Opposition: No Longer Relevant

I just discovered that “RightBlog,” the Advertiser’s weekly political traffic builder from the right, is on fiber this week—and I discovered it isn’t building much traffic.

Apparently published 4 days ago the article dropped into our local pond without a splash–or even so much as a noticeable ripple. There was a time when that wouldn’t have been true. I would have expected that someone would email me, or that it’d show up on my daily google search or during my pass through the local media. I even have another regular search through the topix service that catches newspaper material that doesn’t rise very high in the page rankings.

But none of that worked. Nobody has noticed this essay. Nobody bothered to comment online regarding his minority position on what has been the city’s premier issue for the last few years. Considering the pages of commentary on youthful attire that we are sometimes “treated” to in those forums that lack of interest is telling: the city no longer listens to those that want to complain about a settled question. We want it, we voted for it, and now we are going to have it. The message is clear: we’re not interested. Get over it.

Yes, the postal service lead-in is painfully dated. Yes, the mushy position we ought to be able to have the system–but only if we share it with those that have fought us tooth and nail to kill it rather than let us do for ourselves what they refused to do for us just can’t make much sense to anyone. And yes, the lengthy belaboring of the idea that LUS would bring pornography(!) to town that didn’t exist before is the worst sort of silliness–something that can’t be taken seriously by anyone who has perused late-night cable and the pay-per-view channels from Cox or anyone who has noticed what can be found on the internet that BellSouth/AT&T brings into your home.

But my guess is that the lack of response isn’t due to the considerable weakness of Caudell’s positions. It is due to the fact that the time for such complaints is past. With the issue now settled beyond a doubt what once was opposition is now comes off as nothing but whining. And no one is interested in that.

And that, frankly, is the best news I’ve (not) heard all week.

“City is among creative” (updated)

Lafayette has been ranked as one of the Top 10 Cities in the South for the Creative Class by Southern Business and Development magazine.

So saith this morning’s Advertiser. The phrase refers Richard Florida’s book The Rise of the Creative Class. Florida’s analysis points to the fact that fast, clean economic growth has been associated in recent years with a welcoming environment for the so-called creative class. The thesis runs something like this: Wealth in the new economy flows from youthful creativity. To an unprecedented degree the information economy means that those most productive people can live where they want. And they want to live in a cool place. They want to live in Austin, not Pittsburgh… So Austin booms and Pittsburgh languishes. The conclusion is obvious: if you and your community want in on some of that new, cool, clean, high wage growth you make sure that you provide the sorts of things those folks want. A great music scene, good food, tolerance, outdoor fun, diversity, a relaxed ambiance, low barriers to outside participation in the economy, night life, cool tech, an open politics….and so on.

It is encapsulated in the words of the subtitle to a Florida essay in the Washington Monthly: “Why cities without gays and rock bands are losing the economic development race.”

(If all that sounds somewhat familiar it’ll be because you’ve been hanging around with economic development nerds…or, more likely, you caught a whiff of the discussion surrounding last year’s Richard Florida lecture in the Independent/Iberia Bank Lecture Series.)

That’s the category Southern Business and Development thinks Lafayette excels in. It’s a good place to be. It’s fairly easy to see why Lafayette might have ranked. The cool tech factor would be pretty amazing for a major city much less a smaller, laid-back one like Lafayette. The magazine specifically mentions the Fiber To The Home project that is our focus here–and it has to be a nice feature to think that you could tap into your office net at 1 or 200 meg speeds if you want to work from home this week. There’s nothing more laid back than staying home. The food and the music is legendary and if you travel in Zydeco circles you might think tolerance wasn’t obviously a problem. Cajun and Creole cultures are a huge draw–and huge reason why our talented are hesitant to leave. There’s nothing else in the US like Festival International. Francophone music? Really?! From all over the world? Neat indeed.

Sounds pretty good for the hometown…

Of course the effect is spoiled if you scroll to the bottom of the page and read the irrational—and irrelevant—bigotry in the discussion space spouted by some resentful local fool. Talk about leaving a foul taste in the mouth. And putting a stake right through the heart of any feel-good that you might have been harboring. Jeez.

Update: The Advocate also picks up on good publicity the morning after it appeared in the Advertiser. That version points explicitly to Richard Florida and has the following nice fragment:

In naming Lafayette, the magazine pointed out that while the smallest city on its list, “Lafayette keeps strides with the larger metros with the kind of cultural diversity and forward thinking that sets this creative city and parish apart.”

Lafayette Utilities System’s telecommunications project — which will bring an ultra high-speed fiber-optic network to each home and business in the city — is an example of Lafayette’s risk-taking, the magazine wrote.

“Locals still exhibit proudly a ‘wildcatter mentality’ founded on risk taking and entrepreneurial spirit,” the magazine wrote.

So if you need a URL to send those friends from college that you’ve been trying to entice down here for years you can send them this one without fearing that they’ll have to run into evidence that contradicts the upbeat substance of the report.

Choosing an Engineer

Kevin Blanchard over at the Advocate published a story this morning on the selection process for an engineer for Lafayette’s fiber to the home project. The essentials:

LUS Director Terry Huval said the firm will design every aspect of the network, from the overhead and underground lines to the connections at the main facility and end users.

In addition, the firm will help LUS define the bid specifications to be followed by prospective contractors. After construction begins, the engineers will help monitor construction, Huval said.

