Why no Google Fiber for Baton Rouge? (Updated)

The folks in Baton Rouge are probably asking themselves why they didn’t get Google’s gigabit fiber network. After all for a while the Facebook page “Bring Google Fiber to Baton Rouge” had more fans than any in the country and there seemed a pretty large groundswell of support. There was a heavily rewritten AP article in the Advocate that interviewed a BR Chamber officer and recounted the history of local public involvement. (Unfortunately not online check p. B-6 of 3/31/11 paper.) It all seemed so hopeful. The Chamber held out hope that Baton Rouge might get in on the second round.

I don’t think so. At least not until we put our own house in order.

Here’s at least one reason that Google avoided Louisiana:

See Kansas? It’s Green. Texas and Arkansas are Red. Louisiana is a sickly Orange. Google is only going to green states. This map has nothing to do with solar energy or recycling. The green denotes a place where there are no state-wide legal barriers to a community building and owning its own fiber-optic network. Red states absolutely forbid it. Louisiana is among those who are hostile but do not completely outlaw the idea. (Witness Lafayette’s ongoing battle.)

Google wants to strike out and do something truly different. They are frank about thinking the Cox’s and AT&T’s of this nation haven’t done a good job and that local communities can do better and should be helped to do so. Google has no reason in the world to go to a state that tries to make the sort of community involvement they count on illegal.

They aren’t coming to Louisiana until the “(un)fair competition act” is abolished. If Baton Rouge (or New Orleans, or Shreveport or Bossier, or any of the other Louisiana cities that applied) want to have a shot at Google’s second round the first thing they have to do is get their own house in order.

Repeal Louisiana’s (un)fair competition act…

(Check out the great map at muninetworks.com from which I grabbed the above illustration. It chock full of valuable, if depressing, information.)

Update 4/1/11: Stacy Higginbotham, tech journalist extraordinaire over at GigaOm, covers the Texas version of this story. Apparently Austin had a very credible, widely supported effort to get their city picked. The local organizer thinks:

“Austin caught their eye for all the right reasons, and we had support at the highest levels with the involvement of the mayor and the city manager, but given the Texas limitations on municipalities getting involved in network, there was only so far we could go,” Rosenthal said. “So I look at the Texas Legislature, because they really put us in a box with regard to Google, and every response the city gave had to be measured within that box.”

Yup, I expect he’s exactly right. Texas forbids muni networks. Google is doing this to encourage muni networks. The are NOT going to pick a city in a state with lousy laws that forbid what they are trying to get other municipalities to do. That’s only common sense.

Update 4/4/11: Take a look at what the paper in Kansas City, Kansas thinks were the reasons that its city made the cut. The story, understandably, tends to focus on drama and secrecy but there are some very interesting nuggets in there about the underlying factors that might have favored KCK once the first cuts were made.

Update 4/4/11, 8:15 PM: As part of the ongoing discussion in the comments I reviewed the Louisiana law constraining muni networks. There I found what I thought I remembered: The law explicitly includes the sort of public-private partnership that Google is undertaking in Kansas City. So anyone who is murmuring that Google could do a project similar to the KCK one in Louisiana simply has not read the law. You can bet that Google has. See the element of the law which defines a public-private partnership as one that must adhere to all aspects of the law at RS 45:844.47 B(3): “Through a partnership or joint venture.” If Baton Rouge wants Google to consider them in the second round they’ll want to repeal this law first.

LUS Fiber as Background…

Lafayette’s community-owned fiber network is well on its way to becoming a background factor in the city’s self-image. At one point most public mention of LUS Fiber was a—contentious—foreground issue. The story was about the fiber network. That’s changed. And that’s good.

These days stories tend to mention LUS Fiber as an assumed “good thing” and are focused on the immediate foreground issue. The next step is for our massive connectivity to be simply assumed without mention—after all nobody talks about the water utility when discussing gardening. We’ve not quite reached that point. For now at least we are still aware that we’ve got something special.

