Revised LUS Fiber Budget

Both the Advertiser and the Advocate have articles today on last night’s council meeting and LUS’ revised budget. The big news was that LUS will not meet its own revenue projections; in fact they are off by about half…a disturbing shortfall.

Huval’s explanation cites two factors: the lack of initial marketing and defensive budgeting that was designed to make sure that a worse case scenario of having too many customers wouldn’t “break” the budget.

Defensive Budgeting
This is one of those cases where the Advertiser has the better quote:

“We made projections based on the most optimistic approach,” LUS Director Terry Huval said. “We didn’t want to get into a situation where we might have budgeted too conservatively and we don’t have the materials and supplies for the customers.”

To understand what Huval is worrying about requires some background. LUS is in the odd position of having a brand new service that needs to be cautious about growing too fast. Hooking up and initially provisioning each household is a VERY large expense. The labor and materials costs — especially the set of three boxes that sit on the side of the house and the set top box inside the house—are all very costly. It will, in many cases, take several years to recover that initial investment. While the profit margin is good, even with LUS’ reduced prices, you have to invest substantially in each customer. On the books you will typically lose money for a time on every new customer you bring on. As a consequence you might have to look at borrowing more money. For most businesses this would not be something to worry about very much. Any bank could see that you were a better risk for capturing a larger share of your market than you initially anticipated. You’d get your “float” loan.

But LUS is not like other businesses. LUS cannot, practically, go back and get a bridging loan. They have borrowed all their money upfront in the form of bonded indebtedness. Budgeting in this situation is, in part, a way of projecting the “draw” the business will be making against that loan. What Huval is saying is that they originally projected the most “optimistic” draw against the loan so that they would be sure that they had enough money at the ready to buy the equipment they needed to complete the budgetary period without going back to well…So budgeting for the most extreme case was, in this case, “conservative” budgeting. A typical business would typically borrow for its most optimistic realistic case in order to have a little reserve and to avoid having to go back and borrow money again—usually at higher rates. This maneuver is LUS’ equivalent.

The tendency to be conservative here is aggravated by a state law that shapes the way LUS has to assess the risks to its business. And we have Cox and AT&T to that for that: Long-time readers will recall my inveighing against the (un)Fair Competition Act. This is one of the places where that incumbent-written law comes into play. One of the provisions of that law is that LUS is forbidden to loose money for any year. If they do, the law mandates a fire sale of the business. Given that law, you’ll notice that once you understand that LUS is actually investing in each customer that it is entirely possible to be successful too quickly. Suppose LUS took 50% of the market in a single four month period…and then, having saturated the local market it would have to endure a year or two or three of losing money just to pay off that initial investment before the income from the bulge of new customers turned positive. It is far safer to grow at a steady rate as long as you get above the break-even point before the bond money runs out. Losing money too fast is always a problem. But the (un)Fair Act makes being successful too fast a problem too. State lawmakers piously claim that they are just protecting the citizens of Lafayette from losing money. This case makes it obvious that the people that wrote the bill, AT&T and Cox, are the ones being protected. Lafayette doesn’t need or want Baton Rouge’s protection.

Marketing
LUS also acknowledges that it hasn’t run much of a marketing campaign, saying that it doesn’t make sense to gear up a large and expensive campaign if you aren’t yet ready to sell your product to all the people you’re paying to reach. From the Advocate:

Revenues for LUS Fiber this year might have been more in line with the initial projections had the city pushed a more-aggressive marketing campaign, Huval said.

But he said the decision was made to hold back on intensive marketing of the service until it was available to most residents, so as to get the most out of the marketing dollars.

That does make a certain amount of sense. But that excuse is already effectively over—LUS is currently finishing off its build-out. The vast majority of the citizenry is now ready to receive service. So we should now begin to see a much more aggressive campaign. —Though, of course, not sooo aggressive as to run afoul of the (un)Fair Act’s penalty on gaining customer share too quickly. (sigh)

In all fairness, LUS also has another reason not to want to sell too much of its cable product too soon. also been wrestling with the set top box software—the initial software was simply not up to snuff…it provided the fundamental functions in that it would change channels and record material but the interface was outdated and it was clumsily designed. It was even worse than most cable providers interface and that is saying something. With the new Microsoft Mediaroom LUS has come out on the other side–the interface is very slick, it works well and there are obvious hooks left for the development of innovative features. But until that mess was settled and LUS knew that Alcatel was going to step up and make good on its promises LUS Fiber was looking at a situation in which it very strongly suspected that each and every video customer was going to upgraded to a new box and software platform in the very near future. They had little desire to put the whole city on a solution that they would have to turn around and dump.