A professional services committee will take LUS’s review of the applicants (there were thirteen) and choose three to pass on to Mayor Durel for his selection. The work load on the committee should be light: LUS says that only three of the applicants have the proper work history to qualify them for the job making winnowing down the list pretty straightforward. LUS also has a favorite: the Atlantic Engineering Group.

Atlantic Engineering is arguably the nation’s premier Fiber To The Home (FTTH) engineering and construction group and is certainly the leading such company in the South. Their projects map reveals that they’ve been involved in many of the largest—and most successful—FTTH projects in the nation. Those who have followed Lafayette’s progress closely will recognize Provo, UT (whose mayor has visited in support) and Bristol, VA (the city regularly maligned by Lafayette’s opponents where the current issue is beefing up the system to accommodate unanticipated levels of success). Regular readers will note that Kutztown, PA, the little town that could (1, 2) is also a client.

The CEO, James Salter, has clearly focused the company on municipal operations and is a fiber warrior in his own right having been president of the Fiber To The Home Council and a regular speaker at conferences where municipal fiber could be defended. I saw him present at the Freedom To Connect conference in ‘06 and wasn’t distracted by his “aw shucks” folksy Southern persona. Like sugar-coating on a bitter pill that persona did allow his message on the necessity of dense, municipal fiber to any robust local broadband network go down a little easier with a crowd enamored of “public-private” wifi networks. In the end he received a standing ovation. A later hallway conversation revealed that Salter was just as savvy about the way that the private incumbents blocked such projects and made it clear that he understood how to deal with such obstructionism.

AEG would make a fine choice. Things proceed apace…

Competition, Market Penetration, and the Digital Divide

The International Herald Tribune carried a story not long ago that lead to a bout of reflection about LUS’ telecom utility. It made me wonder: is there a point where marketing and digital divide issues come together? Can serving the common good also be smart marketing?

The Tribune story recounts a situation emerging in France that bears watching here in Lafayette. The French Fiber to the Home market is in the midst of a major expansion and, at least in a few places, these new networks are competing with each other. That is, for the companies, a potential problem. Competing networks must gain a minimum number of paying subscribers per mile (or kilometer) in order to make back their investment. With only one network building itself up it is pretty easy to get the minimum number of subscribers… but with two it is twice as hard….and with three or more there simply may not be enough room in the market for all to survive.

The new entrants are betting that they’ll get a big enough market share to survive. There are only two basic strategies: 1) take established subscribers from the incumbents and 2) create new subscribers. A smart new competitor has a clear strategy for doing both.

In Lafayette
The situation in Lafayette bears a interesting resemblance to the one in France: In short order there will be three networks vying for subscribers in the wired telecommunications market. Cox is and AT&T is preparing to invade its opposite numbers’ monopoly market. LUS will come on the scene with a high-powered, low-cost alternative to both. It’s success will depend upon taking subscribers from the incumbents–and on creating new subscribers.

The basic strategy for taking subscribers from the old incumbents is straightforward: offer a better product for a cheaper price. LUS has made it abundantly clear that it intends to do just that–and with a home-town, voter-approved alternative it should do well on that score.

It isn’t so clear that LUS has a well thought-out strategy for creating new subscribers.

The French Response
French purveyors of high-speed internet are faced with a market in which only 60 percent of the country’s households have computers. Creating new subscribers will mean convincing folks that don’t have a computer that they ought to get one in addition to purchasing the service.

“If one-third of the people in a building do not own a computer and see no reason to get broadband, it becomes a serious financial issue,” Fogg said. “Some Internet companies have offered incentives for people to buy computers, but Neuf has taken it to the ultimate level in offering the computer themselves.”

Neuf (one of the triple-play video/phone/internet providers) is now offering a package called “easygate” which includes a Linux-based computer stocked with open source apps. It is, with inimitable french styling, a handsome box. Flicker user nitot’s caption accompanying the CCed image at left describes its functionality:

“A DSL modem plus a low-end PC in a single box, running Linux, Firefox and a few apps, leased to subscribers of the Neuf Internet broadband service. “

The idea is easy to abstract: reduce the hardware barrier to as little as possible. if a major impediment to selling your internet service is that a large portion of your potential customer base doesn’t want to buy your modem service because they don’t have a computer then put the computer in the modem and lease it along with the modem. They can try it without making a big-ticket computer buy. Neuf isn’t going the pure route, though. If you want to use it like a regular computer you’ll either have to supply the “peripherals” yourself or pony up separately for a monitor and a keyboard/mouse/video camera packages. (See the photo at the top.) To sweeten the pot the computer comes equiped with several specially skinned version of Linux (designed for differing levels of expertise) and an open source browser, word processor, and spreadsheet.

An all-in-one package—cheap and convenient. And designed to grow a new market segment devoted to its supplier, not just to battle for a group of established users who already have equipment and a provider.

With the coming era of convergence the basic impulse represented by the Neuf Easygate package could easily be extended. Settop DVR boxes are rapidly becoming the standard among digital cable customers. What you have with one of those babies is a hard-drive equiped computer with enough firepower to drive digital video—no mean feat. For a minimal amount more that same computer could be equiped with Linux, a bit more ram, another few cheap I/O interfaces and, presto changeo, you’ve got: ……a Tivo. That’s precisely what TiVo is and with several of the major cable companies having cut deals to put TiVo software on their boxes (including Cox (yes, our Cox) and Comcast) TiVo has already designed cable-box software.

