Broussard Mayor Supports Lafayette

I’d like to be able to link to Broussard mayor Charles Langlinais’ letter of support for LUS but unfortunately it just isn’t showing up on the Advertiser website—nor are any other letters from Tuesday’s Advertiser. I attribute this to the generally flaky nature of their website.

But the letter really should become part of the record and since you can’t get it at the Advertiser you ought to be able to get it here. Langlinais nails the proper role and motives of local government and clearly points to the motives of Cox and BellSouth (profit maximization).

It looks like fiesty public officials are getting to be a tradition in this parish with Langlinais joining Durel in a healthy willingness to say what needs to be said.


Image of Broussard's Mayor's Letter

Follow the Money?

Well, I tried to follow the money. I went to the LUS budget review presentation for 2004-5 at the city-parish council meeting yesterday evening. As I had suspected, there was no budget item for the fiber initiative since there is no proposal to budget. Still, it was worthwhile—and interesting—to see the principals in action and to watch the dynamics of their interaction.

The Advocate and the Advertiser both have stories worth reviewing online. The Advocate’s Blanchard emphasizes the fiber angle and is thus probably more interesting to readers of this blog. Taylor’s in the Advertiser is worth reading on this score as well but she gives more prominence to other issues—and, indeed, the meeting spent more time focused on issues other than fiber.

I should really say that I came out of it impressed with the competence of all involved. Now a number of the councilmen weren’t there and maybe they are the ones that fit the all-too-popular stereotype of local politicians but I have to say these guys seemed smart, competent and earnest. Possibly I’m naive. But, hey…

I’ll not try and do a play by play or even be exhaustive in dealing with the high points of the event. Our interests here are the “Fiber for the Future” issue and for that there were three “C’s” worth highlighting: Context, Competence, and Class (or lack thereof).


The context of any fiber proposal, for both LUS, and the council, has to be as important in its approval or defeat as any actual business plan for a fiber optic network itself. Not to put to fine a point on it but the council and LPUA have to be concerned with the overall health of LUS and the services it already provides as well as any proposed new telecom utility.

In that context even fiber partisans should recognize how dominant electrical generation is and will likely always be in LUS’ budget. The current bond issue for purchasing two new gas-fired plants is substantially larger than the 100 million discussed to start up a fiber network and ongoing fuel costs are fully half of LUS’ total budget. Power is and will remain the most important utility LUS provides in terms of both human needs and simple cash.

I was interested to find that sewerage supported by other LUS services to the tune of about 20% of its total cost. While no proposal for change was in this year’s budget the brief back and forth on this point made it clear that all recognize that eventually this will likely change. Apparently new wastewater regulations and an aging infrastructure have lead to escalating real costs of providing treatment. Local government has effectively chosen to consider these extraordinary costs one-time expenses and has not passed all of that cost on to its citizens. So part of your electric bill supports sewerage.

The effect of this is probably to give a small break to the poorer residents of the city since the poor and the wealthy are almost certainly closer in their water usage than in their electrical usage. That is an intensely political if very quiet decision but one that seems absolutely right to me. What interested me is that it is clearly a longstanding practice to support the universal, inexpensive provision of one service out of the profits of another.

For fiber partisans what is interesting about this is that, by new BellSouth-sponsored state law, any LUS telecom venture will not be allowed to benefit the less well-off in the same way. And that is too bad. It is the kind of decision that we ought to be able to make about our own community without outside interference.

Annexation questions occupied quite a bit of time with discussion of an upcoming contract with SLEMCO that would allow LUS to “buy out” its customers when an area is annexed. Council members appeared to carry a good bit of frustration around that Lafayette had lost ground during the last “eight years” to more “aggressive” surrounding municipalities. In part this was due to lacking an agreement that would allow LUS to offer full city services to the areas annexed and the councilmen clearly wanted that situation to end.

Their frustrated passion led me to wonder if there might not be a fiber angle to annexation issues. Surely the provision of “full city services” that accompany annexation would be much more attractive, especially to outlying, upscale subdivisions, if being annexed provided access to cheap, truly fast internet, cable, and phone services as well as the traditional utilities. Realizing that potential advantage would involve an intricate dance with the adjacent parish municipalities who, by all the evidence I can see, have been promised a place in line for the fiber offered by LUS. Broussard’s mayor recently defended LUS (oddly, no online link for letters for that day only exist at the Advertiser) and additionally the city-parish’s LINC study has suggested tighter integration between adjacent water and natural gas utilities would lead to greater efficiency for all. There are potentially some very touchy, very local political issues just under the surface.


