Category: Cox

Net Citizenship and You

Food For Thought: Wouldn’t you rather your master be you?

I’m going to have to lay out an unfamiliar thesis: You, fair reader, are almost certainly not on the internet. Not really. You are a second class citizen who is not allowed to make many of the most basic decisions that full members are free to make; you are a dependent of your modem and the wireline owner it is connected to. Generously: you are a client of AT&T or Cox or ____ (your local duopolist here). Less generously: you are a second class citizen of the internet allowed only the access that Big Daddy allows you. And Big Daddy, as in Tennessee Williams’ play, is more interested in wealth and power than he is the welfare of his dependents.

Full citizenship on the web can be defined simply enough: full citizens can use their connection in any way that they want. They are independent actors who are free to make available or view anything.

That’s not you.

Take a look at your TOS (Terms of Service). Cox and AT&T’s, for instance, do meaningfully differ. But they agree about the essentials that concern us here:

1) You are the client, clients of clients are forbidden; you may not distribute service to others,
2) You can’t talk bad about Big Daddy, (e.g.: Customer is prohibited from engaging in any other activity, whether legal or not, that AT&T determines in its sole discretion, to be harmful to its subscribers, operations, network(s). This includes … or which causes AT&T or the AT&T IP Services to be viewed unfavorably by others.)
3) Free speech? No sucha thing. They get to say what you can say. (e.g.: “Cox reserves the right to refuse to post or to remove any information or materials from the Service, in whole or in part, that it, in Cox’s sole discretion, deems to be illegal, offensive, indecent, or otherwise objectionable.“
4) No Free Enterprise. You can’t sell things, for that you need the master’s special permission and a (higher-priced) service, regardless of how much traffic you use,
5) It’s not your connection. “Unlimited, always-on” connections are both limited and subject to an abrupt end. AT&T is bizarrely vague while Cox gives clear limits–which are seldom enforced. It’s not your connection; you need to remember that.
6) Your client status is a privilege, not a right. They can kick you to the curb at any time using whatever rationale seems most useful at the moment. (e.g.: Customer’s failure to observe the guidelines set forth in this AUP may result in AT&T taking actions anywhere from a warning to a suspension of privileges or termination of your Service(s). …AT&T’s decisions with respect to interpretation of the AUP and appropriate remedial actions are final and determined by AT&T in its sole discretion.)

7) Lucky 7 Laigniappe clause: Masters don’t have to follow the rules, only clients. (e.g.: AT&T reserves the right, but does not assume the obligation, to strictly enforce the AUP.)

You are in a master-client relationship with your network provider. You are NOT a full citizen of the internet. Your “location,” your IP address belongs to someone else. They have an assured, static IP. You do not. As long as they own that property you are dependent upon them and they can dictate the terms of that use.

Be aware that this is not the way it was supposed to be. The internet, right down to its IP core was designed around your freedom to connect.

One way of looking at network citizenship is through the lens of internet protocols and the operation of “the end to end principle.” From wikipedia:

The end-to-end principle is one of the central design principles of the Transmission Control Protocol (TCP) widely used on the Internet as well as in other protocols and distributed systems in general. The principle states that, whenever possible, communications protocol operations should be defined to occur at the end-points of a communications system, or as close as possible to the resource being controlled.

That’s a mouthful. Translated: The internet is designed as a transmission device that is supposed to be controlled by those on ends of a communication. You and the person at the other end. A request from one end is simply passed on to the other end—no single positive, centrally-controlled “circuit” exists. No controller stands in the middle. This is in contrast to the underlying design of the phone network with its centralized circuit switching system that designates a circuit for you and holds it open. (We’re talking about protocols, now….not physical implementation or the practical experience of users.)

Net neutrality battles are raging around the edge of this nascent war. We want to be full citizens of the new order. The incumbents would prefer that we be clients, vassels, and that they be the masters. Right now they are winning. Right now few of us even realize that current order is not necessary or natural—it was arranged for somebody else’s benefit; not for ours.

It really is that simple.

What we need to recognize is the nature of the war. What we need to be fighting for is ownership of our own connection. For full citizenship. To kill the Master-client relationship that constrains our current access to the network.

Ownership of the network is the most complete solution. Any limits we impose on ourselves are limits that we impose; they are not the dictates of the master. We may start out copying what we know in some ways. But that won’t last.

Lafayette, with its community-owned, fiber-based network utility is a good example of how that will work. From the begining things will be different here. We’ll have static IP addresses…and a lot of potential will flow from that. We’ll have full access to the speeds and capacity of our own network–that is what the 100 meg intranet is all about. As it becomes more and more obvious that many of the limits imposed by the current owners are not natural and not in the interests of users we’ll change those aspects as well.

That’s the real value of the battle fought and won here in Lafayette.

Worth thinking about…

Quickie: Bust Broome

A quick note:

Sharon Weston Broome, she of fiber fight infamy, wants to be Louisiana’s Senate president pro tem.

She shouldn’t be considered and no Acadiana region legislator should support her bid.

The fast rundown:

  1. Broome is the legislator that “authored”the infamous anti-Lafayette revision to the (un)Fair Competition Act. That bill, eventually passed in drastically ammended form, was submitted only 1 year after the “compromise” law was passed and was the incumbents’ attempt to get additional advantage before the law was ever used the first time.
  2. That act was clearly written by and submitted at the behest of Cox Communications.
  3. It would have forced a second referendum on Lafayette
  4. It would have fined Lafayette $900,000 dollars if the voters approved building a fiber network of their own
  5. To add insult to injury the law would have given that nearly $1 million dollars to Cox!