TiVo’s settop box deals are proof of concept: you can marry a Linux computer and a settop box. The final step could be LUS’ to take. Why not liberate the computer side of that sort of box? With special software and the coming wave of new, digital TV’s the screen could be the TV and all you’d need in addition would be an inexpensive wireless keyboard and a the purchase of the internet subscription to be online. Putting your internet computer inside the settop box would sneak internet-capable computers into the maximum number of households possible and lower the barriers to entry to the bare minimum.

It’s hard to think of another strategy more likely to grow the market for LUS’ product–nor one more likely to bridge the digital divide.

Maybe smart marketing and pursuing the common good need not be too far apart.

Cox to build Broussard’s WiFi?

There’s interesting by-play being reported in the Advertiser today. The town of Broussard, just south of Lafayette is set to renew its cable franchise with Cox….and install a government-use WiFi system there. Anybody besides me think this is the opening move in a years-long chess match between LUS and Cox in Lafayette Parish and Acadiana? From the short story:

The cable company has agreed to provide the city with wireless Internet for the police and fire departments and city administration. “We’ll pay a nominal fee for the service,” said Mayor Charles Langlinais shortly after the March 28 City Council meeting. “Whether they expand city-wide will be dependent on them.”
One point under negotiation has been the fact that the company is not required to provide service in rural areas, unless there are at least 40 residents per linear mile, Langlinais said.
Langlinais recommended lowering the number to 25 per mile, which he estimated will provide the opportunity for cable to most residents of the Broussard area.

There are at least three pieces of context that a reader should take into account.

  1. Cox does not, anywhere to my knowledge, do municipal wi-fi.
  2. Langlinais has been a very vocal supporter of the LUS project and
  3. Broussard has talked about putting up its own wi-fi system; a system which would have run afoul of the anti-Lafayette “Local Government Fair Competition Act.”

Juxtaposing those three reveals a nexus of conflicting interests and local politics. What’s going on? What are the interests of Cox, the city of Broussard, and local citizens?

Cox:
Why would Cox offer a totally new service to a small town in south-central Louisiana? In doing this Cox is substantially adding to the list of things a local community can demand in its franchise agreements. Every city wants wifi. The cachet of being a wireless city is being pursued by cities ranging from tier 1 cities like Philadelphia and San Francisco to tiny places like Chaska, Minnesota. The idea that just any little city can forgo all the pain of building its own wireless net or enticing a commercial entry with tax funds, tax givebacks, or exclusive contracts in order to get them to do so is just stunning. If Broussard can just attach wi-fi to its franchise agreement upon renewal why can’t anyone? This is a big deal–perhaps a bigger deal nationally than it will be locally.

That Cox is willing to go this far reveals some things: This offer reveals that Cox takes widely-speculated-on elements LUS’ expansion very seriously and feels compelled to respond.

  1. They believe that LUS will build a wi-fi network as part of its fiber-opitc build. (I am confident they are right—but no such announcement has been issued.)
  2. They believe that LUS is poised to extend its retail telecom presence into the parish outside its traditional city footprint. (I think they are right—but no such announcement has been made.)
  3. They are terrified that the addition of wireless services will give LUS a large advantage. So large that they believe that Cox can’t afford not to respond with a preemptive product of its own even if it has to offer it out of sequence with its national plans. (Which, they have hinted, will someday include their own wireless product.)

As a consequence they are willing to use Broussard to place a roadblock to LUS’ expansion to the south even at some risk to its larger corporate interests. The City of Broussard won’t be available as an anchor tenant on any LUS system.

I won’t be shocked if Cox tries to launch such a system in Lafayette proper. But I will be surprised. Competing with LUS’ wireless system will be very hard: LUS will be running off a dense fiber network and that will enable it to run a system that will be as far ahead of other wifi networks as its FTTH system will be ahead of other wired competitors. I expect 30 times the bandwidth provisioning of conventional muni wifi networks. Entering into competition with that could be embarrassing.

Broussard & Langlinais
If Cox’s interests are clear, so are Broussard’s—and Langlinais’.

Municipal wifi is almost universally a mayoral project. Securing a major, new, hot, “visionary” service for its citizens (at no cost) has got to look good to any mayor.

That aside, Broussard is, I strongly suspect, playing a smart game with its franchise agreement. Typically municipalities have NO leverage come franchise renewal time. In the normal course of events the cable company knows that there is no practical chance a competitor will enter the fray and give local citizens choices. Given its practical monopoly status, no city council will dare endanger their citizen’s cable television shows. (You think potholes are a big local issue? Try disturbing a man’s Sunday afternoon football game. Or access to Opra. NO way.)

But Broussard has managed to get city-wide wifi (with a “possibility” of residential access). That alone is an amazing feat. Broussard is also negotiating with Cox for an expansion of its build-out. Changing from a density requirement of 40 per linear mile to one of 25 might not sound impressive to some. Such folks might want to take a good look a map of Broussard. Broussard—much more than any of the other communities surrounding Lafayette—has incorporated huge swaths of rural land with only the spottiest development. Some large tracts have no development at all. Changing this requirement will mean that many new areas will get service (and you can bet Mayor Langlinais knows just who should be grateful). Nation-wide the phone companies are driving hard to eliminate municipal franchising precisely so they won’t have to serve all parts of the community; especially poor and sparsely settled areas. Cable companies have mostly been going along, asking only for an equal ability to not serve whoever they don’t think will yield a large profit. What is not on the table is increasing build-out requirements during franchise re-negotiations.