Take-Rates
The most reassuring part of the story is that the Advocate reports that Huval is saying that they are making their break-even rate—that is, they are getting the 23% of the population they need to win over to break-even and pay back the dedicated bonds. That, frankly, is the only important number—

[Huval] said that even though LUS Fiber is not meeting the early revenue projections, he feels confident the venture is building a solid foundation and will be successful.

LUS Fiber can break even with a 23 percent market penetration, Huval said, and that percentage has been “handily” reached in most areas where the service has been available for more than a few months.

What’s interesting is that while LUS will doubtless get some flack for not meeting its defensive budget estimates nobody is asking what LUS achieving its break-even rate means for the other actors in this little drama: Cox and ATT. Leaving aside ATT for the moment since it is not selling a cable product let’s look at Cox. Nationally the take-rate for cable video is supposed to be about 50%. I don’t have any reason to think Lafayette would be much different. If LUS is taking more than 23% of the local market “after a few months” that would imply that in just a few months—without a very credible set top box arrangement and with very little marketing—LUS can take about half of Cox’s well-established cable video market. That makes LUS, by any reasonable assessment, a very successful competitor.

“The Battle Is Raging for Control of the Internet”

Chris Mitchell of muninetworks.com and his compatriot David Morris have published an article on Alternet and the title says it all: The Battle Is Raging for Control of the Internet — and Big Corporations May Come Out on the Losing Side. While I’m not so sure an upbeat conclusion is appropriate just yet what is encouraging is that there is, increasingly, a visible public position that maybe, just maybe, communities and not massive multinationals should control local telecommunications networks.

When Lafayette first joined battle with Cox and BellSouth (now merged into an even larger AT&T) the cry raised here for local control and independence simply had no national resonance. The idea that local activists and local officials had joined to raise a flag in Lafayette against what was widely regarded as parallel phone and cable monopolies was exciting because it was so unusual…and, well, quixotic. While widely reported, the conflict was also viewed as a David and Goliath story—and while few expected David to win, the colorful locals and bulldog-like persistence drew bemused interest.

That attitude is fading, no doubt in part because Lafayette proved that David actually could beat Goliath. And, having beat Goliath LUS went on to offer stunningly fast service for shockingly little money—just as the little “David” had claimed it could and would. Increasingly, in reportage and on commentary boards I see people mater-of-factly taking positions labeling the incumbents monopolies and asserting that local, utility control is obviously to be desired. That’s not everyone, nor even beyond a few places a majority opinion. But it is visible and insistent and that’s a sea-change for the better.

The first paragraph of “The Battle is Raging for Control” has Harlod DePriest head of Chattanooga’s fiber deployment reprising Terry Huval’s role when he rhetorically asks:

“Does our community control our own fate or does someone else control it?”

You are supposed to know the answer to that question…and that, DePriest clearly believes goes without needing to be said, means that you should support him and his utility’s fiber to the home system.

The article walks through the now familiar argument: the big incumbents don’t have local interest at heart, Federal action has failed to slow the consolidation of local monopolies into a very small cartel of major national players with an implicit pact to not compete locally, as competition falls prices rise, without competition there is little incentive for the incumbents to make the upgrades communities need to sustain clean, fair development and control of their future economies….locals can, and indeed must, take matters into their own hands.

Incumbents have little incentive to lay new fiber. Their monopoly position allows them to continue to reap high profits while amortizing their investments in old technologies.

And when they do lay in fiber we are at their mercy. Karl Bode, a longtime reporter on broadband, notes that Verizon, which has laid the most fiber, has a very low tolerance for “towns or cities asking for much of anything in negotiations.” Verizon shunned Boston when it was asked to pay property taxes like everybody else. Wilmington, Delaware was rejected because it wanted to ensure the company would serve the entire community, not just wealthier neighborhoods. Pointedly, Verizon serves the affluent suburbs of Seattle, Portland and Baltimore, but not the inner cities.