Lafayette’s people rose up in a campaign of letter writing and calling that led Broome to recant the more obvious mistakes in “her” bill, ask our representatives to tell the people of Lafayette that she was not a “vicious” person, and to say that she was not planning on returning to Lafayette until “it’s safe.”

Ms Broome has demonstrated her incompetence and her willingness to carry water for entrenched special interests to the detriment of the people she was elected to represent.

She has not earned any position of respect or honor.

PS: If that’s not enough to convince you, you might need to be reminded that this is the same Sharon Weston Broome that embarrassed the state by seriously suggesting that the state of Louisiana pass a resolution saying that it was our understanding that Darwin’s theory of evolution is racist.

Really. I couldn’t make stuff like that up.

Let your reps know that Ms Broome shouldn’t be an officer of our legislature.

Cox Degrades and Blocks P2P

Broadband Reports tells us that Cox has joined Comcast in chocking P2P traffic. (Readers and netizens will recall the uproar over Comcast’s public relations nightmare—blocking the Bible by using your control of the network to lie to both sides of the exchange about the state of the other is considered uncool.)

Like Comcast, Cox is using its control of the network servers to forge the identity of users on both sides of P2P (bittorent, etc.) connections and tell both users that their partner has asked for a reset of the connection. The consequence is a dramatically slower connection or, once one side of the software “gives up,” yielding a blocked connection. By forging false information about both ends of the communication Cox denies users the ability to exchange the data they choose.

Why? After all, people buy bandwidth in order to communicate. And Cox has plenty of tools that already control how much bandwidth you’re allowed to drink. Cox, like the other cablecos, sells you a speed-throttled product (1.5 megs, 7 megs, etc.) and they have an unpublicized monthly usage cap. So you can only use so much at a time and you can only use so much per month. That should be enough. Why do they feel the urge to tell users what kinds of connections you can make within those limits?

Well…because 1) Greed: supplying bandwidth costs money they’d rather keep and 2) Lying (or more generously, its cousin “advertising). Even though they’ve set out limits those limits are pretty much fakes that are used to sell product rather than rationally inform consumers. They are counting on very, very few people ever really using the capacity that they sold them. If any substantial number of users really starts to use anything like their monthly allotment everyone’s shared speed would drop like a rock. Cox just don’t have the capacity to give consumers the speeds they’ve sold them. At the root of this sort of behavior is that Cox (and the other major telecomms) oversubscribe their bandwidth…sort of like “overbooking” the seats on a plane. Only Cox et al do a lot more of it than than any airline ever dared. (See a recent fine discussion post on gigom for a clear elaboration of the business and network dynamics involved.)

When P2P begins to entice users to come somewhat closer to using the speeds and capacities they’ve bought that overbooking is revealed: the network slows down and the advertising is revealed too obviously for what it is: a commitment they can’t keep. It doesn’t help Cox stay calm that P2P also looms as a threat to cable’s core business. (We do know what most torrents are used for don’t we? Video, legal and otherwise.) Instead of announcing rational speeds and caps that would reflect their actual network capacity Cox follows Comcast in surreptitiously blocking the upstart P2P network in ways that are fundamentally deceptive.

Notice please: exchanging data is exactly why customers buy an internet connection, the blocked technology is perfectly legal technology; the content presented for exchange is not Cox’s responsibility; and internet users that never, ever signed a contract with Comcast are having their access blocked.

It’s profoundly wrong on multiple levels and no amount of handwaving about ensuring quality of service can obscure it.

Here in Lafayette LUS users will avoid the worst of this because LUS won’t sell you a product they can’t supply. That’s not the way that utility people think. It’s not about marketing for them. Besides, they won’t have any need for marketing deceptions. The sort of advertising that Cox is engaged in is intended to convince you that you are getting more than you actually are. LUS will have the bandwidth to give you exactly what you pay for. And LUS has been very direct in saying that they intend to do just that. I don’t think many people have heard them; it sounds too obvious…but the engineers at LUS know that your local cable connection is horrifically oversubscribed and it hurts their engineer’s sense of right order. They want you to know they won’t do that. (This is similar to the no connection fees, no penalty-laden contracts promise LUS has made—not doing that marketing stuff is the utility way.)

Does that mean that LUS will never mess with P2P? I hope they won’t. There is a lot of nervousness about uncontrolled usage among engineers and servers and P2P is at the center of that angst. I think such anxiety misplaced. But…My point is that LUS won’t have to deceptively block services you want to use in order to keep up the facade that you’ve got plenty of speed. LUS will actually have plenty of bandwidth. And if you use a lot more bandwidth going out of our network (generating a cost we all share) than your fellows do there is no reason not to simply tell you that you are pushing costs onto your neighbors. And charge you for fairly for it if it gets too disproportionate.

Oddly enough I’m looking forward to having that sort of relationship with my net provider. A more honest approach would be a refreshing change.

LUS Franchise Agreement

Kevin Blanchard over at the Advocate reports that a franchise agreement between LUS and the Lafayette Consolidated Government (LCG) will be introduced at this Tuesday’s City-Parish Council meeting.

While it is 1) technical, 2) presented as an uninteresting “me too” copy of Cox’s, and 3) no doubt a terminally boring read this will be extremely important to Lafayette consumers and citizens—try not to let this slide by you. To understand why the franchise agreement is big deal and what shapes it I’ll have to provide some background from both the state and federal levels. Stick with it: It will have a lot to do with how much you pay for cable and internet—and it will have a huge effect on City-Parish revenues with an indirect effect on how much tax you have to pay for basic local government services. (This document should every bit as important to you as a sales or property tax ordinance–and will probably have a bigger effect on Lafayette’s future than any single tax ordinance ever has.)