Should this plan go through Broussard will have pulled of an almost unimaginable coup, getting governmental wifi, a potential retail wifi network, AND forcing Cox to serve a greater portion of its citizens. For this Langlinais and Broussard will owe the citizens of Lafayette who have created a credible competitive alternative to the local Cox cable TV monopoly a vote of thanks. (Eatel’s competition, those with long memories may note, did the citizens of East Ascension a similar favor.)

Citizens
So the citizens of Broussard are in for what looks like a really good deal. At least in the short run. And for as long as neither the Feds nor the state of Louisiana succeed in stripping franchising power from local governments. But the citizens should be going down to the city council and asking some hard questions. Questions which will determine whether this short-term treat is a long-term good deal. I suggest starting with:

  1. How long will the new contract run? How long is the city locked into Cox as its wireless provider?
  2. Will Cox’s system have mobile capacity? (A huge advantage for police and firefighters.)
  3. How robust will the system be? (LUS’ will be huge–potentially running at 30 megs, a speed unheard of in muni wifi.)
  4. Is there any exclusivity element in the wifi agreement? Can others come in and compete?
  5. Does the city have any influence on what Cox charges its citizens in return for use of city-owned poles and rights-of-way?
  6. Is there any revenue sharing on the retail wifi end in return for the use of city property–as there is for Cox’s cable TV product?
  7. Just how “nominal” is the nominal cost for governmental services?
  8. Will citizens be allowed to access the system while on city property–say while doing research at city hall?

One question about LUS’ system is absolutely put to rest by this development. I’ve heard people ask what possible benefit LUS’ fiber-optic network will be to the rest of the parish. I’ve not heard this as much since LUS ran fiber to every school in the parish. But this development shows what an astounding benefit the tonic of even the threat of a little competition can bring to surrounding communities.

FLASH! LUS Announces Plans

(Please note: this was first published on April 1st)

LUS has revealed its Fiber to the Home plans!! Daylight savings glitch apparently causes early release of press release.

After a press release dated tomorrow, Monday, 4/2, showed up in PR inboxes across the city calls to LUS and George Graham (from whose office the missive was mailed) confirm its authenticity. The surprise release gives an amazing amount of detail (7 loosely organized pages) about topics the local utility has always deemed “proprietary information.”

Said Huval:

Yes, It’s real…We just decided that since it has become extremely clear that FOI [Freedom of Information] requests that revealed these details were forthcoming we thought, what the heck; just release them. Besides most of this stuff is either obvious or nothing Cox or the phone company can do anything about anyway. Why not let the community know?

Huval declined to elaborate on what was meant by “extremely clear.”

Major points in the release:

  • The initial FTTH network will be gigabit (not 100 megs as previously discussed in the media.)
  • An 802.11n (N!) wireless network will be built alongside the fiber build. Service will be available as an independent purchase but “will be cheaper in the bundle.” “This,” the release says enigmatically, “will be the Digital Divide offering.” (Side note: deploying “N” implies that Tropos will be upgrading their equipment. Presumably LUS knows something we don’t.)
  • Probably associated with the wireless issue: “The CPE [Customer Premise Equipment] will equipped with a wireless node that can act as a repeater.” (I’m not sure I fully understand that but I think I like it.)
  • Confirmation of the widely reported Symmetric Bandwidth feature is given; uploads will as speedy as downloads, making webmasters ecstatic.
  • “Full Intranet Speeds” will be featured. —What Huval calls “peer to peer” speeds. Every customer, regardless of how much they are paying will be able to communicate at the full available speed of Lafayette’s network with any other customer who also has service—usually a large fraction of the gigabit limit. This is also called a “Digital Divide Feature.” (Now you have a reason to buy a new router to replace the 10/100 switch you bought in 2000!)
  • A kitchen sink philosophy prevails: the network will offer POTS (analog phone) and VOIP; Analog and digital cable over dedicated “colors” as well as a full range of IP-based video products. (Legacy services are said to be ” translated in the CPE?”) Three local companies plan to offer “video-enhanced” security products. Related?: “a high-level API for service interoperability will available to entrepreneurs.” (Again, I think I like that.)
  • And NO, they’re still not saying where the build will start. Says Huval: “That really is proprietary. Let ’em guess or sue.”

Extracted from the depths of the seven page, disjointed, pdf:
Video Product News:

  • LUS will purchase membership in both the the traditional small cable video purchasing coop and a similar, emerging, rural telco-oriented coop “insuring a unique range of products.” (As both a phone CLEC and a small, local cable company they apparently meet the membership requirements of both.)
  • An initial offering of nearly 500 cable channels plus “a similar number of IP ‘channel products'” accessible either through the bandwidth product or the cable product menu. (That latter is very interesting and not something I had anticipated.)
  • A discussion with TiVo is in the works for “field trials of a versatile” TiVo-based set top box with “embedded” desktop, browser, and email functions. (Since TiVo is basically a Linux computer, why not go all the way and just let folks use it? That would kill the digital divide computer issue right there.)