The article is well worth a read, but I close with a bit that uses the advantages Lafayette has brought to its community as an example of differences local ownership and control can make:

Cox Communications, famous in Louisiana for regular rate increases, froze its rates in Lafayette for several years following the city’s initial announcement that it would offer telecommunications services. Meanwhile Cox continued to raise its rates in other parts of the state. The result was that even before Lafayette’s system began operating it had saved its residents and businesses nearly $4 million.

Now that Lafayette is offering citywide services, it is teaching companies like Cox a thing or two about next-generation broadband. In addition to offering the best value in the country (the fastest speeds at the most affordable prices), everyone on the network gets the fastest possible speeds to others within the city’s local network (100Mbps). This approach is spurring a wave of innovation as entrepreneurs and local media activists take advantage of unprecedented speeds throughout the city. Others just enjoy the opportunity to work from home, accessing their local office network as though they were still in the building.

Community broadband networks also offer subscribers something that few private networks do: symmetrical speeds for both upload and download. Internet offerings of telephone and cable companies typically have upload speeds that are about one-tenth of download speeds. Rather than encouraging a purely consumptive approach to the Internet, symmetrical connections allow subscribers to produce content as well, a hallmark of the modern Internet.

We are quickly beginning to take our advantages for granted here in Lafayette. Articles like these remind us that most of the country still needs to replicate the success we are enjoying here.

LUS announces Mediaroom set top box software

At a 2:30 press conference today LUS officially announced the launch of media room with Terry Huval saying that adopting the new software would move the system to the cutting edge of video services and development. According to the press release:

The platform focuses on giving consumers advanced flexibility to enhance their overall TV viewing experience. LUS Fiber is the only provider in Acadiana that has a network capable of delivering Microsoft Mediaroom to its customers. With the power of Lafayette’s only 100% fiber optic network, and the compelling Microsoft Mediaroom IPTV platform, residents and businesses will now have access to world class features not available from conventional cable TV companies.

Current customers are being called and appointments made to replace the current set top box with another containing the new software. The change-over will begin immediately:

LUS Fiber anticipates that the new Video service powered by Microsoft Mediaroom will be made available to all customers receiving new service beginning July 8.

The most visible changes will be in the enhanced capacities of the DVR software that allows recording shows for later viewing.

  • Whole Home DVR
    • Record and watch recordings from any set top box equipped TV in the home, which allows a customer to start playing a recording in one room and finish watching it in another room. Record up to three programs at once – Flexible!
  • Instant Channel Change
    • No more waiting for the next channel to show up. You can scroll through channels with ease to find the program you want to see – Faster! ·
  • Picture-in-Picture Browsing
    • Get a peek at what else is on other channels while still watching your current program – More!
  • Enhanced Search
    • Find shows and movies quickly. This comprehensive search will even check the recorded TV list and Video on Demand offerings – Better!

Terry Huval addressed the question of why the change was necessary:

“During the deployment of our LUS Fiber system, a number of our customers asked us for more advanced video features…Microsoft Mediaroom provides the platform that will deliver the features our customers want and, because it’s a web-based system, it offers us endless possibilities for future applications and expansion.”

That last sentence is the key: LUS recognizes that what is wanted and needed is a platform that will allow bringing internet-based material and methods to your television. The television needs to also become another screen onto the web; albeit one especially suited for showing video and for occasions when multiple people want to view the same material. During the Q&A after the short demo I asked Huval to elaborate on those possibilities. He responded that they anticipated weather and news apps and mentioned putting caller ID on the screen and providing the ability to remotely program your set top box’s DVR.

I talked to an Alcatel rep after the show (Alcatel is the maker of much of the equipment that hangs on the side of your house and pretty much the system integrator) and he said that Microsoft makes the platform that the new apps/widgets/services runs on available to developers as a download. That sounds awfully good; I know that there are a lot of folks locally who are raring to get involved. Alcatel makes some middleware and I presume that is what LUS is using. Linking up the two should make most development possible. That sounds like the avenue for anyone who wants to get ahead of the TV app tidal wave…

Itsa good thing gang. Major media showed up; look for it on your (old-fashioned) TV screen tonight.