As Blanchard points out, the oddity in this agreement is that it will require LUS to pay itself (for attaching to its own poles) and to pay its parent organization (LCG) a fee to access its own customers over the rights of way LCG owns.

That does sound a bit strange doesn’t it? Why bother? Doesn’t this just introduce odd inefficiencies and distort costs?

Yes, it does — and it is intended to. On to the story behind the story.

Some State of Louisiana Background:
Loyal readers will recall (1,2,3) that BellSouth (now AT&T) and Cox pushed a law through the Louisiana legislature back in ’04 shortly after LUS announced its intentions to build a fiber-optic network. That law was intended to stop Lafayette from building a network at all. That story is a long and ugly tale of corporate lobbying and legislative foolishness that LPF covered extensively. Luckily Governor Blanco forced a compromise on the legislature that let Lafayette go forward — but the rewritten-by-committee bill left Lafayette open to legal challenges and imposed a minefield of restrictions and regulations that apply only to municipal telecom utilities. Regulations, that is, that apply only to Lafayette.

Flying the flag of “free enterprise” the two enormously powerful wireline cable and phone monopoly enterprises played the poor-me role of disadvantaged competitors who needed protection from the competition threatened by the city of Lafayette’s local electrical, water, and sewer utility. Lousisiana’s legislature rushed to protect them from this threat. Prior to this law LUS and Lafayette could have simply started up a utility in this area–as it can in electricity or sewerage or natural gas–without any heavy-handed restriction by the state. There would have been no legal basis for a lawsuit to try and prevent it and no way to impose special costs or regulation only on a utility owned by the people of Lafayette. The Louisiana “Fair” Competition Act changed that.

The law provides for a way to drive up the “paper” costs and a regulatory mechanism for ensuring that those higher costs are actually paid by the customers of LUS’ Fiber division. LUS is required to, for instance, pay itself a fee for the use of its own poles and the rights of way that the community owns that is the same as it or the city would charge private companies. (Note that LUS already bears the real cost of building, maintaining, and replacing that property and that those costs are not subtracted from these state-imposed fees. We, and only we, pay twice.) These pay-it-to-yourself “costs” would merely be the silly imposition of a paper shuffle if the state had not required that those costs be passed on to the customer. But that is what the law does.

What is interesting is that the state constitution specifically outlaws using the Public Service Commission (PSC) to regulate publicly owned utilities. (Based on the presumption, I assume, that we as both owners and voters can do that for ourselves.) Since using the PSC to regulate public bodies is illegal, the tortured solution was to place the supposed responsibility in the hands of the state legislative auditor, who has neither the expertise nor the staff to do the job. Recognizing that “problem,” the (un)Fair Competition law directs the PSC to both suggest rules to the auditor and to then enforce those rules. This is pretty transparently an evasion of the state’s basic law but, hey, they write the laws, right?

Even more interesting, the regulations that the PSC are required to enforce are designed to raise the costs to the consumer. If that seems to you like a funny role to ask a PUBLIC Service Commission to play, I’d have to say it seems odd to me too. I had thought the role of the PSC was to protect the public from being overcharged or taken advantage of in other ways. I was not under the impression that it existed to protect large corporations from competition. Silly me. My guess is that the folks over at the PSC aren’t all that happy about it either. It is not the job they signed up for.

The central mechanism that these PSC/Legislative Auditor regulations use to raise your rates is to tote up all the costs to LUS from equipment costs, to billing costs, to interconnection fees, to salaries, to taxes, to pole attachment fees, to franchise fees (the latter two are the elements being considered by the Council Tuesday). The will use a baseline industry cost based in part on what the incumbents say their costs are to establish a “fair price” that must, by law, include the costs to “rent” property they own and fees to use poles that they have already paid to install and maintain. They will then set a minimum price that LUS must charge. Slow down and read that again: they set a minimum price. They will NOT allow LUS to charge you the least that it could…they will force Lafayette’s utility to charge more than it would have to without a set of regulations that force false costs on it.

This is all transparently designed, not to force “a level playing field” or “protect the public” as the incumbent providers claimed in the legislature; it is designed to limit the price competition that LUS will provide AT&T and Cox in Lafayette. Cox and AT&T don’t want to be forced to lower their prices to compete in Lafayette. They most especially don’t want to be forced to lower their prices to compete ONLY in Lafayette. That would make it all too obvious that public utilities like LUS could be a success and provide real value to its citizen-owners. LUS would be a “bad” example for other communities; one that might encourage them to do for themselves what Lafayette has done.

And that would never do.

The Federal Regulatory Issue at hand:
Now all this messy state law and regulation might be preempted by Federal regulation — without the benefit of an enabling law. (I know this is getting convoluted. Stay with me for a while longer; it’s important. 🙂 )

The FCC just this past Wednesday gave “relief” to cable companies on the issue of franchising in a partisan 3-2 vote. This ruling is yet another extension of the FCC’s decision to insert itself into the national franchising issue. The ultimate outcome is pretty disturbing in that the ruling will pretty much will allow a cable company to quit honoring any part of its franchise contract it doesn’t like beyond the monetary fee. Look for support for AOC and governmental networks to vanish. Whether it allows any cable company to immediately quit honoring its contract is in dispute. (Didn’t know the FCC could abrogate contracts? Me neither.) Earlier remarks by the FCC chair had indicated that it wouldn’t void current contracts.