Phone News:

  • Video phones will be available from LUS, at no extra charge, when a VOIP plan is purchased due to a “special partnership” with Motorola. (?) It will not work with POTS plans. If your caller does not have video capacity you will be able to use it as a standard phone. (Let’s presume that you can turn off the camera. It’s a cool idea but I bet my wife isn’t the only one to object.)
  • Wifi interoperability is planned. (No mention of cellular interoperability…though that was discussed briefly at the Fiber Forum.)
  • If you take both phone and internet packages you’ll be able to download your voicemail as MP3s and have your email read to you on the phone. “Up to the limits of your tier’s personal space allotment.” What personal space allotment? That is the only place having some online storage a la Google is mentioned. ARRGGH! (The email <--> internet feature makes better sense if the internet component comes with email addresses and the concomitant web space and net interface–as does Cox and BellSouth’s product.)

Internet News:

  • What? You want more news than Gig intranet bandwidth and upload-download symmetry. Greedy you! OK….
  • LUS is planning on implementing IPv6. Mike tells me to be impressed. Consequently, I am.
  • The “Franchise Agreement” (Had forgotten about that? Me too.) will include support for AOC “similar to the current agreement with Cox” and “broadband capacity to support streaming IPTV and VOD functionality within the intranet” as well. (This sounds technical but will sustain AOC’s community functions as the cable model starts to atrophy.)

Miscellany:

  • Interoperability: A lot of emphasis throughout the doc is placed on interoperability. The API issue cited near the beginning of this post is part of that as are features pointed out that flash incoming phone calls on the TV, Caller ID, remote login to video recording features, etc.
  • The part on the “Franchise Agreement” mentions support for “Digital Inclusion” (Digital Inclusion is the new “less divisive” phrase for Digital Divide issues. Feel free to roll your eyes.) However, I can’t decipher who will charged with doing this range of tasks.

All very, very interesting — as with any real information it raises more questions than it answers. Stay tuned…..I’m sure this will be even more interesting tomorrow.

Links:
To the PDF press release.
KLFY
Advertiser short

AT&T & Cox should reconsider state video franchising

Tis spring and the legislative season is opening in these United States. Our Louisiana silly season won’t begin ’til April but many state legislatures are already in session. An article in the Jackson, TN newspaper reminds us that phone companies are still up to their old tricks. Last year the telephone companies launched a nation-wide push in state legislatures to take control of local rights-of-way away from the cities and counties that own them and create state-level privileges for phone companies who wanted to get int the cable TV business.

Background
Most important of these privileges was state permission to avoid the build-out requirements of towns and cities-local governments that have, for pretty obvious reasons, consistently insisted that if a business wanted to use local property to make a profit off its citizens then offering service to all the citizens was a non-negotiable starting point. “All of us or none” was the stalwart principle. In various places the phone companies have conceded to every other demand from monetary rewards to PEG channels. But they are not willing to give up the competitive advantage over the cable companies of skimming off the cream of the local market. They want to take the most profitable customers and move on with no assurance that their “competition” will ever reach most of the community.

Our legislature fell for it and only the governor’s veto pen kept the state from writing into law a bill that would have solidified the digital divide between poor and rich as well as between rural and urban for at least a generation. (In fairness to individual legislators, it should be said that there was a truly inspirational confrontation on the floor of the Senate. Friends of the people went down kicking.)

On the evidence of what is going on elsewhere this season in places like Tennesse, Wisconson, and it seems likely that Louisiana will again see an attempt by AT&T to ram through a state-wide video law that favors its interests. While AT&T (then BS) found tough sledding early in last season’s attempt to pass such a law after partnering up with Cox and the cablecos they managed to pass a law fairly easily. The new, cableco-approved version would have allowed cable companies to break their contracts with local communities in order to use the same advantages offered the phone companies. The cable companies apparently thought that, on the balance, the new advantages over communities was a decent trade-off for the benefits the bill gave the phone companies in their competition with cable. (Did that dark alliance clue in the legislative majority? No.)

So I expect the AT&T-BS/Cable coalition to be back at the trough this year. With the FCC rule that gave the phone companies most of what they failed to get from the last congress now in jepordy from a resurgent Congress there is no reason to think that the incumbents won’t continue to try and get what they want from the local yokels they’ve taken before.

But whoa up a moment: is that really wise?
Things change. That article from the Tennessee paper contains a suggestive paragraph:

One advantage of the state legislation, however, is that Jackson Energy Authority [JEA] would be able to expand its cable and Internet services outside of its present designated service area, Farmer said.

JEA is Jackson’s equivalent of LUS–the fiber-laying, incumbent-slaying upstart. Incumbents take heed: Lafayette’s own muni fiber optic network is now assured. EATel, the locally owned rural phone company, is building its own fiber network on line between New Orleans and Baton Rouge and has made clear its ambitions for expansion from the beginning. St. Charles parish is contemplating building its own network and looks to Lafayette. Rumors about New Orleans Fiber In The Sewers (FITS) continues to make the incumbents slumber fitful. It’s beginning to look like a trend.

Any and all of these entities could take advantage of the same (still unfair) privileges that for which AT&T/BS has been angling.