A couple of recent experiences reflect that new state: In a bragging speech, our “state of the city-parish address,” LUS Fiber rates a nice mention—but only a mention. On a website touting a new “traditional urban village” development one of the advantages of the new subdivision is Lafayette’s fiber to the home network. In a blog post focusing on education and technology at a Catholic high school making use of the 100 meg intranet is merely one of several bullet points on the to-do list.

It is a sign of maturity I suppose. LUS Fiber is now part of the community.

That’s what was supposed to happen.

Double take…Cox & French TV5

Just before Christmas I did a sharp double-take when thumbing through the Advertiser with our morning coffee—Cox was running expensive full-page, color ads promoting TV5 Monde, the french channel. While I didn’t spit out any coffee I was taken aback. Cox, you see, has never before pretended to be a friend of Lousiana’s French speakers and this kind of promotion is a particularly galling extension of the corporation’s continued attempts to ingratiate itself with the Lafayette community after taking a brutal hit to its public relations image during the fiber referendum battle.

One of the mistakes Cox made during the fiber fight was a set of channel changes that included moving the French channel from basic cable into the stratosphere of channel 226, a location that required both a set top box rental and a the purchase of a special, costly, upper tier add-on package. In a city where the last census showed that 13% of the people spoke french in the home that seemed, and seems, pretty outrageous. Many of those speakers will be in our poorer communities and will be disproportionally older and on fixed incomes. If you speak french as a first language, or are simply determined to keep Louisiana’s francophone heritage active this change was a huge blow…making mass media access to french content more obscure and more expensive. At that time—soon after the storms—Cox also moved the weather channel off basic cable and up into a more expensive channel package. These, and changes to the on-screen channel guide were all intended to drive users off the cheaper, bandwidth intensive lower channels and up onto the more lucrative digital channels that required a rental set top box.

Needless to say people weren’t happy with these changes which pretty blatantly were the sorts of decisions made by corporate honchos in Atlanta who were unappreciative of the local cultures or the facts of life for those living in the Gulf’s vulnerable coastal cities. (See examples of LPF coverage @ A, B, C.) After complaints across south Louisiana (in New Orleans, Baton Rouge, and Lafayette) Cox moved the weather channel back onto a cheaper tier. But TV5 has been permanently moved to an expensive upper-tier ghetto where it is paired with, of all things, a set of specialty sports sites.

The contrast between LUS and Cox on this issue is stark. If you want TV5’s French language programming and have access to LUS Fiber then your best choice is LUS…it’s on a basic tier that doesn’t require the rental of a set top box or a more expensive digital tier. On Cox you’ll need to rent a digital box to get service and opt for a specialized, mostly sports, package.

The Cheapest Packages with TV5 from LUS Fiber and Cox:

—LUS Fiber: on Expanded Basic @ channel 71: $46.95, no set top box: $0, Total: $46.95
—Cox: on Advanced TV Preferred @ channel 266: $64.98, required set top box: $5.25, Total: $70.23

LUS advantage: $23.28 a month or $279.38 a year…

And that’s before you add on other one-time charges. Suppose that, in reaction to Cox’s full page ads in regional newspapers, your old Tante Sue is so delighted at the prospect of French TV that she decides to take the plunge and get some of that cable television. She’d be hit with a connection fee of $53.95 (and possibly various and sundry other cabling fees to get service where her TV is). Even if Tante already has Cox and only has to upgrade to digital to get that channel back she’ll still pay $53.95 to only upgrade to digital! Cox, your ersatz “friend in the digital age” doesn’t particularly want to come visiting…and charges accordingly. And you’ve got that silly extra set of sports channels to click through. So if you want to watch some of your TV in French you’ll end up paying $333.31 more to buy it from Cox than you would if purchased it from LUS during your first year.

Now maybe Tante Sue already has that fancy digital TV stuff and only has to switch to the package that contains it…but she’ll have to give up one of those other “packages” to switch into the “Sports and Information Pak.” So she sits down and has to decide to give up the Turner’s old movie channel or the Cooking channel, or…some other favorite of hers to get a channel in French. Or, of course she could upgrade to higher priced service to get the privilege of adding TV5. No doubt helpful sales agents will suggest that…and that will cost her an additional $6.00 dollars a month.