One of the more unfair issues that anti-fiber folks have raised is competence. There has been an awful lot of insinuation that somehow LUS is incompetent. Way too much of this has been based on nothing more than the generalized feeling that government just can’t be competent. That is silly. The actual facts are pretty clear. LUS, bond issuing agencies highest rating and has traditionally had the lowest rates around for its services. It replaces its plant as is needed. (Broussard’s water quality problem, for instance, is a result of not undertaking the infrastructure upgrade that has been necessary for at least a generation.) According to data from the Public Service Commission LUS provided at the meeting it has the most reliable electrical service in the state. By all the evidence it makes responsible, locally driven decisions with a noticeable eye for the long term.

There were some new numbers revealed on LUS’ already established wholesale broadband business, a recent target of insinuations that LUS has been hiding loses and has not been making its business plan’s goals. But according to LUS last night, its wholesale business is healthy and ahead of its projections. It projects an income of one million in 2004-5 based on revenues of 820,000 this year and 600,000 last. At that rate they expect to breakeven in year 4, ahead of schedule.

Class (or lack thereof):

There was evidence that the city council is tiring of Cox and BellSouth’s tactics. Some discussion early in the session about restrictions on LUS advertising and what sort of educational advertising was deemed legal were puzzling references initially. As the session went on it became apparent that council folk were angry about the recent Cox full-page ad that ran in the local print media recently. Council members are taking umbrage at the sorts of deceptive tactics BellSouth and Cox are using and are urging LUS to reply. But there are restrictions on LUS advertising that seemingly makes that difficult. Both stories cited at the top of this entry carry amusingly exasperated quotes from councilman Mouton on Cox’s tactics. But the papers did not report that chairman Stevenson injected his opinion that he was actually seeing very few emails or other complaints generated by automated mailers sponsored by Cox—and that he was seeing several times that number of “unsolicited” endorsements. If these guys ultimate goal is to sway the council I would have say that as far as I can tell their current tactics are working against that goal. A little class would be my first recommendation.

Wired News: Big Business Becoming Big Brother

One of the threads of those who oppose the LUS fiber to the premises proposal is an attempt to cast the plan as some kind of nefarious guv’mnt plot to encroach on the rights and privacy of Lafayette citizens.

Well, friends, the sad truth of the matter is that if and when the black helicopters do start landing in your back yards, they’ll have corporate logos on them!

WIRED has an excellent story on how the federal government has circumvented laws and rules designed to stop them from invading the privacy of citizens simply by accessing the databases of corporations! The WIRED article is based on a study by the American Civil Liberties Union that details what it calls the “The Surveillance Industrial Complex”—the web of cooperation and information sharing that has developed between federal agencies, law enforcement and corporations.

Call it the ‘adaptive enterprise’ approach to information gathering. That is, confronted with which blocked various data sweeping operations carried out directly by the government, the feds turned to private sector companies which, by the way, have much more information stored on much more robust systems.

The ‘LUS as Big Brother’ makes no sense from a scale of enterprise concept—I mean LUS’s annual budget would be barely an accounting blip at Cox, BellSouth or even Gannett.

The reality of the situation is that it is all that information you freely give companies when you use their credit cards, register for their give aways, use their ‘preferred customer’ cards, your credit reports, your travel records—all the stuff you thought was somehow private—these are the records that companies are freely sharing with law enforcement, a.k.a. ‘Big Brother.’

That opponents of the LUS plan will continue to shamelessly raise this canard as evidence of their desperation—and lack of respect for the intelligence of the citizens they claim to hold in such high regard.

If you’d like to get a copy of the ACLU’s report on the Big Government/Big Business attack on privacy, go to the ACLU website ( You’ll find a link to the report there.

Free Enterprise? How Cox deals with Competition: Let the State Tax ‘em

Cox, most noticeably of the two main fiber antagonists in the Lafayette battle, has chosen to try to cast fiber issue of one of ‘free enterprise’ versus ‘government.’ That’s pretty misleading, IMHO the real issue is rather a matter of choosing between private and public provision of a natural monopoly. Do we want a large private corporation or a local public utility controlling the natural monopoly that any fiber network will inevitably be?