That’s not what BellSouth intended. When that law was originally proposed NOBODY that could compete with BellSouth would have benefited. The late inclusion of the cable companies didn’t really change the competitive landscape much. They are already built out as much as they think profitable, new challenges from them were unlikely.

AT&T/BS might want to rethink its position in Louisiana. They’ll be enabling folks who might (gasp!) actually decide to compete with them–and compete at their own game with superior technologies. If the phone company succeeds legislatively what is to keep EATel from deciding to serve, with real fiber, the new mushroom ring around New Orleans–but only the wealthier new suburbs, the local cream, and doing to AT&T what it plans to do to the cable companies: cherry-pick the most profitable areas and leave the rest for the incumbent providers. What’s to keep St. Charles from doing its own network with support from Lafayette’s backend facilities–right down to using LUS’ billing and branding systems? What’s to keep LUS from aggressively moving into every non-incorporated new subdivision in the parish using its now-pervasive fiber backbone that feeds the schools? What’s to keep LUS from being invited into cities as full competitors in places that like what they see happening in Lafayette? With a state-wide franchise: Nothing, Nothing, Nothing, and Nothing.

No doubt LUS, as a municipal entity itself, will not be willing to move into a city without negotiating with the local authorities and sharing income. But that might be a big advantage in the long run. If AT&T really manages to come in, cherry pick the cream, and stiff the cities on income and services it will be a painful, ugly thing as cities take the hit in franchise income. (The cable franchise is usually 3-5% of gross revenues–a critical component of local discretionary revenues.) LUS (and similar entities its example may spawn) wouldn’t have to extract nearly the profit the incumbent desire and could afford to be generous with services and profit-sharing. That could prove very attractive to places abused by the incumbents inevitable move to squeeze the municipalities once the cities are stripped of bargaining power by state or federal takings.

Maybe AT&T will still think the advantages it gains over cable are worth the competition it courts by promoting a law that will give every small public or private entity in the state a license to compete in every corner of the state on an ad hoc basis. Maybe. But a year later it is clear that the decision is no longer a no-brainer with nothing but upside for the company. As the old saying goes: Be careful what you wish for.

Cox’s (and the other cableco’s) rationale for backing AT&T’s law this time around is even less clear than it was last year. The emerging pattern of AT&T predatory build out policies in other states (predicted here at LPF) is now obvious: they take the best and leave the rest for the cable companies who have already built their networks to serve the entire community and have to carry that extra overhead.

Cox Baton Rouge, which now includes Acadiana, is particularly vulnerable: On the south it faces EATel, a local phone company which makes no bones about it desire to bring its FTTH-based cable competition to rapidly growing–and lucrative arc of outer suburbs developing south and east of Baton Rouge. That ambition was spoken before the storms devastated New Orleans and made those areas the new home to much of the population of that metropolis. Should EATel secure that arc it’d be posed to eat into the densely populated segments of the city–but not with AT&T’s barely capable DSL-based offerings but with full throated fiber to the home. On the Western verge of that territory it is now certain that Cox’s largest profit center in Acadiana, Lafayette, will be a profit center no longer. Inevitably LUS’ expansion will come out of Cox’s established base; with few exceptions every cable customer LUS gets will mean a lost subscriber for Cox. That nightmare is visible on the horizon. In short order Lafayette will be one of the least profitable networks in its system, supported by a subscriber base that is a fraction of what headquarters has grown to expect.

No, Cox does not need to add to its troubles by supporting a law written by its deadliest enemy.

Cox has allied with the wrong side. Here’s what would be much smarter: Ally with the Louisiana Municipal Association and the parishes. Join them in suggesting a pre-emptive law that protects local rights and keeps AT&T/BellSouth from securing unfair competitive advantages.

The outlines of such a law aren’t hard to see and could be based on a law suggested by local governments last year. That law offered to put a 90 day “stop clock” on any negotiation with a new competitor, assuring that no one could be unreasonably delayed in entering a new market. If an agreement couldn’t be reached quickly all the competitor had to do was agree to sign on to the same contract the incumbent cable company already had. Easy, fast, efficient, and transparently fair. It was, of course, rejected out of hand by the phone company. Their interest lay in securing advantage, not a level playing field.

This year’s version could look like this, for starters:

  • It should be based on the current local franchise; preserving local control of local resources.
  • It could lay out a reasonable timeline for a full build-out to match the current cable footprint. Small communities could expect to be served by a full competitor in three years and larger cities in, say, seven. That would remove the most anti-competitive aspect of the law, and the one that puts the established incumbent at a permanent disadvantage.
  • It could include a time clock (the cities are willing to agree to 90 days) after which the default “established contract” goes into effect–that would mean no long delays of the sort the phone companies claim to be worried about.
  • The default contract could include certain standard modifications such as: a “revenue neutral” clause for the city; meaning that the extras, like PEG monies, channels, service networks and the like would only have to be provided once…not twice. This could include a clause allowing the new entrant to pay the current provider for providing their pro-rata-by-subscriber share of these services or allow them to take over a portion of the responsibility directly as they expand and acquire the capacity.
  • Also standard could be clauses that provide real, automatic, penalties for not meeting contract requirements like one mandating buildout. To make sure that both cities and competitors are motivated to insist on contract adherence the default contract could have escalator clauses built into the monies paid the city and the incumbent if they failed to meet their promise to compete fully and fairly.