The History:
State and federal franchise issues are also topics that have been covered on these pages, but in synopsis: The incumbent phone companies, lead by AT&T, are determined to get into the cable business. It is easy to see why since estimates I’ve seen show the profit margin at somewhere between 40 and 60% and their own year-to-year reports show that their core business, landline phone service, is declining every year even with margins cut to the bone. But the old Bell phone companies don’t want to have to follow the same rules that cable did in developing this lucrative market: they don’t want to have to go to the public bodies who own the land and negotiate a franchise contract to use the public rights of way. Their first tactic was to go to state governments and get them to take over the localities property rights and establish a state-wide franchise that allowed the state to control the money and disburse it to the localities. Not surprisingly state legislators found shifting this power into their hands an attractive “pro-business,” “pro-competition” policy. This state-level tactic worked in the early rounds but then the municipalities began to unite in opposition and the laws were more and more often either vetoed (as Blanco did here in Louisiana) or defeated in the legislature.

With the preferred state-level alternative failing the phone companies turned to the federal government. They first asked the FCC to establish a federal-level franchising regime. (This is essentially what they have for phone service–the feds reached down and simply “took” state and local rights of way and allowed the phone monopoly to use them for free. This was in an earlier, less ideological, time and for the “good” cause of universal phone service and no one much objected.) The FCC demurred as the Congress was in the midst of gearing up for a major rewrite of telecommunications law. At that point in time no one had any trouble believing that the incumbent providers would mostly get what they wanted. But then AT&T’s CEO went and started the big war over Net Neutrality and the whole bill went down in flames. (Comcast has recently restarted the controversy.) Congress considered but was unable to pass a law that would have redefined franchising.

The FCC then stepped in, and in the face of a obvious lack of Congressional support for the idea, decided to do for the phone companies what they had previously directed the Bells to ask Congress for: they instituted a regime that removed much of the control of rights of way from their local, municipal owners. As you might imagine, lawsuits are underway that argue that the FCC has overstepped its boundaries and is attempting to legislate by regulation. The FCC ruling forbade local governments from requiring cable franchisees to serve the whole community (“buildout” requirements); and basically it forbade municipalities from asking for asking for much of anything beyond money—which was already strictly limited by federal law. As a consequence all sorts of contracts between local governments that cut deals for schools or police or government office, and deals that supported local media like AOC with funds and channel space to provide coverage of city-council events and locally produced programming are all now on the chopping block. Those contracts, by federal fiat, don’t have to be honored. And the city cannot try very hard to negotiate a better deal (not that much is left to “negogitate”) since the FCC imposed a “shot clock:” if the city and the corporation cannot reach an agreement within 90 days the corporation can simply go ahead and provide services without finalizing a contract. (The room for abuse ought to be obvious–localities will have no leverage whatsoever and could easily be reduced to agreeing to whatever the company decided to hand out. Remember, generosity is not a trait of these fellas.) It goes without saying that without any real leverage the local clauses that insure that providers meet service requirements to customers goes out the door.

So does that mean that LUS could decide not to honor its contract too? No, there is no practical way that LUS is not going to meet the obligations it makes with the people of Lafayette…it is a public body and it will not desire to and will not be allowed to simply stiff the city-parish. But Cox, who you will recall, suggested the legislature fine the citizens of Lafayette $900,000 if they had the nerve to vote for fiber, is surely resentful enough to pull back from any contribution to our city that does not look good on a sponsorship form.

Conclusion:
So that, as Paul Harvey might say, is “the rest of the story.”

LUS is going into the Council on Tuesday to discuss a franchise agreement for its fiber-optic based cable system that will be shaped by the requirements of a state law that was initially designed to kill the project. Instead of being a document that we could proudly point to as a one which sets out the unique and forward-looking obligations of LUS to the community and its customer-owners we will likely get a defensive document that promises no more than what the city fathers could extract from Cox in the last contract round. The strange franchise and pole attachment agreements that LUS will sign with itself are by-products of the (un)Fair Competition Act and its resulting, anti-consumer regulations that are designed to drive up the price of LUS’s services and so minimize the competition it can offer its citizens. To add insult to injury, federal intervention may well result in Cox deciding to abandon most of the very franchise agreement that LUS will be imitating while LUS will, regardless of federal “relief,” will be obliged by its ownership and the aforementioned law to fulfill its contractual obligations regardless of the competitive disadvantage at which it is put.

I think that’s all pretty sad and more than a little sick. I hope you do too. We’ve earned better than a me-too franchise with our local communications utility.

Welcome to topsy-turvy world of American Broadband Policy as it plays out in real local communities.

Community Broadband Act moves to the U.S. Senate

Following up on an old story made new again…

The latest Community Broadband bill has been reported favorably out of its Senate Committee and will face a vote on the floor of the Senate. Partisans of Lafayette’s fiber optic network ought to drop a line to Mary Landrieu and David Vitter insisting that they vote to make the bill federal law.

From the MuniWireless short:

It should never have required a proverbial “act of Congress” to insure that local government could make decisions aimed at lowering access rates and promoting economic development in their local communities. And yet, it did.

Or, rather, so it will. This story began back in 05 when Senators Lautenberg (D) and McCain (R) promoted a bipartisan bill that would have guaranteed that no state could forbid local authorities to provide telecommunications services. At that time Lafayette’s high-profile fiber fight was underway and it was said that the behavior of the incumbents helped the bill gain traction. But not enough traction. It was eventually folded into the 06 effort to pass an omnibus telecommunications bill–the bill that went down in flames in the aftermath of AT&T’s net neutrality faux pas. This year it is back as an independent bill.

Over the years it has gathered an influential bevy of seven co-sponsors ranging from McCain and Kerry to Inouye and Stevens (he of “the internet is a series of tubes” fame).

So write to Landrieu and Vitter and suggest that they support the cause.