But with the ideology of a radical, simplistic “free enterprise” position (all private good, all public bad) so prevalent, Cox seems credible when they claim to merely be for preventing “Government” from competing with “Private Enterprise.” And since the charge would be more or less true if it were really the case that “free enterprise” rather than monopoly power were at stake all they have to do to win this point is to keep up the illusion that their monopoly power is not at the heart of our local issue.

So Cox’s public presentation of itself in Lafayette is one of a pious champion of business against the overbearing, grasping state. It’s a nice role to play. But it just isn’t true.

A good example of this is that Cox has fought a losing battle for years in Arizona to force the state to impose taxes on competitors in order to force them to raise their rates. Government interference with free enterprise is just fine if it works to Cox’s advantage. In fact Cox is willing to demand it.

Asking for Taxes

What taxes? Cox has been losing cable customers in recent years (while taking in more revenue) and mainly losing them to satellite providers whose newer satellite technology evades Cox’s monopoly on local coax networks. One advantage of this newer technology is that it doesn’t lead to local franchise arrangements with local governments in which cable companies like Cox contract with the local government to pay the government for the use of its right-of-ways and for use and maintenance of the poles on which the cable runs. Satellite TV is more efficient than cable, at least in that way, and that, part of the more general fact that cable has to maintain a much larger on the ground infrastructure gives satellite a competitive opening.

So Cox is faced with a classic free enterprise choice: either continue to bleed customers to price-efficient Satellite or lower its’ rates and compete on price.

What does Cox do? Cox chooses to…try and raise their competitors’ rates.

Cox wants the legislature in Arizona to step in at the state level and tax the Satellite companies for costs they do not legitimately incur at the local level.
That’s right, Cox has lobbied the legislature to impose state taxes on its competition, but not on Cox, so that their competition will have to charge more to their customers. That takes real gall. I almost admire it. There is a Louisiana flavor to the exuberant, unashamed attempt to make government serve private corporate interests at the expense of its citizens.

But it doesn’t end there.

Demanding Taxes on your Competition

In a move that seems to have shocked even its allies with its heavy-handedness Cox has demanded that candidates sign a pledge to support “tax equity” before Cox will give them money to run for election. That’s sort of like a promissory note. The politician signs a pledge to provide a vote when the debt is called and Cox pays the politician. Pretty direct. Not pretty.

And it does throw doubt on the idea that Cox is simply promoting anything most of us would recognize as “free enterprise.” This is monopoly behavior.

Take home

Taking the message home to Lafayette, situations like this should help us see that what is happening here in Lafayette is simply the way that monopolies react when faced with competitive disadvantage. When their natural monopoly—born of their ownership of the only wired network that can carry the service—is no longer enough to eliminate real competitors monopolies turn to government to keep from losing in free competition. Certainly Cox does.

The Arizona situation is analogous to our own: LUS is suggesting that fiber technology is superior to coaxial cable in that its use would let LUS provide services similar to Cox’s for less money. Cox and BellSouth don’t want to lose customers. And they don’t want to lower their rates to compete. So Cox endorsed a BellSouth promoted State law that imposed a special “tax” on local government that Cox and BellSouth don’t have to pay.

What taxes? What was outrageous in Arizona is both outrageous and in that fine, special, Louisiana way, absurdist. Its outrageous to ask the state to pass a special tax on your competition because you have to pay for services they don’t need; it is outrageous to get the state to do so with the open intent of raising costs for your opponents so that they have to charge the public more; it is outrageous to admit you do so so you can compete more profitably. But it is absurd to ask the local municipalities who own the right of way, who built the poles and maintain them to pay as if it were having to buy access from itself. Who gets paid? Local government. Who loses? Only the customer. You pay more for what you buy. We get to watch the spectacle of the Louisiana “Public Service” Commission being told by our state legislature to make sure that Lafayette charges its citizens enough more than it would otherwise in order to cover the cost of something that it already paid for. It is absurdist. It is surreal. It is wrong.

Here is what is wrong with the PR image of Cox as a partisan of “free enterprise:” They act like monopolists.

It’s not what you’ve got; it’s what you do with it!

The Washington Post has a great article on the Digital Divide initiative that the nonprofit organization One Economy is driving in a number of larger metropolitan communities across the country.

The program is bringing affordable, shared, broadband wireless connectivity to residents in Philadelphia and other cities.