It would make a lot of sense for Cox and the state cable association to get together with the municipal and parish organizations and promote a bill that protects their rights and competitive interests while giving the phone company the quick and easy route to competition that they claimed they wanted last year.

On Really Getting It

One of the most gratifying things about Thursday night’s fiber forum was watching Lafayette’s leaders (and a nice chunk of the community) exhibit all the signs that they really get it. They understand the potentials of the new technologies and have a good sense of how to milk the most out of them. This, my friends, is extraordinary–and vanishingly rare.

There is evidence that they clearly understand: 1) Great things are coming but what those great things are is unknown; 2) that the best thing to do encourage unknown great things is to be generous, and; 3) generosity needn’t cost much or anything.

On Great Things are unknown:
At one point in the night Huval broke into an historical analogy. He said that he felt like his predecessor in in 1897 must have felt when electricity was being introduced. All the questions were about lighting and light bulbs: “What do we do when the light bulb breaks” and much concern was shown about the dangers of sticking a finger in the socket. Nobody knew about radio, or TV, or microwave ovens. The idea, of course, is that the hopes and anxieties of the initial stages of a new technology are incomplete and even misleading when viewed in retrospect. The conclusion is that we don’t, can’t, know all the great things that will result from ubiquitous really huge bandwidth. That’s wise. To believe otherwise encourages folks to build elaborate edifices for a future that is never realized–and that has been the single greatest danger of “visionary” enterprises. But the danger in the wise recognition that you can’t know the future in detail is that it might lead to inaction: there is a temptation to believe that you can’t encourage that which you do not know. That’s not true and these guys are NOT making that mistake.

On designing for unknown Great Things:
There is a way to design a system to encourage unknown great things: Where possible choose networks that leave open the most possibilities for users to “do things” with the network. And once you have such a networks don’t put any limits on users that are not absolutely necessary. That can get technical pretty quickly. But the underlying attitude is not complicated: Be Generous. If you have a choice to make about network design: Choose the more generous network. If you have a choice to make about what a user is allowed to do with the network: Be Generous. That’s a pretty simple and easy to enact principle.

Such a “generous” attitude was exhibited when Huval illustrated how he thinks Lafayette’s network will be different from other networks. Verizon, which has a fiber to the home network with the attendant large capacity, is not offering much of that capacity to its public. It is choosing to merely compete with its cable opponents by offering a little more of the same for a little less. Verizon’s attitude is that if it can’t make a buck off it then it won’t offer it–it won’t give away anything, not even something which costs it nothing. Huval, pointing to Verizon said “our philosophy is going to be completely different” and that LUS will take the position of offering a much as possible as long as doing so doesn’t create an obvious problem with the business plan. Both the decision to offer symmetrical bandwidth and to allow full intranet bandwidth between customers show what decisions result when you take a generous position.

On the idea that generousity can be cheap:
Given generous upfront decisions about the intial design of the network features like symmetrical speeds and full intranet speeds will be very cheap to provide in light of the huge excess capacity the network will have. Making the decision to be generous need not be expensive. This point was made during the discussion Thursday. One man voiced concerns that all the nifty ideas that had been suggested would be expensive and that only some of them could be chosen. Huval seemed genuinely puzzled as he responded that, actually, very few would cost anything. In that he was right…but his point was that he was inclined to do as much of it as he could in that case.

So these guys get it: Generosity pays dividends. We’ve always known this, of course, but it is interesting to find the principle showing up so vividly in the esotoric world fiber-optic networks.

Food For Thought: LUS’ Wireless RFP

A little more than a week ago I posted a piece about LUS’ Wireless RFP (request for proposals) and asked a few questions. Since no one else answered them I decided to go down to City Hall and pick up a copy for myself.

For those who might have missed the story, LUS put out a call for proposals to supply what was described as a wireless network for LUS and city use. No mention of public access was made, though locals familiar with the way that the LUS fiber project evolved from purely utility purposes are reasonably hopeful that a wireless network will evolve in the same way.

The RFP itself is pretty simple as such things go and you have to think that bidders will need to request further specifications. But there is enough there take a stab at answer the questions I asked earlier.

Note: this is an 802.11 “WiFi” mesh network. That’s the same architecture that is being used in metro wireless installations from Philadelphia to San Francisco. For the technically inclined: the hardware standard described involves two radios operating in two different bands. Specifically, the equivalent of Tropos’ most advanced access points, and its software, is specified. (Tropos is the market leader in metro WiFi.)

1. Does it include a very strong backbone “supply” element?

  • Yes, It is hung directly off LUS’s current fiber ring. –It will not be crippled by running off a wireline supply source that has less capacity than it is able to use. (The expense of providing for adequate “backhaul”–and sometimes the ability to find such at any price has been a major limiting factor in most public muni WiFi efforts.)

2. Are upgrade “hooks” part of the proposed deal?

  • Yes, the request makes it clear that there will be at least a “phase 2” (official protestations aside) and that proposal should take into account the networks eventual expansion to full coverage of the 45 square miles of the city. The access point model specified is the first of a new generation from its maker and future models in the family are promised to be interoperable with these and to support emerging technology and standards like MIMO and WiMax and older standards like public safety.