By contrast LUS Fiber doesn’t do all that contract, install fee nonsense. It’s simple—French TV is in a basic tier…you get it for no extra cost, no monthly box fee, and don’t have to give up other channels to get it. Pay for “expanded basic” @ $46.95 a month and add nothing on. End of story.

So Why?
Cox’s French language offer is simply not a credible competitor with LUS’. Which brings up the issue of why Cox is bothering to dump substantial advertising dollars into full page color advertising. Well, two reasons. 1) PR, “public relations.” It looks good to be promoting the French language, particularly in Lafayette, the largest city in the French speaking areas of Louisiana. It doesn’t hurt that such ads promote a sense that Cox “cares” about local people and local issues. Cox has been doing its best to counter the lousy PR it gave itself during the fiber fight and promoting French is an apple and babies sort of issue: who could oppose it? 2) through most of the area of Cox’s “greater Louisiana” district, which ranges from Gonzales through Baton Rouge and over to Lafayette there is a distinct, well-established French subculture. Somebody (finally) figured that out. There are certainly many “Tante Sue’s” out there and it wouldn’t take many of them being pushed to buy cable outside Lafayette or upgrade to digital or higher tiers to substantially increase Cox’s profit. And that, I imagine, is what clinched the argument with the higher-ups in Atlanta when the promotion was pitched.

The moral of this story is that there is a difference between supporting local communities and exploiting them…LUS Fiber is providing native language support to the traditional local communities with minimal barriers. Cox is providing French to burnish its local reputation and make some bucks. Motivation matters and Lafayette’s French speakers should be pleased to have a community-owned alternative to the national corporation that offers much better prices and more widely available placement for the French channel.

Lagniappe: Cox has tried (and failed) before to make cozy with Lafayette by pretending a fellowship with the french strand of our heritage; that much cruder era was exemplified by the infamous TJCrawdad. and the “down-home” ad that used an actor delivering the generic “hick” Arkansas accent and a Cox delivery van with Texas plates to tout their local bona fides.

“Let LUS join cable cooperative”

The Advertiser opines that the National Cable Television Cooperative (and by implication Cox cable) should let LUS join the coop. They’re right. Some of the highlights from the editorial:

LUS is seeking membership in the cooperative, a body created by the federal government to leverage the purchasing power of small cable TV companies.

…the lawsuit was just another punch thrown in the fight between LUS and its private competitors. The court was right to reject the lawsuit and to allow LUS’ attempt to join the cooperative to proceed.

…Denying LUS membership in the cooperative is fundamentally unfair.

…Originally, the membership applications of LUS and city utilities in Wilson, N.C., and Chattanooga, Tenn., were ignored. Wilson and Chattanooga eventually were granted membership, but not LUS.The private competitors of the other two systems are not members of the cooperative. Cox is. There’s nothing subtle about that.

Indeed, there is nothing subtle about what is going on here. Cox is playing bully-boy with its more than 6 million subscribers (vs. Lafayette’s 52,000 Total households) to keep Lafayette out of a buying coop that is chartered precisely to allow small guys like LUS to compete with the likes of Cox. —Leading to the conclusion that is also the title of the editorial:

Let LUS join cable cooperative.

Market Share – The Independent Weekly

20101124-cover-0101The Independent has published its second and final installment in the series on “LUS Fiber — where it stands and where it’s headed.” This one focuses on the immediate road ahead. The issues are ones that would be of interest to an partisan of Lafayette: marketing, market share, financing, the competitive landscape LUS Fiber has created, and innovation.