LUS’ new set top box software in beta trial

LUS Fiber has begun a limited beta test of its new set top box software—Microsoft Mediaroom. Even in its current state mediaroom is a much better piece of software. There’s been a lot of complaints about the old vendor-supplied software; while it does provide basic digital video recorder (DVR) functionality it did so in ways that were, at best, clunky. A more serious problem was that it was pretty dead-ended; there was little chance that it would be or even could be upgraded to provide for more digitally-enabled advances that integrate phone features and apps and widgets that access internet content.

The new software is most emphatically not clunky; the new complaint will be, of course, that the slick finish and transparencies are naught but “eye candy”—but it is beautiful eye candy. More seriously the navigation interface is much easier to use and some user interface gurus have clearly been consulted. Nothing is more than about two clicks away. With Microsoft as the producer it goes without saying that integration into the world of digital convergence is a major theme. Implementations of mediaroom at other carriers have included many new features along this line including caller ID displayed on the TV and various forms of weather and sports widgets. We’re not likely to see those until the basic DVR and Video On Demand functions have been fully implemented. But this area represents a potential major opportunity for local designers and programmers—Microsoft has a developer framework.

I’ve been lucky enough to be included in the beta test—possibly because I’ve complained to LUS about the software. The installer came by late last week and put it in and I’ve been feeling it out since then. He brought it already installed on a new box that looks just like the old box; apparently mediaroom wants a chipset newer than the one I had.

I like it. So much so that my antique pair of TiVos may be in danger of retirement from their role as my main interface to video—I haven’t used a provider’s interface (Comcast, Cox, or LUS) in more than a decade so that would be a major step for me. LUS’ version of mediaroom not feature-complete at this moment. In particular, the Video On Demand is pretty much unpopulated; the shell is there but the content is not.

Expect to see a few posts about the new software and its implications—more than you’ve seen about the old package. Mediaroom one has far more potential. I’ll write a bit on the interface in another post sometime soon with others to follow. My first interest has never been the cable video side of the network. I appreciate having it, and appreciate that income from it will help pay for the community system. But both my wife and I spend far more time on our laptops than watching TV and I’m pretty well convinced that is the path we’ll all be taking. Mediaroom can open a lot of doors between different screens and bring some of the participatory elements of the net to the TV in much the way that the iPhone brought elements of the net to the cell phone. It’ll be an interesting ride with both its upsides and downsides. By bringing Mediaroom onboard LUS assures that Lafayette will be in a position to ride that wave.

FiberFete 2010 on Vimeo

The Fiber Fete videos are up on Vimeo…production took a while but they are up now, look great and are certainly worth visiting—or revisiting. Thanks go out to Eric Credeur who did the work of editing.

If you didn’t get the chance to go to the conference, now’s your chance. And even if you did now you can revisit the presentations and think through what was said. That’s what I plan to do…The quality of the presentations was really impressive. As I review I’ll post any notes worth sharing.

“LUS fights for acceptance”

Richard Burgess of the Advocate’s article is a good overview of one of the issues that have bogged down channel acquisition for LUS Fiber video offerings—a long delay in gaining membership in the cable purchasing cooperative that provides most small, local operators with reasonable wholesale prices for the channels they offer. It’s not just about getting channels at a reasonable price, it is sometimes about getting them at all. (In fact, getting its channel lineup in shape was so arduous that it was the factor cited in the late launch of LUS services in the first place…that, and not any technical or build issue, was the cause of the brief delay in launching the service from January to February of ’09.)

LUS has had an application in to join NCTC, the National Cable Television Cooperative, for a long time now. I had heard they were hopeful and that there was no legal way to deny their participation. There was a long period when the organization simply had a moratorium on new members that only “coincidentally” effected LUS. Other public power utilities with cable arms have joined the organization previously. The NCTC isn’t a small organization with little bargaining power; the alliance of generally small cable companies controlled what was the second largest subscriber base in the nation in 2004, ranking second only to market leader Comcast according to a public power white paper in 2004 (p. 29). The discount the NCTC can command has to be comparable to that which, for instance, Cox can command.

