Category: Advertiser

Construction News

The Advertiser posts a story on various aspect of the FTTH construction that leads with high bids that came in for the headend building near I-10 at I-49:

Bids to construct the building that will house equipment at the heart of the fiber-to-the-home project came in $1.5 million more than budgeted.

“They came out very high: $2.9 million on a $1.4 million budget,” Lafayette Utilities System Director Terry Huval said.

That’s better than twice what was expected and while this is a relatively small part of the project that much difference is troubling–as is the unspoken implication of the story that LUS might settle for a building that was less able to withstand hurricane category force 3 winds than the original design called for. The headend is the heart of the system and we want a secure building with enough room to accommodate additional communities that might want to buy services from LUS. (LUS has made a great business out of providing water and electricity to less well-appointed regional providers and in the process held down the cost to Lafayette ratepayers. There’s no reason to think they couldn’t do the same for telecommunications.)

Other parts of the story talk about the RFP that is currently out for fiber hardware and is due in on September 17th. That RFP defines what LUS is asking for and the response will give the community a good idea of the cost of various, relatively narrowly constrained, network architectures. The selection of a winning bid there will define the system’s capacities.

In the category of news about the lack of news:

Still undecided is which neighborhoods will be the first to receive fiber. LUS is working on the methodology to fairly make that decision.

That’s been the story for years now…..;-)

In the category of “its nice that someone has noticed:”

Meanwhile, he told the City-Parish Council this week that wireless or wi-fi will be part of the fiber initiative as time goes on but not in the initial stages.

“We do plan to let wireless become part of our overall network when we do fiber,” Huval said. “We won’t be providing retail access to Wi-Fi until we provide fiber services.”

LUS has set up 14 locations with wireless capabilities for internal use. The company plans on expanding with about 40 more wireless locations for use by LUS and other city-parish government agencies, such as the police department.

It’s nice that the media has finally noticed that LUS is going to do wi-fi…TheINd blog covered Terry’s “anouncement” earlier this week and probably that report prompted the Advertiser comment. (It’s not new, just under-reported.) It sounds as if LUS is planning on rolling out wifi in parallel with the fiber and only offering wifi access when it starts selling network services in an area. We’ll see—an actual, full announcement on the wifi portion would be most welcome.

Lafayette’s Age-based Digital Divide

Today’s Advertiser runs two stories (1, 2) that are both interesting and informative on the gap in computer and internet usage between seniors and the rest of the community.

The gap between seniors and the rest of the population is one of the most marked divides in internet usage—and one remarked upon by Lafayette’s own digital divide committee. Today’s article documents the divide and notes the narrowing of the gap over the years:

In a study conducted for The Daily Advertiser this spring, 36 percent of those over 65 who responded said they had accessed the Internet in the past 30 days. That figure was 33 percent for a 7-day period in question. Those numbers are significantly lower than any other age group, but even that represents a marked increase over 2001 (8 percent) and 2005 (22 percent) for the 7-day response.

That clearly documents a divide–and an improvement over time. What’s really great about this is that it is local data. (Something we very badly need.) Lafayette is unique enough that I’ve never been confident that the national stats applied very directly. National trendlines are easier to show confidence in but even that makes the old statistician in me a little uneasy—so it is very nice to get better data. The little bit of data given here documents a healthy change over time.

Interestingly this summer, PEW’s well-respected periodic surveys of internet usage documents a very similar number —32%—for seniors “using the internet at least occasionally.” That sort of phrasing is likely to overestimate usage; the Advertiser’s asking if a respondent has used it in the last week is a more reliable and tougher question—and it showed 33%. So while a completely parallel question would be ideal the Advertisers data is still a good indication that Lafayette’s seniors do not lag the national average and most probably are using the internet in a bit higher numbers.

We’re used to thinking of ourselves as behind the ball in Louisiana but apprently that isn’t true of senior internet usage. At least not in Lafayette. Why not? Part of the answer might be visible in the subtitle of the first story: “Classes help some step into computer age.” Folks at the university and at the public library have been making education available in a consistent and useful manner. Some organizations that appeal to the elderly, like genealogical ones, are also touting the advantages to interested seniors. All that has to add up.

Of course, as nice as education is, it still leaves more seniors offline than any other category. Arguably seniors with limited mobility, a larger interaction with the trappings of officialdom, and a more persistent need for good medical information would benefit more than the youngsters from internet connectivity. It would be nice to increase their utilization. The second story, “Why getting grandma online matters,” points to the more fundamental problem: showing people who’ve gotten along without the internet for the whole of a very fruitful life why they ought to want to bother. The story lists activities that make the value evident:

  • Sharing photos with family and friends.
  • Free medical information is available.
  • Shop without leaving home.
  • Apply for certain benefits.
    		•

    You know, when you think about it those are the sorts of things we all find interest–that and staying in touch with friends and our community more generally.