You might even want to urge them to suggest a simple ammendment prohibiting the cruel and unusal punishment of local communities: add language prohibiting the state from imposing special disabilities not applied to other public projects or private businesses only on public telecom projects. The bill as it stands only forbids a law that bans or has the effect of banning local government participation. That leaves a huge amount of room for mischief of exactly the sort that BellSouth/AT&T and Cox engaged in with the Louisiana (un)Fair Competition Act. That law in its original form would have had the effect of forbidding municipal participation. But th e law that passed “merely” imposes enormous disabilities that on our public utility that would outrage BS/AT&T should anyone even consider imposing such on them ranging from special requirements for public planning to forbidding the use of the system’s financial resources, to shutting down the business automatically if it should have a bad stretch, to a completely unique and possibly unconstitutional regulatory apparatus. I don’t think there is another city in the state that has the cojones for this fight–in effect it is and was intended to be prohibitive. Only Lafayette’s unusual courage and determination allowed it to get this far–and it will continue to be restricted in damaging ways.

But the sad truth it that by perservering against all the odds Lafayette has proven that it can be done. And so the law will not be viewed as prohibitive and will likely become a perverse template for use in other states.

The suggested new language prohibiting “cruel and unusual” punishment of local communities would help us–and would help a lot of communities that might face a law like Louisiana’s.

Go ahead, drop David and Mary a note suggesting that they help ban the cruel and unusual punishment of their local communities by supporting a strengthened Community Broadband Act.

“U-Verse in BellSouth Territory?”

DSL reports asks whether U-Verse, AT&T’s cable-like video service, is every going to be seen in former BellSouth territory.

AT&T says: Yes…soon…in Atlanta.

The question arises because U-Verse has so far only been seen in former SBC territories–where it has been taken up by 100,000 users–not in any of the areas that were BellSouth territory before the merger. Denizens of the deep south have felt somewhat neglected.

AT&T’s offering is interesting chiefly because it is a pure IPTV play; it uses the language of the internet. Verizon, which is driving Fiber To The Home, is using what is really cable technology on its video side. AT&T had considerable trouble getting the technology off the ground but now appears to have a usable product.

The telephone company insists that its product will be competitive but considerable doubt (aired in the article linked to above) exists that this is true. The concern is bandwidth contrainst will keep it from competing adequately on the broadband side (where its speeds do not match even current cable offerings) or on the video end (where many doubt that it has the bandwidth to offer dual HDTV streams). The basic problem is its last mile twisted copper infrastructure. There’s only so far you can push old copper–and the phone companies are much closer to the practical limit than are the cablecos.

What most folks seem to expect is that bably Bells will follow the same pattern in video that they have with broadband DSL: offer a slightly inferior product for less–and offer it in some places where cable does not go. Unless they launch a really aggressive attempt to win market share by offering a superior product (as Verizon appears poised to do) the cable companies immediate fiscal interests are served by keeping their higher prices while loosing a few marginal potential customers to a low end phone offering. –Such is the nature of duopoly markets; competing on price is avoided where ever possible. Market segmentation is more profitable for both.

That (basically humiliating) strategy might work in most places to keep AT&T and the other phone companies afloat but it won’t work in Lafayette where AT&T will be a third-best, not second-best network. They’ll be trying to stand against a competitor in LUS who is clearly determined to undercut the market price of the incumbents using more capable technology. LUS clearly wants to be a broad-based utility and not a player in a segemented semi-monopoly market. Its market plan to lower prices across the board by 20% leaves no room on the bottom for an also-ran. And, incidentally, that same plan leaves no rich pickings on the premium tiers for Cox to use as a consolation for letting the bottom go.

AT&T makes no bones about the fact that it is NOT planning to deploy even the modest U-Verse to all its customers. Its plans work out to serving only about 50% of its customer base even if it mets its buildout goals. And the customers it will not be serving are its “low-value” ones….you and I can both guess how Louisiana shows up on such a ranking.

So the real question is whether AT&T will ever show up to play in the Lafayette market. Louisiana markets, like Southern ones more generally, are markets with lower per capita incomes and hence are marginal anyway under the AT&T game plan. The added challenge of coming up against a local, fiber-optic utility which starts out with prices low enough to destroy your margin may convince them to simply stay away when contemplating the extra costs of upgrading their local net to support U-Verse.

Cox has made its determination to compete plain. But in Lafayette Cox will play the unfamiliar role of the second-best network against LUS’ fiber. And LUS won’t be interested in taking up Cox’s place in a duopoly market…it will compete for the lower-end customer as determinedly as it is allowed to by Louisiana’s regulatory agency. (Only in Louisiana would a law be enacted that mandates only regulations that limit the cheapest price a utility can charge the consumer—erecting rules that prevent it from ever charging less—without hinting at limits on the most a utility could charge…unhappily that is precisely what the Cox/BellSouth-sponsored (un)Fair Competition Act does. Go figure. (Go figure that the incumbents understand their difficulty well))

LUS, in this one smallish city, is about to break open a cozy market duopoly that elsewhere in this country will surely solidify further as cable and phone networks seek to secure the best return possible out of their differing network capacities and costs.

I do hope the rest of the country posts a quiet watch on Lafayette. What emerges here will be a lesson in what, in a better world, competition in the telecommunications market could look like.

Cox Employee Causes BR Phone Outage

An outage in Cox’s Baton Rouge system earlier this week was apparently caused by a disgruntled employee according to a story carried in the Atlanta Business Chronicle:

After being asked to resign, Bryant remotely shut down portions of Cox’s system, causing the loss of computer and telecommunications services, including access to 9-1-1 emergency services, for Cox customers in Dallas, Las Vegas, New Orleans, and Baton Rouge, La. Cox technicians restored service within hours.

This follows Cox’s apology for a “widespread outage” in their cable systems early this week which is likely the incident to which the story referred. In probably unrelated news of Cox troubles, a friend here in Lafayette reports that the LPB channel out of Baton Rouge was so pixelated throughout the showing of “The War” last night that it really wasn’t watchable. Everyone has their occasional problems but it’s not been Cox’s best week.