Cox….that brings up an interesting issue raised but not fully explored in the Burgess article. Cox is a member of the NCTC…but is most assuredly not a small operator of the type the coop was founded to benefit, being the third largest cable company in the United States. One would think that Cox would not be a favorite of the little guys…but Cox’s subscriber numbers surely dwarf those of any other member. And those subscriber numbers are an immense help in negotiating good wholesale contracts that benefit its smaller members. If Cox has threatened to withdraw it could be enough to seriously scare the coop. And that would, not incidentally, mean that Cox is seriously afraid of LUS’ competition and even more afraid of what the success of Lafayette could mean for other communities contemplating doing for themselves what the big boys refuse to do for them.

The article makes it clear that Cox is indeed the suspected villain in Lafayette’s version of this story:

City-Parish Attorney Pat Ottinger said in a memo dated May 21 to City-Parish Council members that the cable cooperative’s denial of membership to Lafayette seems to be “a conscious effort to discriminate against municipalities” that are trying to launch their own cable, phone and Internet services.

Ottinger also notes in the memo that Cox Communications, a competitor of LUS Fiber in Lafayette, is among the cooperative’s largest members and has a seat on the board of directors….

Ottinger, in his memo to Lafayette council members on the issue, said the cooperative might be reconsidering its denial of membership for the other two cities “but has continued to refuse to allow Lafayette to become a member.

“It is my understanding that the only distinguishing factor is that Cox is not the competing cable provider in those areas,” Ottinger wrote.

Burgess offers Cox a chance to reply which they decline citing pending litigation but nonetheless piously declare:

…Cox has always embraced competition in Lafayette.

Now that, at least, we know is a bald-faced lie. Cox did just about everything imaginable to keep LUS from starting a competing service—from writing laws to funding an ugly push poll. Cox is not your friend in the digital age if you hale from Lafayette.

WBS: “Fabulous Lafayette”

Francois Benoit, who works out of France and runs the blog Fibervolution blog, has posted a review of Fiber Fete—and Lafayette. Benoit was caught in the initial ash cloud shut-down of European airspace and missed the first half of the event. But he has caught the gist of the story told by that event. Perhaps because of that he’s created a very careful overview of the conference.

Some tidbits from the post:

Lafayette has understood and internalised the fact that they will only reap the benefits from the infrastructure they are building if they make it happen. Field of Dreams is just a movie…

More widely, ubiquitous very high speed connectivity is a game changer for business and society. David Weinberger did a very good speech exploring the implications of ubiquitous fiber on economy and society. The hurdles are not in deploying the infrastructure, they are in changing the ecosystem that currently relies on sub-par connectivity for its interactions…

All in all, this was a great event. It was also unique in that a lot of room was left for discussions, both one on one and collectively….I’m looking forward to Fiberfete 2011. Hopefully by then Lafayette will have some early examples of “cool and wonderful things to do with fiber”, other cities will have learned that Google didn’t pick them and look at Lafayette on what to do…

I found Benoit’s own talk—on the lessons to be learned from the success of Apple’s app store—very intriguing.

There’s lots to look forward to.

(What’s Being Said Dept.)

“Lafayette and a Level Playing Field”

Chris Mitchell over at MuniNetworks.org has an excellent post up on Terry Huval’s recent testimony before Senator Landrieu’s Small Business Committee. I’ve been swearing I was going to get to an extensive post of my own on this subject for a week but Chris has done a fine job with it. Mitchell is one of Lafayette’s national partisans, a major force driving muni networks nationally, and recently attended Fiber Fete here. He knows our project and knows the national scene. Go to the post, read it, and return here for some local color…

You did go, didn’t you?

Ok, since you’ve already seen Mitchell’s take on the trials and travails of “probably the best citywide network in the US” and the national implications of the battle I’d like to focus on some points that will be especially salient to a local audience…

First, notice that the battle isn’t over. Huval reveals that Cox continues to try and undermine the local community:

“Cox representatives were recently active in attempting to undermine the future of the city’s century-old electric, water and sewer utility system. During a recent rate increase effort for these traditional utilities, Cox representatives were lobbying Lafayette council members to oppose the rate increase in order to adversely affect the utility system’s future viability. All of these examples indicate an underlying strategy to hurt the city simply because the city voters dared to choose to authorize the building of their own telecommunications system.”