This series marks the beginning of the inevitable “friendly critique” of LUS Fiber. Supporters—not detractors—are beginning to voice disagreement with LUS over specific points while continuing to be broadly supportive. That’s the beginning of a more healthy relationship between LUS Fiber and its public. The inclination of supporters, and that includes a large majority of the citizenry, has been to close ranks with LUS against the (accurately) perceived hostility of the incumbent providers to our venture. That supportive criticisms are now being made of the still unlaunched advertising claims, and the sort of innovation that LUS has is seen to have encouraged is probably a good thing and indicates that people are seeing LUS Fiber as an accepted, “normal,” part of the landscape. Now I’m sure LUS is not feeling nearly so secure just yet and would prefer a longer stretch of reticence from the public but it should take some comfort in the implied confidence such quarrelsome talk represents.

Apparently some in the marketing community want a bang-up, high tech projection of LUS Fiber’s advanced network and object to what they see as the stodgy utility orientation of the ads they’ve seen. Just to stoke the fires of community discussion: I disagree with both sides either/or… I’d like to see ads that first, emphasize the home-town, local benefits that owning our own fiber accrues and that includes the utility orientation that LUS projects, then, second, I’d like to see the evokation of civic pride in what we’ve got and that in turn includes bragging on the unique aspects of our network. I can see why we can’t have, and benefit, from both. The point though is until recently all I heard was how badly people wanted to see some, any marketing strategy enacted. That the situation has matured to the point that we can now disagree over the style of a marketing strategy is a happy development.

Similarly others in the space between tech and business want to see LUS pursuing Google and the likes as it opens the public network to innovation. Shoot, so would I and have long advocated that the city pursue a Google “internet in a box” located on network. But I am located in the space between tech and community and would see the real potential for innovation occurring around decisions to give us all 100 megs of intranet bandwidth (check!) and opening the set top box to internet access…the really innovative things, in my judgment, will involve pulling in greater levels of participation at higher levels of usage. But again, until recently folks were just looking for “innovation” — arguing about what sort of innovation we should emphasize is a good sort of disagreement…and one that LUS should be proud (if not always comfortable!) to have inspired.

There’s more in the article worth looking at and discussing but none of the financial stuff beside upping the take rate number to 30% strikes me as news.

The real news is that we are beginning to talk about our network openly enough to disagree. And that’s a good thing. A very good thing. Just not a comfortable one.

LUS wins first round with NCTC re FCC (But what about the FTC?) —Updated

LUS has successfully argued that the National Cable Television Cooperative (NCTC) was wrong to attempt to use the Federal Courts in Kansas to prevent LUS Fiber/LCG from complaining to the FCC (or the FTC or, well, anybody they want to) about the NCTC blocking their bid for membership. The case has been thrown out of court with the Federal Court in Kansas stating that it had no jurisdiction and, further, that the planitiff the NCTC was really trying to use the courts as an inappropriate battleground or as way to try and establish a decision before a case is actually brought—neither of which is legitimate:

The timing indicates that plaintiff is attempting to use this declaratory judgment action for purposes of procedural fencing or to provide an arena for a race to res judicata.

Backstory:
Folks who’ve followed the long fiber fight in Lafayette (currently in its seventh year) will recognize this as the latest iteration of the incumbents using the court system to delay LUS Fiber from moving forward. The consistent result for any case pursued to final appeal has been for the final decision to find in LUS’ favor. This is simply the latest instance in which the real result, and likely the only really intended result was to cause delay and expense for the people of the city.

The immediate backstory for this instance is that LUS and two other municipal fiber to the home providers had been denied entry to the NCTC which provides their coalition of small cable firms with prices for content that are competitive with those the large multi-system cable companies are able to get. LUS had to wait during a two year moratorium on new members was put in place during 06 and 07; the moratorium was extended multiple times. LUS Fiber then immediately applied for membership when the NCTC lifted the moratorium on new members. But the NCTC quickly inducted two very unusual new members completely at odds with their previous membership: large cable corporatons Charter and, yes, Cox Communications. LUS and other muni providers were put on indefinite hold—their applications simply not responded to—far in excess of the organizations own deadlines for acting on applications. LUS and the other muni providers finally signaled their intent to ask the FCC for relief on the grounds that this exclusion from the cheaper prices available through the “small provider” coop amounted to anti-competitive behavior. The NCTC quickly offered to admit the other two cities on the condition that they drop their complaint. Neither city faced competition from either Cox or Charter who now had members on the board of directors. They agreed. LUS, who does compete with the largest (brand new) member of the NCTC was not offered membership and the basis for refusal to act on LUS’ application has yet to be explained. Except, of course, by the Lafayette utility which unambiguously points to Cox. No denial or confirmation has been offered by the NCTC.