Cox & UL Athletics

Cox has rolled out the first really big shot in the upcoming war with LUS; KATC and a post to the Independent blog reveal that it has spent two million dollars to purchase:

…exclusive rights to telecast replays of coaches programs, sporting events and university athletic programs on any of its cable systems, affiliated regional sports channel or programming network.

In the land of marketing this is a big deal…a very big deal.

The contract also includes, less importantly in my judgment, some pointedly described fiber connectivity and renaming/branding rights. Look to see “Cox” perpended to “Ragin’ Cajuns” on buildings, shows, the scoreboard and wherever fine UL products are sold.

On the ground in Lafayette it means that Cox can control the video marketplace for UL sports. If you want to watch endless reruns and postgame analyzes of UL sports you’ll have to subscribe to Cox. In a city where the successful pro fiber grassroots organization emblazoned all its advertising with the red and black it’s one more element in Cox’s campaign to overcome the anti-Lafayette label it was tagged with during the fiber referendum. (Cox has shown an acute awareness of LUS’ local advantage in ways large and small; from hiring the locally connected daughter of the sitting governor to make its announcements, to sponsoring dinners for the local black chamber, to, now, grabbing the Ragin’ Cajuns aftermarket. Cox understands that their prior behavior has created their largest marketing problem—and they’re doing what they can to counter that history.)

What’s LUS to do? There’s very little that they can do. This is one of the places that Cox’s size and financial reach make a direct answer impossible. Cox supplies cable to all of Acadiana and can distribute the cost of this purchase over every cable system they own in the region. [The red blobs at the map on the right; click map for a larger version] No single-city provider, no matter how loyal a booster of the university, can afford to match what Cox can afford to pay if the university makes it into a bidding war for an exclusive contract. And, anywhere Cox is not competing with an alternative wired provider, they can take a little cost off the top by leasing it to that non-competitor.

The Backstory: The feds
They will not have to provide this programming to anyone that they don’t want to—and in Acadiana that means Cox will not sell it to LUS or the satellite companies. This sort of tactic has a pretty long history especially up east there have been bitter complaints against cable companies that secure exclusive rights to regional sports programming and refuse to resell it to competing wireline overbuilders (like LUS) or to satellite providers as a way of controlling the fan base.

It may (or may not) surprise you to know that this sort of thing was almost outlawed a year ago. The omnibus telecomm bill, that was only derailed when the net neutrality issue blew up unexpectedly, called the tactic anti-competitive and would have ended it. Cox is taking a bit of risk—a two million dollar risk—that the current congress won’t casually outlaw the practice. The short version of the story is that locking new competitors out by using regional sports loyalties is pretty clearly anti-competitive. [How long is this contract? No one seems to say. KATC tells me that the period is a lengthy 10 years of exclusivity…$200,000 dollars a year.] And sports fans are the sort who, rightly, get upset and complain when they understand that their local loyalties are being exploited for the business benefit of media machines. They’d like to get it declared anti-competitive and illegal.

In fact it has been outlawed for any satellite-provided material. The satellite companies successfully lobbied to force vertically integrated media conglomerates that owned both television or movie programming and cable companies to sell critical programming at a reasonable price. That is why DirecTV can buy HBO programming (which is owned by Time-Warner cable) for a reasonable price. But the tool that the feds used to regulate it was satellite feeds—the big cable companies only had to sell it to satellite companies if they used satellites to distribute the feed. The idea back then was that the only reasonable way to distribute serious programming was via satellite uplink and downlink so distributing the feed to satellite companies would be trivially easy. However, in order that the cable companies wouldn’t have to mess with demands to redistribute the many little shows that were locally produced shows (like those shown on AOC) that were transfered to regional affiliates over wire were excluded from the rule.

That made sense then. But things change and the rise of the gigabit internet has now made it feasible—and in some instances cheaper—to send massive amounts of video over the backbone, especially if you own regional fiber. (You can bet that AT&T won’t bother to invest in lots of little satellite download dish farms as it rolls out its video services.) The UL deal exploits is what is known in the trade as “the terrestrial loophole.” As long as cablecast regional sports “networks” (the tiger network, the ragin cajun network) use landlines to transfer the programming to local cable providers they can cut anyone out of the deal that they want.

But all that it would take to close that loophole would be the stroke of a legislative pen.

This is (another) one of those moments when Lafayette cannot simply go its own way and pursue its own interests. The federal legislature should act on issues like this and push the FCC, which under this administration, and frankly the last several administrations, has shown no inclination to police the media megacorporations that are the field on which modern politicking is played out. In a brief moment of irony Lafayette’s best hope for gaining access to UL programming is the hope that AT&T and Verizon will be successful in their ongoing lobbying to close the terrestrial loophole.

UL?
The real question for me is: What is going on with UL? Cox is easy to understand. But UL has to understand that it is taking advantage of an opportunity that the people of the Lafayette community have created. Without the looming threat of competition from LUS Cox wouldn’t bother to pay much for a product that no one else was in a position to sell. Cox could have given UL a couple of million anytime it wanted to in the last decade or so—and didn’t. It is not generosity that motivates them. Cox chooses to do so today because it is looking for a way to staunch the inevitable bleeding that will begin the moment a popular locally-owned competitor rolls out a competing video product. But from UL’s point of view they had to choose between 1) an exclusive, very lucrative contract with Cox this year that will, in all likelihood, result in limiting viewership by the 50% in their hometown that choose to buy from LUS and 2) Two non-exclusive contracts two years down the road–both likely well above what they’re getting now but likely not equal to the pot that Cox is offering now–that would serve the entire loyal fan base they’ve developed in their hometown. The choice was between cash and developing their local fan community.