During the referendum battle a new saying grew up on several local blogs including this one: “Never trust a word they say.” I hope the current crop of local politicians has learned that lesson. These guys are NOT “your friend in the digital age.”

Both written and video versions of the Huval’s testimony before the hearing “Connecting Main Street to the World: Federal Efforts to Expand Small Business Internet Access” are available. Though I appear to be assigning a lot of work today, both are essential reading/viewing for those that might want to understand Lafayette’s role in the current national debate over broadband as well as the history of the project.

The written version, the “for the record” version is, as is common, much more extensive than the three minutes that the LUS director was allowed before the panel. What is revealed there is a blow-by-blow history of the conflict with the incumbents. The dust has settled enough now that it can be read with a fresh sense of outrage—and a definite sense of pride for city’s accomplishment.

Two points found in the written testimony are worth underlining here: Twice Huval takes the opportunity to say that internet portion is the main emphasis of LUS Fiber and makes clear that Lafayette anticipates a single converged service: True Broadband which Huval defines as symmetrical service of 100 Mbps and above. That shows a clarity of understanding that few in the private sector can afford. Lafayette understands that in the end what the public wants and needs from our data utility is carriage; separate services will be allowed to die when their time passes.The second notable point takes Washington to task: “It is unfortunate that the national policies of the past have failed to even approach a world-class broadband system.” It is perfectly possible to build exemplary world-class networks in the United States. If it can be done in Lafayette it can be done anywhere in the US and the community’s accomplishment is, in this context, an indictment of the political will of the rest of the country.

The video record, as short as it is, is also entertaining. There are three parts worth reviewing for current purposes: 1) The three minute testimony, 2) Huval’s response to Landrieu’s question regarding the role of municipalities, and 3) The “free shot” closing remarks Landrieu granted Huval and the other participants.

The makeup of the panel on which the LUS director appeared was interesting in itself…two of the participants were a former Senator (who got to speak long) and a former Representative (who was cut off). They now “represent” the broadcast and wireless industries respectively. Also included were a representative of CenturyLink, the Monroe company which recently purchased Qwest and a representative of wireless broadband ISPs.

Huval is called at minute 117 of the video and opens his testimony by briefly addressing his salutation to Landrieu in French—to considerable amusement. His comments on the path he hopes the federal government will take are worth repeating:

“We believe that the simple measure of trying to get complete shackles off local governments to provide these services will have the greatest impact on getting broadband out…We have a solution to this problem.”

The senator responds by exhibiting her pride in project and making the point that Huval was testifying at her request in order to provide a place at the table for municipal services.

At minute 136 Huval is given a chance to extend his testimony to the point of allowing local governments to play a role in providing competition.

In his closing remarks near the end of the session the director explains the value of symmetrical upload speeds as a particular advantage for small businesses who can get into the game affordably if a local provider will offer these services affordably, citing Lafayette’s surprising commercial prices and terms. A company like Golfballs.com has “a huge entrepreneurial opportunity.” He closes, though, by returning to the attack on the incumbents, saying that those who would “play games with the system…that shouldn’t count anymore.”

Lagniappe:
At minute 140 or so the guy from CenturyLink talks about Qwest’s long-haul and the ability the new Centurly Link now has to support small places with middle mile backhaul, data hosting, and web-based services. The representative of the company made it clear that his corporation was willing to deal aggressively to offer local ISPs and video providers backhaul on Qwest’s national fiber backbone. To show his bona fides he revealed that the new company was planning to use CenturyLink’s policy of setting local bandwidth managers in place to try and replicate the success the company has had reselling fiber-based capacity. Because that backbone is so widespread—it goes to many places where CenturyLink does not have a competitive business—having local, aggressive managers on the ground in small localities could be a major factor in giving local communities and small ISPs access to affordable backbone. And, yes, CenturyLink now has major backhaul through Lafayette…both over the basin toward Baton Rouge and south to New Orleans along the railroad tracks. Maybe Huval caught Mr. Gerke for a chat after the session?