Reading the article, it is clear that the folks running One Economy grasp the idea that bandwidth has the power to transform the lives of those with access to it. The higher the speed, the greater the potential to drive change.

Rey Ramsey is the CEO of One Economy. This is what he says about what he believes the impact of this affordable bandwidth will be on those getting access to it:

“Broadband brings advantages in addition to all the new entertainment applications, Ramsey argues. His long-term vision is to use the Internet to revolutionize a social and educational services, such as homework assistance and helping find jobs, insurance and health care, much of which would require faster connections for video and interactivity.”

Note, too, that Ramsey and One Economy recognize that they are creating a demand for still-higher speed connectivity with every connection they make today.

Behind Closed Doors

Friday’s edition of the Kansas City Star’s Midday Business Update included some interesting comments from the chairman and CEO of Cox Enterprises, Inc. This is the company owned by the Cox family and its heirs that is buying out the 38 percent of the stock of Cox Communications (the cable and telecom company) now held by the public.

Cox Enterprises, Inc., is going to pay $7.9 billion to buy back that stock. To give some sense of both the size of the deal and the size of Cox Communications, $7.9 billion would pay for 79 fiber to the premises projects the size of that proposed by LUS (that is, 79 projects costing $100 million each). It also means that Cox Communications is valued by Cox Enterprises, Inc., as being worth almost $21 billion (using $7.9 billion for 38 percent as the basis for the calculations).

So, for Cox Communications, it is not a question of being able to afford to build out a fiber to the premises network in Lafayette, it is a matter of not wanting to do so.

Cox Enterprises, Inc., must be a huge firm. And it is. But, because it’s privately owned by the Cox family and heirs, it would be difficult to determine what that company is worth — or even how it conducts its business.

On the day that Cox Enterprises, Inc., announced it was taking Cox Communications private, the hired guns brought into Lafayette to accentuate the negative about the LUS plan prattled on about the superiority of accountability within corporations versus that inside government. Guess they don’t read newspapers or watch any TV, otherwise they may have noted that corporate accountability ain’t what it used to be — or, at least, what we think it used to be.

Not one of the panelists appeared even willing to conceed that the notion of corporate responsibility to communities had any merit.

But, what is clear is that Cox’s cable and telecom division will be less accountable to communities and the publics they ostensibly serve as a result of their stock being taken out of publicly traded markets.

Cox Enterprises, Inc., CEO & Chairman Jim Kennedy, was quoted in the Kansas City Star as saying that swallowing Cox Communications would likely slow the parent company’s buying habits. Could it constrain its capital spending as well?

As a quasi-independent company, Cox Communications has had to live according to the plans and projections it laid out in its various public filings. It also had to retain and control some of its profits, which enabled it to do things like upgrade networks and deploy new services. Now, as a privately held vassel of its parent company, the cash cow that is cable services could represent a very tempting pool of revenue that could be used to maintain other, less profitable segments of the company. Which ones? We don’t know because the parent company, Cox Enterprises, Inc., is privately held and is not required to divulge its financial data to the outside world.

No doubt, milking the cable systems dry is not the intent of the family in taking Cox Communications private. But, $7.9 billion is a lot of money and it is a significant amount of debt. If the national economy falters and things like the company’s newspaper division goes soft, or maybe the television stations, or the auto auction business — that money being generated by the Cox cable systems could look like a great life boat for those other segments of the company.

And, why not? After all, the Cox family will only have to answer to itself now.

A little distance and a little preview

Kevin Blanchard writes an opinion piece for the Advocate that allows us to back off the strum und drag of the recent fiber news.

His piece is a structured series of questions that focus not on the ideological clash that has dominated the news but on the gritty political, regulatory, and economic intersections that shape and constrain the way the issue will develop. It reminds its reader of the fundamental issues and at the same time gives us a nice little preview of what the reporter is working on.

(To see why I might think commending a style of “opinion reporting” is worthwhile please take a look at the painful contrast presented by what the Advertiser’s Decker did with the Chamber’s mealy-mouthed, take no discernable position on anything that could actually lead to realizing a vision “position paper” concerning broadband. Decker says “The page-and-a-half policy is running over with vision.” He isn’t being ironic. He is missing the point.)

Here’s the parts of the Advocat story I found most interesting,:

At the intersection of Regulation and Economics:

“How will LUS be affected by regulations being hammered out by the Public Service Commission? …Will the PSC set those minimum rates so high as to make LUS’ business plan less workable… How much can Cox and BellSouth lower prices to compete with eventual LUS service, without triggering anti-trust laws or the ire of the PSC or the Federal Communications Commission?”