The University opted to trade cash for loyalty. It’s probably a good business deal. But is doesn’t serve the fan community—or other local university loyalists—well.

If you thought the horse farm deal and a determination to sell off that property before a new president arrives showed a lack of community of awareness bordering on hostilty toward Lafayette on the part of the outgoing Authement administration, the Cox deal will only confirm your suspicions. A new university administration can’t come soon enough for Lafayette.

Update 8:10: I ran down an announcement of the deal on the ULL website. It’s remarkable for two things—one which does and one which does not appear:

Industry Woes and State Law Limit New Orleans’ Wi-Fi

New Orleans’ hardest hit neighborhoods won’t be getting the wifi system it was promised.

According to an AP story available in print from the Advertiser, online from KATC, which is apparently based on an article from the Times-Picayune, Earthlink is pulling back from its commitment to expand it wifi network into the areas hardest hit by the levee breaches following Katrina. (See Earthlink’s current coverage area at right.—Click for a larger image.) That’s a blow to those who are fighting to rebuild their lives in the worst-hit areas. In the words of a local blogger who assessed the situation last year:

In a nutshell, if your neighborhood did not flood, then you have access to free WiFi, but if your neighborhood did flood, you’re out of luck. The city says the service will be free as long as the city is rebuilding, but the service is only available in places that didn’t flood, and hence don’t need to rebuild. I would argue that the flooded neighborhoods need the WiFi access more than anywhere else in America. For example, I won’t be able to get a phone line working in my house for years, and with information and building permits online, it would make much of the rebuilding process easier and safer.

Earthlink is a partner to the woes that have beset the concept of municipal wifi as a competitor to landline services; a problem that has recently been commented on here. Basically, offering wifi as alternative connectivity to the public based on advertising and subscriptions to higher level tiers has not worked out financially. Earthlink and other participants are demanding that the cities step up and guarantee their income by becoming “anchor tenants.” When you get right down to it that means is that the cities would guarantee the private concerns enough income to provide a secure basis for their making a profit. —It’s not a terrible deal since muni wifi offers a potentially large savings for all sorts of city services (from police, to fire, to emergency services, to meter readers, to code inspectors and more…) that are currently tied into expensive cellular services. Cities like Corpus Christi claim to have saved a bundle.

However the bottom line is that there is no denying that the new business plan of the private providers is for cities to guarantee their income with long-term fixed-cost contracts that guarantee an at least marginal profit for private providers.

But is subsidizing private profit a good deal for the cities? America’s cities, legally dependent on the states, and possessing no independent power, are perennially underfunded. New York, not long ago, almost went into bankruptcy. New Orleans couldn’t afford to rebuild something as basic as its sewer system before the storm. If the cities were allowed to build their own telecommunications systems the expense would easily be paid for from the savings to city services alone. Selling access to citizens would keep dollars in the city and help rebuild a crumbling income base whose erosion has kept city centers that are vital to our economic growth blighted and decaying.

Unfortunately, cities are seldom allowed the freedom to take care of themselves and their own citizens internally. The states have often, commonly at the behest of a single monopolistic outside corporation, effectively forbidden municipalities from providing their own telecommunications services.

That has happened to New Orleans.

New Orleans, long-term readers will recall, is a victim of Lousiana’s famous Muncipal (un)Fair Competition Act. New Orleans has already built a well-regarded municipal wifi system in the downtown area that provided for safety and police functions. When Katrina hit one of the success stories was that network which was quickly repurposed to provide wireless communications in a city where the private infrastructure had been wrecked. Volunteers, using materials generously donated by corporations, extended and upgraded the system in the initial days and months after the storm and the city opened up the network to citizens whose phone service and commercial connectivity was down. It was the feel-good story of the early days: hardworking, visionary local officials, in concert with a flood of talented volunteers, and the generosity of Americas’ telecom equipment providers, cobbled together a bright, shiny, new free muni wifi system—the first of the nation to go into operation.

That happy glow was not enough to save the system.

That Municipal (un)Fair Competiont Act forbids municipalities offering their citizens telecommunications services (wired, wireless, or carrier pigeon) that is in excess of 128 k unless they go through a complex, legally ambiguous battle, with the well-funded incumbents. The law was passed in response to Lafayette’s initial discussion of a retail Fiber To The Home network and was the incumbents first, nearly fatal blow to the project. As it was finally enacted even if a city succeeds it is still subject to a regulatory regime that does not apply to their private competition and which is enforced through an entirely new mechanism created to evade the state constitutions’ prohibition on regulating municipal utility functions. That regulatory regime is openly designed, not to protect the municipalities’ customers, but to protect their entrenched competition: it sets no upper limit on what muncipalities may charge, nor does enforce any quality assurance procedures. What it does do is set a lower limit on what a municipality may charge by insisting that the rate structures never show a loss and that “no loss” be defined in terms of what would be profitable if the municipality had to pay taxes to itself and other governmental agencies and pay itself for the use of its own poles and rights-of-way!

It is a thorough incumbent-protection act that stops just short of outright prohibition and does its best to make sure that even municipalities that win through to owning their own system will face unfair disadvantages during the operation of its telecommunications utility.

It is understandable that, in the wake of the storm and lead by a mayor who had once run the local Cox network, New Orleans would not choose to go through a long battle to keep its network when the emergency status that kept it legal expired. Instead they turned it over to Earthlink with the promise that Earthlink would expand the network into redeveloping areas and provide the leading edge of the spear in battle to reopen the flooded areas of the city. That won’t happen now.