City, LUS Fiber marketing to unincorporated areas

Hmmn. According to the Independent blog Lafayette Consolidated Government (LCG) is undertaking a marketing campaign on behalf of the City of Lafayette and LUS Fiber.

That is all sorts of interesting… The implication seems to be that marketing campaign will be used to promote annexations by the city by using LUS Fiber as the focal point for a campaign that touts the advantages of joining Lafayette rather than one of the smaller cities in the parish. That makes sense…and it doesn’t.

It makes sense to regard LUS Fiber as the easiest, most immediate, and most obvious municipal service that Lafayette can offer…and that the smaller cities cannot. LUS water, the last generation’s trump card, has long since been distributed out into the parish via long-term contracts. LUS’ electrical division would almost certainly be an improvement over Entergy…but only in degree. Better fire ratings, property values, and other city services are nice but not the sort of “point of purchase” incentive that move most buyers. The offer of a competing, local, technically superior, cheaper fiber to the home service on the other hand is unique to Lafayette. So promoting LUS Fiber to envious parish residents makes sense.

What makes less sense is the idea that LCG is going to enter into a contract to promote Lafayette against the interests of the other cities. Admittedly the consolidated in LCG only stands for Lafayette and the unincorporated areas since the smaller cities chose not to follow Lafayette into full consolidation, but the residents of the cities are also citizens of LCG in addition to their towns and I’d imagine that they and their representatives will look askance at this new LCG policy. The tension here underlines the question of sovereignty for Lafayette: If LCG cannot act on behalf of Lafayette’s interests then who can?

It’s also not clear that this plan is in the long-term or even middle range interest of LUS Fiber. Contrary to Broussard Mayor Langlinais’ petulant remark recently that LUS “needs” the expansion, LUS is most definitely not particularly best served by expansion into the least densely populated areas of the parish. LUS is doing just fine in the city proper, its take rate, and the average billing per customer are both higher than they need to make the current plan viable. The narrow passage that LUS Fiber is currently navigating is that of the initial years when large upfront investments in plant and in the initial cost of bringing each customer online for the first time vie with the costs of repaying the bond schedule. The first several years are crucial. A misstep now could unfairly trigger elements of the so-called fair competition act and lead to a forced sale of a perfectly viable service. Oddly it is perfectly possible for there to be too early and too sudden a success…putting costs that would be easily managed if taken over the years into the dangerous first years of operation and producing a paper “loss” that the incumbents would use to force closure.

Given LUS Fiber’s current success this may not be an issue but nonetheless the safest way to add new customers would be by taking in the members of the more densely settled inner portions of the smaller cities.

In the long run it would be best if all the citizens of the parish could join LUS Fiber’s network but it’s pretty clear that the annexation issues will need to be settled before that process can begin.

“Bridging a digital divide”

Richard Burgess has a piece up in today’s Advocate that offers an excellent overview of Lafayette’s digital divide efforts. I’ll review the highlights and offer some comment here but you’d be well-served to go to the source.

The story lists the most active digital divide efforts in the city, including efforts associated with the Heritage School program & KJCB, the Housing Authority of Lafayette, Vision Community Services lab, and the Lafayette Library.

Je’Nelle Chargois and the Heritage school:

A program that Chargois coordinates called the Heritage School of the Arts and Technology began providing computers and training last year to students at J.W. Faulk Elementary.

The students are selected by school staff based on need and given donated computers on condition they and their parents attend computer literacy workshops.

That program is the primary recipient of one of the two digital divide grants from recent stimulus funds applied for by LUS and LCG. If won the grant would provide 3.9 million for the expansion of the program, training, and free internet for the pupils’ households.

Walter Guillory and the Housing Authority:

Chargois is already working with the Housing Authority of Lafayette to provide computers for three planned computer labs at public housing developments.

Housing Authority Director Walter Guillory said the first lab is planned for the Simcoe Street Development in a retrofitted apartment that will be filled with 20 computers with access to LUS Fiber.