(If that recounting was too condensed or abridged please take a look at the account on “Stop the Cap” What makes their take even more interesting is the fact that the author has a prior, at one time supportive, relationship with the NCTC. His judgment is damning.)

The Case at Hand:
The NCTC asked the court for a “declaratory judgment” that would have precluded LUS/LCG from seeking any of the remedies that its FCC filing said were possible. Those ranged from asking the FCC for redress, to asking the FTC to withdraw its letter stating that the NCTC was not in restraint of trade, to requesting congressional review, to seeking redress under Louisiana law. The court walked through each claim by the NCTC and essentially found that the plaintiffs, the NCTC, asked the court to assert an authority it did not have—and to effectively reach a decision in advance of having a case actually presented.

Consequences, FCC:
So the complaint to the FCC will not be blocked. When Lafayette will hear back on that is anybody’s guess but the filings with the Kansas court claimed that they thought that the chance of having to go beyond the FCC to receive satisfaction were small. That sounds like confidence to me. That confidence is reinforced when I realize what a potential “nuclear option” the NCTC is risking if LUS and Lafayette were to go to their second option…

With LUS’ complaint cleared to go forward what the NCTC has to decide is what they’d risk by allowing their pro-Cox position to be struck down by the FCC. Mainly it would seem to be that they’d lose their much of their current ability to arbitrarily deny an applicant membership. Their defense would have to put up some sort of reason to deny—something which they haven’t deigned to do to date. Each potential defense, and were Lafayette’s response successful, endangers an excuse which they might want to use at a future date. (For example: it would be risky to try and claim that LUS is using a different, IP-based technology from the rest of their clientle both because that isn’t entirely true—IP is already embedded in much cable tech and they’ve admitted other muni providers using identical tech—but more worryingly because the loss of this excuse would endanger their ongoing policy of refusing to admit small, local telephone companies that are beginning to offer video.) Letting the FCC reach a conclusion on this matter is an open-ended risk for the NCTC; they can’t know how far the new FCC under Genachowski will go. Openly stating that they are excluding competitors of current members would be even more risky, especially if they are successful—where the Federal Communications Commission might let such blatantly anticompetitive activity slide if it thought it served some higher purpose related to its telecom-related mandate it is unlikely that the FTC would be happy to hear that the NCTC had explicitly changed its raison d’être to one that is intends to exclude competitors in order to gain an advantage for its members. The central purpose of the Federal Trade Commission is to prevent collusion in restraint of trade..more on this below.

I won’t be surprised if we soon hear that the NCTC has decided to let LUS join provided they drop their FCC complaint.

…Especially if they consider that even a refusal to act in Lafayette’s favor on the part of the FCC might have truly dire results if the city has to go to its second option.

Potential Consequences, FTC:
The second avenue of redress mentioned by the city’s lawyers was asking the Federal Trade Commission to withdraw its “business letter.” That pretty much mystified me until I dug up the latest version of the FTC’s letter. As it turns out what the letter does is to certify that the FTC does not think that the NCTC operating practices constitute an illegal restraint of trade that would lead them to start enforcement proceedings. But reading the letter makes it clear that its all pretty tentative and as I read it I started to wonder if the new size and constitution of the NCTC after it has bulked up and changed its nature by bringing in some of the nations largest cable companies (it now constitutes the largest group of customers in the nation) would change the FTC’s view. And then I hit the final substantive paragraph, reproduced in full with my emphasis:

For these reasons, the Department has no current intention to challenge the NCTC’s proposed procedures for jointly negotiating national cable programming contracts for its active members. This letter expresses the Department’s current enforcement intentions, and is predicated on the accuracy of the information and assertions that you have presented to us. If the conditions you have presented are substantially changed—if, for example, a major MSO or a DBS provider were to join NCTC or there were other significant changes to NCTC’s active membership—the conclusions we have drawn would no longer necessarily apply. In accordance with its normal practice, the Department reserves the right to bring an enforcement action in the future if the actual activities of NCTC or its members prove to be anticompetitive in any purpose or effect in any market.

That has GOT to send a chill through the hearts of the bureaucrats that head up the NCTC. And may well explain the panicky legal response to LUS’ simple notification of intent to take their complaint to the FCC that the court has here so easily dismissed. Perhaps the FTC, not the FCC, is the entity they really fear. The FCC would merely make them play fair. The FTC could destroy them. That they’ve exposed their organization to such a danger should frighten the NCTC membership. And should thoroughly frighten its membership. If LUS/Lafayette were to pursue this it seems very likely that the FTC would have to seriously reconsider its reassurances. After all the NCTC has admitted not one but two major MSOs (mulitple system operators)—Cox and Charter. And it is acting rather transparently in the interests of one of them. That seems like a huge risk for the NCTC take. Playing a game of brinksmanship with LUS could easily lead to the dissolution of the coop. Something which wouldn’t bother Cox or Charter; they’ve always had the heft to go it alone. In fact they’d find it a lot easier to compete with any of the little guys who now take advantage of the better prices the coop offers. It’s win-win for Cox and Charter—either they gain a price advantage over little LUS that competes with Cox or they gain a price advantage over all the little guys when the coop fails to meet FTC standards. It’s hard to avoid concluding that the little guys that the coop was once run to benefit have been snookered.

Conclusion:
At the end of the day the real question remains unchanged; the lawsuit did not serve any real purpose but delay and to drain the resources of the defendant:

With respect to plaintiff’s malicious prosecution claims, a declaratory judgment would not clarify the legal relationship between the parties with respect to the question at issue: whether plaintiff broke the law when it denied defendant’s membership application.

Does LUS/LCG and Lafayette have grounds for claiming that this was frivolous lawsuit? I have no idea. But it certainly has proved, in fact, if not in intent, meaningless.

(Court order link via the inestimable Baller-Herbst List…)

Lagniappe:
The Lafayette legal team has released a press release that outlines their take on the victory in Kansas.

Update:
The Advertiser, the Advocate, and the Independent have all weighed in with responses to the LCG press release.

Lafayette, the NCTC, and National Policy

Both the Advocate and the Advertiser have posted stories focusing on the latest move in the Cox/NCTC versus LUS/LCG contest being gamed out in the courts. In this turn Lafayette is has filed suit to dismiss a lawsuit filed in in Kansas by the National Cable Television Cooperative (NCTC). That lawsuit was filed in an attempt to block LUS from pursuing a complaint with the FCC.

So…this is a suit to block a suit which hopes to block a filing at the FCC…there’s a legal logic in there somewhere I am sure. Or in the words of the Advocate:

Attorneys for Lafayette argued in court filings that the cooperative’s lawsuit is an attempt “to drag a Louisiana municipal public utility into court on the plaintiff’s home turf in an effort to avoid being held accountable for its conduct before the Federal Communications Commission.”

The Advertiser:

The FCC complaint by LUS Fiber argued that NCTCS engaged “in unfair, deceptive and anticompetitive conduct that has the purpose of effect of preventing LUS from becoming a member of NCTC and thereby obtaining the huge quantity discounts and other that NCTC negotiates for its members…” “We have stated in our pleadings filed today that the court should dismiss NCTC’s complaint in deference to the jurisdiction of the Federal Communications Commission, or alternatively suspend any further proceedings until the FCC has decided the case initiated by the Lafayette complaint,” city-parish attorney Pat Ottinger said.