Damn good questions, each and every one. Maybe we ought to start tracking contributions to the PSC members’ reelection funds?

At the intersection of Politics & Economics:

“How does New Orleans fit into the equation?”

Blanchard suggests that Nagin’s visit to Lafayette earlier this summer might not have been just about some sort of general “cooperation” between cities but might have also been an opening for asking for Lafayette’s help in driving telecommunication services down I-10’s dark fiber to New Orleans. Apparently a plan stalled by arcane New Orleans politics to put fiber in the downtown sewers is involved. (No, I am not making that up. How could I?) A far-fetched connection? I think so, but then it is Louisiana

And I’ve always wondered what BellSouth and Cox were afraid of that warrants the thermonuclear level of response we’ve seen. A regional Lousiana fiber network linking cities a la Utah’s Utopia project might be part of it. And wouldn’t New Orleans be the biggest possible plum…

At the intersection of (city) Politics & (city-parish) Politics

What would happen if the Lafayette Public Utilities Authority — made of up five city-parish councilmen who mainly represent the city — approves the LUS plan, but the council rejects it?

Apparently the charter gives control of LUS to the LPUA but any bonds would rely on the authority of the City-Parish. Who controls? Who knows. And I called New Orleans’ political problems arcane.

Well worth the read, go get it. I’m gonna look forward to the stories coming down the line.

Hypnotic, Hallucinogenic Fantasies

I really ought to make some sort of remarks on Eric Benjamin’s antiLus/goberment tirade in this week’s “Marijuana” edition of The Times of Acadiana. But its hard to know exactly how to think about it. When I first saw it I was really pissed. For a full 10 minutes. Then I read it again, and while still angry, puzzlement and confusion took over. The thing is just too hallucinogenic to be treated really seriously. Whatever the guy was smoking he really ought to cut down on whatever he’s mixing in. Oh yea, and in the print version the article is placed facing a particularly misleading full-page anti-fiber Cox ad. A mean-spirited observer might think that sows a little doubt about the Times’ objectivity. How dumb was that placement?

The opinion piece presents itself as satire that features an oily salesman trying to sell you a pig in a poke. But the weird, hallucinogenic right-wing fantasy it occupies is hypnotizing in that horrific watching-the-poisonous-snake-coil-to-strike way: User fees are new taxes. People who buy services like this (and water and electricity) therefore pay more taxes than their neighbors. You won’t get to watch the Sopranos. The local government is the one to be afraid of if you go to the Al Jeezera site. (Can you say misdirected? I cite the Patriot Act for your reasonable, legal locus of fear on this count. For the city to track you would be illegal, but not for your “Justice” department.) And then there is this particularly disconnected moment when Lester U Smiley (really, that’s the salesman’s name) says:

“What’s more,” he continues, “after we’re through with fiber-optics we’re moving on to roads and infrastructure, then to trash collections, police, fire and the schools.”

Hunh? That just floored me. The successful local provision of these essential natural monopoly services is the rhetorical and logical basis for making sure the fiber monopoly is locally controlled. Doesn’t he understand who provides these services locally? Local Goberment, Eric. …He really, really needs to cut way back. Hypnotic strangeness.

However, the angry part of my reaction remains: the article, done in the brand new general manager’s personal column (he’s been in Lafayette just a month), is an unbelievable pastiche of far right fear mongering, misdirection, and outright lies. Just introducing these poisonous little memes into the public discourse, especially in a context where no one has to take responsability for it since it can all be laughed off as a stupid joke, is criminal.

(You know there used to be these things called editors and publishers at papers that took responsibility for them. But apparently nobody bothers with that stuff at the Times any more. Maybe it’s that with Gannett owning it they really aren’t the ones responsible. …Hmmn, like local utilities, maybe local newspapers ought to be locally owned; else they never have anyone making decisions who really has to live with the consequences of their actions. These guys are all angling for a job at a bigger Gannett paper. Like the Advertiser. As general manager (aka business manager) this little bit of journalistic poison probably won’t affect Benjamin’s performance reviews. He can probably count on moving on to something better if he doesn’t get caught with his hand in the till.)

But read it yourself; it really is fascinating in that hypnotically horrifying little way. And maybe you can tell me what he is thinking.