3. Does it assume ubiquitous fiber?

  • Hmmn…well maybe or at least implicitly. Nothing beyond the first layer, “phase 1” is specified. But assuming that what is described for phase 1 sets the pattern for the future it looks like the plan is to make full use of the fiber. Wireless mesh networks are built around ratios between aggregation access points that are connected to backhaul networks and simple mesh network which are only connected to other access points via wireless. Common acceptable ratios are 5 or 6 mesh nodes per aggregation point. All too many systems are using larger ratios and putting up with the resulting performance issues. A gold-plated system would use a slightly smaller number. The ratio LUS is suggesting for phase 1 is 1:1.3. That is astonishingly low and only makes sense where the wireless owner also owns the backhaul network (in our case fiber). Other users would have to pay per drop for their microwave, WiMax, T1, fiber link, or the like and such per drop costs would run up the expenses very quickly. Maintaining such a low ratio would mean deploying a system of pretty astonishing capacity. While policy might limit the bandwidth allowed, nothing in the network itself limit network speeds. They could conceivably run at near the rated speed of 802.11 protocols that underpin it–currently about 54 megs.

4. Does it use owned spectrum for local backhaul? Or open? Or fiber?

  • Fiber. This is certifiably yummy. See above.

5. Does it use open spectrum for the final connection?

  • Yes. This is a “good thing,” for it means that a multitude of low-cost hardware will be able to access the network. Proprietary spectrum has some advantages for local governments and, generally, some is available to it for various safety functions but such networks cannot be practically be opened for public use.

6. What technologies are specified….WiFi, WiMax, etc…?

  • WiFi is specified. The suggested hardware is software upgradeable.

7. What applications are supported; either explicitly or through the specification of indicative standards?

  • Support for a wide range of applications including surveillance video, voice, data, mobile communications-seamless roaming, VPN, and meter reading are in the specs.

Long story short: There is nothing here that would impede using this as the core of a very capable public wireless network. Caveat: there is no particular reason for me to assume that it will be — beyond sheer desire and my own belief that a wireless component will be necessary in the coming competition with AT&T/BS and Cox.

On Killing the Goose that Lays the Golden Egg

The Advocate carries the odd story, splashed across the front page of its Acadiana section this morning, that retells the tale one Steve Pellessier told the Concerned Citizens for Good Government yesterday. Pellessier wants Lafayette to sell off LUS to pay for current shortfalls in road funding.

Thank heaven that at least some folks have a classical education. Joey Durel responded humorously but basically dismissively to the suggestion by saying that do so would be like getting “rid of the goose that laid the golden egg.”

The idea of selling off a consistent money-maker, to the tune of 17.2 million and a quarter of the city-parish budget each year, for a one-shot, quick fix play to meet the parish’s road needs following Katrina & Rita is plain foolish. It has to be one of the purest examples of the lessons of Aesop’s fable concerning “the destructiveness of greed, the virtue of patience.”

First, historically LUS has had lower prices than its private competitors (the current rough equity is unusual) and Pellessier appears to know that. Citizens would end up paying twice: once in the form of 25% higher taxes–the money has to come from somewhere–and once in the form of higher utility bills. Second, and this point appears to have very discretely not been raised considering the current divisiveness of the issue in the council, it would be a sale of city assets to benefit almost solely suburban needs and the downstream cost of more expensive electricity would be borne solely by city residents as well. Politically this should be a major nonstarter. The current push to dissolve the city-parish form of government is mostly based on formless resentment. Any movement in this direct would give that movement a basis in real injustice and a real constituency.

Beyond the foolishness of the idea of killing the goose you’ve got the fact that this goose is fertile. The goose in the fable is obviously sterile–it lays golden eggs but those eggs don’t hatch. It is unique. LUS however is incubating another goose that promises to lay even larger golden eggs. The mere threat of an LUS Telecom network has kept Cox from raising prices. The reality of a cheaper, more capable alternative will save us all a bundle off our monthly bills.

Beyond the cost savings we should all be aware that the income to the city-parish coffers should be substantial. That 17.2 million LUS gives us comes chiefly from electricity…a low-margin utility. The money coming into the coffers from the Telecom division will mostly be from high-margin cable industry competition. How much do you spend on electricity? How much do you spend on cable, internet, and phone service? Think about it…

If there is anything that’s more foolish than killing the goose that laid the golden egg it’s killing one that has offspring that also lay golden eggs.

Though the Advocate story doesn’t mention it Pellessier, in a recent letter, did say that LUS could keep its recently voted-in telecom division. That’s a crock and Pellessier, an opponent of the LUS plan, should know it. Much of what makes the telecom unit economic–and the main reason more cities are not in a position to make the same decision Lafayette has–is that Lafayette already owns and operates the necessary infrastructure in poles and maintenance crews in order to service its electrical division. It is hard not to suspect that a suggestion this off the mark isn’t motivated in some part by left over resentments from having lost that fight.

You’d think a “Certified Commercial Investment Member” — someone who specializes in commercial real estate investments–would understand that trading a growing revenue-producing asset for a one-shot wasting asset is always a bad idea. Don Bertrand makes the point more succinctly:

Don Bertrand said he’s glad to have a discussion about how to fund roads, but that LUS is the city’s best asset. Bertrand said there are other options to raise funding without giving up a revenue-producing entity like LUS.

“When we’re done, we’ll have roads, but roads don’t produce money,” Bertrand said.