    What would help seniors begin to take advantage of the resources are pretty much what would help us all. We ALL would benefit from being better connected to our communities. That’s what the idea of a Lafayette Commons, an online place that makes useful local information easy to access is all about. Worth thinking on.

    Tidbits: Fiber Budget News & Wireless Police

    Two Tidbits from recent news accounts that focused on topics other than Lafayette’s network but included interesting bits about it…

    The Daily Advertiser coverage of the city-parish council meeting yielded this bit after news about the budget:

    The proposed 2007-08 budget is not expected to include funding for the fiber-to-the-home network because bonds to build the project were issued after Lafayette Utilities System submitted its budget, LUS Director Terry Huval said Monday.

    A special budget amendment will be considered by the council, probably at its Aug. 7 meeting, to address the capital needs of the project, Huval said.

    A second budget amendment to address the operations and maintenance of fiber-to-the-home, will be submitted prior to adoption of the 2007-08 budget Sept. 27.

    And, related:

    LUS is accepting bids to temporarily lease warehouse space to house the material needed for the FTTH enterprise.

    LUS soon will be taking bids on the warehouse and head-end building that will permanently house the FTTH equipment, Huval said. Construction is expected to begin before the end of 2007.

    Everything is moving down the tracks.

    A bit more on the wireless network LUS is anticipating building from the Advocate’s news briefs “Around Acadiana.” Note that it is framed in terms of using these cars “no matter where they are in the city.”

    Each of the units is also fully equipped with wireless equipment. Since the city is expanding its citywide wireless network for public safety workers, it won’t be long before police units will have wireless capabilities no matter where they are in the city.

    I’m looking forward to universal coverage.

    WiFi Hotspots…

    Well, the Advertiser this morning has a picture of the principals of this site splashed across the B section. That’s not our fault. We were just innocently plotting the creation of a Lafayette Commons, the downfall of Western Civilization as We Know It and minding our own business when an earnest young reporter asked us if we liked the wifi there. We told him we liked the coffee and the conversation evolved from there…

    The story is about wifi hotspots, not usually major topic here, but it is interesting and revealed a few places I didn’t know had wifi.

    Otherwise the only remarkable note in the piece is a quote from Huval:

    “As we deploy the fiber system, we may incorporate a wireless component as part of that (for consumers)…”

    That “may” is strange. Huval has twice publicly said that there would be wireless network for residents (@ Fiber Forum, @ Martin Luther King) and isn’t hesitant to say so in person so I don’t know why he’d pull his punches with the Advertiser. Durel too has repeatedly revealed his plans for WiFi–an old post about the value of wifi in a fiber-based ecology has a discussion on that. I’d hoped that we were through with coy, cautious language now that the bonds are sold…but old habits apparently die hard.

    The Daily Advertiser – www.theadvertiser.com – Lafayette, LA

    The Money’s in the Bank

    The sale of LUS fiber to the home bonds officially “closed” Thursday both the Advocate and the Advertiser report. LUS sold $110.4 million in revenue bonds to support the construction and intial costs of the network. As in “closing” on your home or car loan what this really means is that the money is in the bank and you can take possession of what you’ve been sold. In this case LUS (and the rest of us) is “buying” the use of the money. Now they can begin spending money.

    Expect the pace of things to pick up.

    The papers report that spending will begin on planning and on the early construction of items like the warehouse necessary to store construction equipment and the head-end building that will be the electronic heart of the new system.

    Attentive readers may wonder what happened to the $125 million that the voters approved two years ago. Why only $110.4 million? The easy answer is that new cost projections are lower as a consequence of the delay are less so they are borrowing less. But while that is central there is a bit more to consider as the following from the Advocate indicates:

    The $110.4 million in bonds are based on projections of what it would take to build a system if half the market signed up for LUS service.

    The savings in technology and interest cost mean that should LUS exceed that 50 percent share of the market, it could make it easier to pay for further expansion with cash instead of another bond issue, Huval said.

    The hope of LUS has always been to make LUS Fiber a utility, that is for LUS Fiber to be a ubiquitously available service run in the public interest. It is part of the history and community orientation of LUS to hope and believe that it will be the dominant provider of telecom services in Lafayette. While that level of subscription is not essential to the network’s success as a business (that figure is in the lower 20% range) a subscription figure above 50% is clearly what LUS desires. Based on subscription rates to other locally-owned, advanced telecom systems that hope is not particularly grandiose. Bristol, Va.’s system has recently had to retool its network at a real additional cost to accommodate higher that expected “take rates.” Consequently LUS has always taken seriously the potential for rapid subscriber growth—especially after having been endorsed by 68% of the voters. Heavy, early, buy-in from the community means a much higher initial cost to be paid for from the bonded money at a time before income really starts to roll in. The cost to run fiber from the street to the wall of your house, install the electronics box there, and connect up your home is a large, fixed cost that the business intends to pay off over time. (Huval estimated that cost at $6-700 recently.)