The bright promise of a municipal network that would lead development instead of profiting off the struggling people of the city has, sadly, faded.

—————-

The dark side of US federalism can be found in the way that its greatest cities, the engines of economic growth and the potential seat of political power, have been kept impoverished by state-level political resentments. New York and Philadelphia, for instance, have, like New Orleans, long been kept on a short leash by the states whose wealth and position of influence in the union depended upon them. The rise of a unified city electorate that distrusts state power and hangs together in support of even unsavory local political machines is as much an indictment of how the cities have been treated by “upstate” politicians and their resentful constituencies as any ‘innate’ urban corruption. There is perhaps no better example of this dynamic than Louisiana where cosmopolitan, Catholic, liberal, and yes “chocolate,” New Orleans with its fleshpots, Creoles, Mardi Gras, and French traditions remained leashed to a state whose political engines were controlled by those who were offended by most of what made the city great.

The state’s people, organized by their local communities, should pursue the complete repeal of the law that keeps New Orleans from taking care of itself. Lafayette, the original target of this malign law, who has won through to having its own fiber network, is now morally obligated to lead the way.

Credit Where Credit’s due: Cox & Privacy

Credit where credit is due: Cox Communications, according to an entry Wired’s “Threat Level” blog, is doing as right by the public in regard to their protecting their privacy from illegal government intrusion as is permissible.

Kudos.

Currently in Lafayette, and much of Louisiana, the choice for telecommunications services is between Cox and AT&T. If protecting your privacy from illegal government surveillance is important to you it appears that you’d be well-served to switch to Cox. (AT&T has been nailed repeatedly for complying with illegal requests.)

The blog entry is pretty much a set of reporters notes on a story he wrote for Wired, “Point, Click, Wiretap: How the FBI’s wiretap net operates.” The main story documents a pervasive network of surveillance with the FBI constantly tied into private providers communications centers across the country using a network physically separated from the regular internet. That network, according to the illustration from Wired at right must run through Lafayette on its way from New Orleans to Beaumont either on I-10 fiber or up US 90 along the railroad..

The FBI has quietly built a sophisticated, point-and-click surveillance system that performs instant wiretaps on almost any communications device…

The surveillance system, called DCSNet, for Digital Collection System Network, connects FBI wiretapping rooms to switches controlled by traditional land-line operators, internet-telephony providers and cellular companies. It is far more intricately woven into the nation’s telecom infrastructure than observers suspected.

It’s a “comprehensive wiretap system that intercepts wire-line phones, cellular phones, SMS and push-to-talk systems,” says Steven Bellovin, a Columbia University computer science professor and longtime surveillance expert.

DCSNet is a suite of software that collects, sifts and stores phone numbers, phone calls and text messages. The system directly connects FBI wiretapping outposts around the country to a far-reaching private communications network.

The backstory is that during the Clinton administration federal law enforcement agencies complaining that digital communications made wiretapping increasing ineffective asked for a law that would force network providers to only install hardware and software that allowed for easy, centralized, information capture by all private network operators. That law, commonly labeled CALEA, passed and was augmented post 9-11 by the Bush administration. An FCC ruling this year extended CALEA compliance rules to all VOIP providers, facility based like AT&T or independent, like Vonage. That, in conjunction with elements of 911 compliance ensures that constant monitoring is possible. (You can, however, personally encrypt your communications though few do. Carrier-provided encryption must, by law, be trap-doored and that trap made available to governmental agencies that legally request them.)

What the story documents is just how the FBI has implemented this law and just how easily it can be and how extensively such monitoring is done.

It’s not news that the large telecom corporations, intricately dependent upon federal regulation to protect their competitive positions, extensive subsidies, and spectrum “property” are pretty cravenly submissive to whatever the Feds ask of them. What is news, in a sort of man bites dog sort of way, is when one of the resists giving the administration anything they want. Qwest has earned kudos in the past and now it appears that Cox has also done “the right thing.” From the blog:

Cox Communications lawyer Randy Cadenhead was also key to the story. Among the things that didn’t make it into the final piece is that Cox is the only major telecom company to publicly publish its forms and fees for wiretaps. That documentation, which doesn’t reveal any national secrets, should be on every telecom’s website, in interests of transparency. Unfortunately, none of the largest wireless carriers do so, nor they, with the notable exception of AT&T, responded to requests for comments on the story.

Cadenhead also noted that Cox Communications did not participate in, or have any knowledge of, other wiretapping programs that have recently been in the news (read: warrantless wiretapping).

Now it should be noted that this leaves open the possibility that Cox simply was not asked to join the cabal. But as the third largest cable carrier and a VOIP leader in their field that seems unlikely. Nor does it mean that Cox hasn’t complied fully with CALEA requirements. They surely have. Now it could be that once locked into an aggregation point on Cox’s network they wouldn’t have to ask Cox to do anything in order to “wiretap”—illegally or otherwise. In which case Cox’s denial would be disingenuous. They’d have a warrant for legal wiretaps and wouldn’t have, and thus wouldn’t “know about,” any illegal ones.

But that caveat aside it does appear that the reporter and the Cox representative believe that Cox is not cooperating with illegal wiretaps. And we know that AT&T is. One more reason to not hang up the phone when that annoying guy from Cox calls trying push VOIP during dinner.

(And, oddly, one more reason to be eager to see LUS enter the market. As a public agency LUS will be no less obligated to obey the law than any private corporation–but they are also, by law, will be unavoidably much more transparent than any private corporation. Public agencies can be required to submit records that make much of what they do visible (rightly so). But what that means to black hat operations like those we’ve seen recently is that those running them would be wise to avoid trying impose their illegalities on utilities like LUS which cannot hide their interactions from public scrutiny.)