He said the lab, which is set to open as soon as it can be stocked with donated computers, will be staffed and also available to residents in the surrounding community outside of the development.

This program is actually a recreation of a lab setup first developed during the runup to the fiber referendum in 05. At that time and for a couple of years afterward it was staffed by Americorp volunteers. When that organization developed other programs and withdrew support the centers languished and were closed. Staffing and maintenance will be an ongoing issue. The provision of reliable human support is by far the biggest barrier to many programs.

Sessil Trepagnier and the Vision Community Services lab:

Trepagnier said the lab is open on weekday afternoons and offers computer access and training on how to use and build computers.

“We focus on technology, but we also teach them leadership skills,” he said.

Trepagnier’s center is a one-man labor of love. That’s both its strength and the model’s weakness. Lafayette, as blessed as it has been with people willing to sacrifice to see the right thing happen, cannot count on there being enough such people to fill the need—especially when they essentially labor alone. Folks like Sessile need a strong support system.

Sona Dombourian and the Lafayette Parish Library:

The library system has about 160 computers at its 10 locations in Lafayette Parish, and computer use has more than doubled in the past five years, with the number of computer sessions rising to 411,000 in the fiscal year that ended in October 2009, said library director Sona Dombourian.

The library system also offers wireless Internet access for patrons who bring laptops.

The library system is doubtless the largest single digital divide resource in the parish. In addition to computers and free net access it offers classes in a wide range of programs and activities, serving all age groups. I’ve set in on two discussions with library staff recently and came away impressed with both the personnel and the activities they sponsor. The library has the advantage of being a stand-alone institution with a dedicated tax stream to support activities its leadership understand are in its area of responsibility. Lafayette is lucky to have professional librarians and support staff that see the need and go the extra mile. The second stimulus grant that Lafayette has applied for will be spearheaded by the library but funds will also support centers at the Housing Authority and senior centers.

There are, of course, other good projects in town ranging from the Boys and Girls club to senior centers.

But for all of these the issue is, as I tried to say the phrases the article quotes, that more and more the barrier to full participation in the web is being reduced to the irreducible human and cultural factors.

LUS Fiber rates are low and the price of computers keeps falling, meaning that financial constraints, though they exist, will become less of an issue in years to come, said St. Julien, who also runs www.lafayetteprofiber.com, a website that tracks issues related to LUS Fiber.

“I think the initial thought was that hardware was going to be a big barrier. Now that the day is here, that is not a big issue,” he said. “We have reduced everything, except the human part, to a minimum.”

My first computer cost more than my first car. Less than a decade ago I spent money on a second telephone line here in Lafayette in order to get somewhat affordable always-on access to the internet at my North Lafayette home. I paid a small fortune to maintain a stable of professional-level software. I now do a fair amount of my net work on my carrier-subsidized “palm top” computer and get 50 megs of symmetrical bandwidth to drive my in-house wireless network of computers and devices. Many of these are products I would not have anticipated at prices I would not have believed. Excellent open source on net-based software can be had for free. Times have indeed changed. The costly computer has become a commodity, a present from a vigorous marketplace. The network connection is world class and amazingly inexpensive, a present of a vigorous community. Software can be had for free, a present of ad support and the open software movement. The barriers that once appeared to be insurmountable mountains have become, if not molehills, at least readily surmountable hills that the motivated can be helped to climb. The final barriers are people—people to support computer and center maintenance; people to man help lines and support the inexpensive or free open source software; people to educate. People to help.

That’s the real challenge before the Lafayette community: finding a way to rally people who care in support of the effort to bring the entire community into the digital era on an equal footing. I’m convinced the ingredients are there: the talent and the desire to help is clearly there. What is lacking is, generally, a mechanism that will enable folks to use their talents and realize their desires to help.

Ideas? Lafayette Commons (which provides nonprofits with support for its education edition of Google Apps) could use folks in support—and would be willing to sponsor a mechanism for the support of a broader set of open source software if the human resources could be found. A clearing house for setting up people with powerful free software? A once-a-month computer rebuilding “fest” where the techisly inclined could test and install software on recycled computers? We need the social mechanisms to make this happen.

I’d be happy to hear of any mechanisms or projects that you think would help, in the comments or offline.