The story closes, appropriately, with the note:

NCTC’s largest member is Cox Communications, LUS Fiber’s primary competition.

That Cox is engaging in anti-competitive behavior through its influence at the NCTC is the core of Lafayette’s public relations case; and, given Cox’s behavior here in Lafayette, it seems entirely likely. The fact that the other two cities that had initially joined Lafayette in its complaint, but were after filing suit admitted to the membership process, did not have the NCTC’s largest member as competition is damning. That these cities’ corporate competitors do not belong to the NCTC tends to clinch the argument.

In fact, that those other cities had competition that does not belong to the NCTC is a strong argument that more is at stake nationally than simply the interest of a mid-size, aggressive city somewhere along Louisiana’s cost and its huge corporate competitor. As I’ve pointed out previously, other members of the NCTC have engaged in the sort of anti-competitive blocking that Cox has used in Louisiana.

The NCTC used to be a mechanism for small, locally-owned cable networks and municipalities to get relatively fair programming prices for their customers. Over the years the market has changed and single-system mom and pop operations have all but disappeared as large and medium size “mulitple system operators” (MSOs) cable companies have grown by leveraged buyouts of smaller competitors—not by successful competition with other cable companies. Successful head-to-head competition requires building a better network and providing better services. (The route, incidentally, that Lafayette has chosen.) Buyouts only require taking on large debt burdens…burdens in fact so large that they can make finding the money to make major service upgrades very difficult.

Now the NCTC is run by debt-heavy MSOs, not mom and pop, local, cable companies. Cox is merely the biggest. Many other NCTC members are no doubt in the same structural position as Cox cable—heavily in debt—and many of those are in the smaller locales that may be actually losing population. These smaller municipalities could reasonably feel that they’ve lost the local businesses to which they felt loyalty to faceless corporations who do even fewer network upgrades than the small local businesses did. Those small cities and towns are the ones that, nationally, are most likely to consider investment in a fiber network an investment in their future.

The NCTC has a legitimate national function…lowering cable prices for the customers of small cable companies and thereby allowing local alternatives to enormous international telecommunications corporations to exist. The outcome of the current conflict over Lafayette’s membership will be a decision-point for the nation. Either the NCTC will provide that service for all small operators or it will turn itself into an exclusive cartel that uses its purchasing power to push out all competition.

That is a national problem; it is not simply a small side fight down in some damp part of Louisiana.

Correction: It’s been pointed out that Lafayette has not really filed suit in response to the suit. They’ve merely responded to the NCTC’s Kansas suit. Point taken. That is actually clear in the press release. I let a fun line get in the way of a close reading…mea culpa.

LUS Files Suit, Sorta…(updated)

LUS, for a change, has initiated a lawsuit. Or at least an FCC proceeding. Close enough.

In a press release issued today LUS outlined its case for the public. That release underlined the basic irony of the situation that LUS finds itself in: fighting for admittance to a coop whose reason for existence is to help small guys, like LUS, somewhat level the playing field with big guys, like Cox. It’s outrageous that Cox is in a position to try and block LUS. From the press release:

The concept behind the establishment of the NCTC was to allow small cable providers to aggregate their collective buying power for national programming, therefore providing an opportunity for more competition in the cable TV marketplace.

In a move that is reminiscent of the angry days of the fiber fight here in Lafayette Joey Durel blasts Cox’s willingness to block fair competition:

It is a sad day for the free market economy when a corporation hundreds of times the size of a small, community-owned enterprise will use every means necessary to snuff out competition so that they can go back to charging outrageous prices for services.

That’s from the press release, and really that’s pretty much all you need to know. But the complaint to the FCC is only marginally less caustic in its lawyerly way. A reader who’d like to savor the full flavor of this story is encouraged to read it through. But if you’re not in that group, I’ll be happy to replay some of the highlights…

I was intrigued to see that the complaint to the FCC had a politically timely overtone…the introduction begins by emphasizing that LUS depends upon video revenues to “provide ultra-high-speed broadband services.” Devising a high-speed broadband plan is the project of the moment for the FCC and Lafayette’s LUS received much favorable attention in Washington during the plans proceedings, serving as the national poster-child for local initiative for having provided ultra high-speed broadband at a shockingly low price.

