that very long page of comments and that link lead to a Wired article written in December 2003. There he presented a very clear discussion of the economics of Natural Monopolies as they relate to municipal fiber. If you’ve looked at my bits on that issue and wondered about the concept and application take a look a Lessing’s differently slanted take. Here is representative paragraph from the middle of the short article (AFN is All Fiber Network):

Most economists would leap from the premise of a natural monopoly to the conclusion that such a monopoly must be regulated. But regulation is not the end that McAdams seeks. Ownership is. If a traditional network provider owned an AFN in a particular area, that network provider, acting rationally, would charge customers a monopoly price, or restrict service to get its monopoly benefit. But if the customer owned the network, then the customer could get the same access at a much lower price and be free of use restrictions. McAdams is pushing – and Burlington and other cities are actually deploying – customer-owned AFNs.

You might think that a municipal monopoly might have the same abusive tendencies that any monopoly would have. But according to Lessing you’d be wrong: you’d be missing the essential point of ownership. He notes: “You don’t monopolize yourself.” Straight to the heart of the matter; I admire that. Lessing illustrates the matter by using the example of Boeing’s in-house fiber network. Businesses bring services in-house to save money, increase efficiency and to make sure the services offered meets their quality needs. Its a good deal for Boeing. And exactly the same logic applies to communities. Lafayette can’t monopolize itself. Monopolies act “rationally” (according to that strange conception of rationality found in economics) when they maximize profits wherever they are able. But there is no such motive for the people to exploit themselves.

Lessing caught my eye in the scanning because we have recently received a request to reuse material on this site. We’re for it, of course, and flattered, but realize that the material here is pretty tightly linked to Lafayette. (As are we.) People reusing the material and customizing it for their site run the risk of violating unreasonably restrictive, in our opinion, new interpretations of what is “fair use” of our material. As we realize how widespread the municipal telecom fight is we’d like for people to be able to freely reuse our material. One of the things Lessing is famous for is championing a less restrictive form of copyright called Creative Commons. It’s a great idea that allows people who want their stuff reused to make that clear. So, as soon as we can figure out how to do it, we are putting our material on this site under a Creative Commons license. More when it happens—but suffice it to say that Lessing is a hero of mine and I think well worth reading. He thinks clearly about hard to grasp issues like copyright…and natural monopolies.