    So part of what it means to ask for less money from bond market than you were authorized to take by the voters is that you believe that you can keep up with the hoped-for take rates at more cheaply as a consequence of lower interest rates and lower equipment and installation costs than you originally thought. This is good news.

    The most dangerous moment for LUS might well be the moment of its biggest success. If LUS gets a huge initial subscription bulge that prevents it from showing a quick profit (as it pays off all those expensive but income-producing $6-700 dollar investments in new customers) AT&T, Cox and its agents are no doubt waiting to make use of the incumbent-written “Local Government (un)Fair Competition Act” to try and “prove” that LUS not making a profit (precisely because it is dominating the market) and use clauses in their their law ostensibly inserted to “protect the citizens” to shut down their local competition. LUS has apparently decided that this is not worth worrying about at the 125 million dollar level–only the 110.4 million dollar level. Having to worry about such nonsense at all adds cost to the build and is yet another reason why this special interest law should be repealed.

    Oh, by the way…am I the only one to notice that LUS had the authority to take home $125 million dollars—authority directly from the people—but chose to only use $110 million of that authority? That its “excuse” was the best of all fiscally responsible reasons: that it wasn’t going to cost that much so they didn’t want to burden the people with the expense of what would amount to a safety cushion? Where are all the nutcase jobs who were sure that the project was going to be incompetently and corruptly handled? Are any of them rethinking or moderating their stand based on the evidence? (Thanks, I needed to get that off my chest.)

    Huval Honored (updated)

    Terry Huval, the head of the Lafayette Utility System, is being honored by the American Public Power Association today. As the Advertiser (in a “People in Business” brief not carried online) notes he’s getting the James D. Donovan award which “recognizes those who have made great contributions to the electric utility industry and public power.” The award is named after the first president of the APPA.

    Even more significantly, Huval will be installed as of the Chair of the APPA Board tomorrow. Being lauded for your past contributions is one sort of honor. Being put in charge of things by your peers is an honor of an entirely different order.

    Congrats to Terry and to LUS….

    (And I’m looking forward to Huval being the first president of American Public Communications Association in 2014…and having an award named after him in 2024. 🙂 )

    Update: The Advertiser has a brief story online (not the one alluded to above) noting this award. There is a nice tidbit from the award citation included in the story:

    Huval was recognized for guiding LUS “to the forefront of innovation and change in the electric utility industry.” The successful legal battle that enabled LUS’ proposed Fiber-to-the-Home initiative has earned national attention, and Huval’s leadership on the issue and creative inspiration has led to a groundswell of local and national support and called attention to the importance of public power’s ability and right to offer advanced telecommunications services, the association said.

    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.

    Council to Approve Fiber Bond Ordinance

    It took three years to get here, but the Lafayette City-Parish Council is expected today to take a big step toward making the fiber-to-the-home project a reality.

    The council and Lafayette Public Utilities Authority are scheduled to meet at 4:30 p.m. today to adopt an ordinance authorizing the sale of bonds to build the fiber project. The meeting is at City Hall, 705 W. University Ave.

    That the news as the Advertiser represents it. If things go true to form both the LPUA and the council itself will vote to approve sale. The LPUA, a subset of the council made up of city-of-Lafayette members, is the official governing body of LUS and hence the new telecom utility division but the approval of both bodies has been sought in the past, “just to make sure.”

    It will be an historic vote that will clear the way for the bond sale. After tomorrow all that will be left is proceeding to the actual sale…and building the system.

    Light a Candle For Lafayette

    The Advertiser carries a brief report on the state of the fiber bond rating process currently going on in New York.

    The initial reaction from bond rating agencies that will rate revenue bonds used to finance the project was positive, LUS Director Terry Huval said…

    A good rating means that Lafayette is a good risk to potential investors. It also means the city’s bonds will have a lower interest rate and will cost less to pay off.

    That’s good news. This is vitally important. Though they are low profile, these negotiations will determine the cost of the single most expensive element of the fiber to the home project: the cost of the money. A good bond rating will mean a low interest rate.

    Seriously, go light a candle. (I’ve got a St. John the Conquerer candle that I save for special occasions. It didn’t seem to hurt during my dissertation defense. 🙂 I’m going to go light it now.)