The complaint outlines the history of the conflict; and a very suggestive history it is. Congress. The NCTC, the complaint alleges boasts of its inserting a clause into the 1992 Telecommunications Act that assured that the coop would be treated like a cable company by content providers by convincing legislators that this was the only way to insure fair competition between the little systems it represented and the mammoth national cable companies. But, a two-year “moratorium” on new members the NCTC opened up their membership…to Cox and Charter; two of the nations largest multi-system operators. Since that time they’ve apparently quit admitting new members that would compete with their present (expanded) membership.

[The NCTC and its dominant members] are now undermining Congress’s pro-competitive intent by using denial of membership in NCTC as an anticompetitive device to insulate NCTC’s existing members from competition by new entrants.

A footnote offers evidence that Cox and Charter aren’t the only members who have fought against local municipal competition…MediaCom, SuddenLink, Bridgewater Telephone have also engaged in their own versions of the anti-competitive behavior Cox has practiced in Lafayette.

Lafayette wasn’t the only municipal provider caught in this trap. Chattanooga, Tennessee and Wilson, North Carolina were similarly denied membership–right up to the moment that they demonstrated they’d bring a complaint in conjunction with LUS to FCC. Then, suddenly, they were notified that the NCTC had reconsidered. LUS and its lawyers draw the obvious conclusion and urge the FCC to do the same:

NCTC’s discrimination against LUS cannot be explained on legal or factual grounds. In fact, the only significant distinction between LUS and Chattanooga/Wilson is that LUS’s major rival, Cox Communications, is NCTC’s largest member as well as a prominent member of NCTC’s Board of Directors, whereas Chattanooga’s and Wilson’s major competitors, Comcast and Time Warner, respectively, are not members of NCTC.

…NCTC’s continued flat rejection of LUS’s membership application, despite LUS’s offer to join under the same terms and conditions as Chattanooga and Wilson, underscores the arbitrary, discriminatory, and anticompetitive nature of the Defendants’ practices. Indeed, to keep LUS out, the Defendants are even willing to go so far as to harm the membership of NCTC as a whole, as the addition of another qualified member would increase the bargaining power of the whole group.

There’s more in the complaint, including a series of emails between Lafayette’s lawyers and the NCTC’s explaining—or rather refusing to explain—why Lafayette was being treated differently, the text of the first joint draft of the cities’ complaint, and the text of the NCTC’s attempt to pre-empt the three cities legal action.

It’s a surprisingly readable and interesting document. And it will be very interesting to watch this go forward. Lafayette has asked for a quick and frankly pretty brutal judgment against the NCTC and the individuals and companies represented on the NCTC board. I look forward to seeing how these companies enjoy having their feet held to legal fire.

Update: Back during the fiber fight when Cox and AT&T were doing everything in their power to eliminate LUS as a possible competitor each ugly episode made national news. The push polls, lawsuits, and incumbent-promoted petitions were widely reported. No small part of Lafayette’s victory was the result of unremitting bad PR in the national press. Those days have returned and the current fight over NCTC membership has garnered extensive coverage.

Local:
The Advertiser: LUS files FCC complaint
The Advocate: LUS Fiber complains to FCC; Cable TV order asked
The Independent: LUS alleges ‘unfair, deceptive’ conduct by Cox, NCTC

National:
Broadband Reports: LUS Files Complaint With FCC Over Cox Blackballing
Broadband Breakfast: Small Town’s Telecom Drama Continues: Municipal Utility Sues Cable Group For Discriminatory Access To Programming
Telecompetitor: NCTC Membership Fight Stirs Up Controversy, FCC Asked to Intervene
FierceCable: LUS blames Cox because it can’t get into National Cable TV Co-Op

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?