Archived Lafayette Pro Fiber blog – Read Only

Sadly, my earlier enthusiastic endorsement of a Netflix/Tivo deal appears to have been premature. The CNET article, Picture Imperfect for Netflix, TiVo, makes a convincing case that such a deal is not immenient. But at the same time the article makes it clear that it is neither the technology nor the buisness plan suggested that is the problem. Instead the issue appears to be problems with exclusive contracts for prime release dates and that the content providers are still nervous about TiVo’s Digital Rights Managment software—software recently approved by the FCC over the major studios’ objections.

It’s still coming. Just not in 6 months.

Recall that the record companies didn’t care for Apple’s DRM either. iTunes was just a little test on a minor platform. But nobody dropped out over Digital Rights when iTunes made it clear that it had found the sweet spot at the intersection of price and user rights that could rein in runaway piracy. The same dynamics are set to play out for video—the difference is that audio can be easily downloaded over current bandwidth. Movies need real bandwidth (read fiber). When movie piracy becomes as scarey to the studios as the music piracy was to the majors TiVo will seem like a savior.

But not just yet…

And a TiVo settop box for LUS is still a good idea….

The Financial Times has a story today about BellSouth’s move to sell $3 Billion in bonds to help cover its 40 percent share of Cingular’s purchase of AT&T Wireless. The article came to my attention by way of Southeast Tech Wire, which is a daily eletter covering technology news in the Southeast US.

The total cost of the Cingular buyout of AT&T Wireless is $41 Billion. BellSouth’s share of that is, the Financial Times reports, $16.3 Billion. That’s more than double what Cox Enterprises is paying to take Cox Communications private. We are now speaking about large numbers! It’s pretty amazing that reps of these companies are quibbling over an LUS plan that is expected to total somewhere in the vicinity of $100 million.

This is not just another transaction for BellSouth. The Financial Times article notes that both BellSouth and its senior partner in Cingular, SBC, “have been selling non-core businesses to fund the deal.” So, the companies are having to exert themselves in order to raise the cash to make this Cingular/AT&T deal happen.

It’s no wonder, then, that BellSouth isn’t interested in building a fiber to the premises network in Lafayette. They’ve got higher priorities that are demanding their attention — like financing all this corporate debt!

Talk about life catching up to speculation! A theme of late on this site has been the disintegration of the Telephony business model under the onslaught of bits—especially as shaped by disruptive nature of IP protocols. (See blog on Skype, and the On Background article: The Road to Innovation is Open) One bit of speculation was the possibility (probability?) that video would go the same way. Here is the latest gust in that gathering storm: Tivo, Netflix Close to Internet Movie Deal. It’s a short little article but be not deceived. The story is huge.

As both a TiVo owner and a Netflix subscriber let me say that I, for one, would welcome this with open arms. Between these two services I watch a lot less boring TV than I ever have. I never watch ads. (Just fast forward through the ads using your handy TiVo clicker.) I never watch anything just because its what’s on when I run out of steam. (I’ve got a Netflix movie or a backlog of interesting shows recorded on the TiVo) I watch the movies I want and feel no need to upgrade my cable to all those extra channels (My wife and I have been on a Netflix fueled classic documentaries kick this summer inspired by seeing the still quite good “Louisiana Story.” Our own, custom-built channel.)

By all that I only mean to say: this can be successful, very successful. TiVo is the leading maker of DVR’s and no one has been able to match its user interface. Netflix has rocked the Blockbuster world and inspired copycats everywhere. These are both top-of-their-category enterprises with hundreds of thousands of customers that are fanatically loyal. Merging the two is sure to power a surge for both.

But business aside (and the stocks of both companies have jumped) consider the implications for cable companies. All that they have going for them that sustains their 30-40 per cent profit margin (See “There’s Gold in Them Bills!” ) is their monopoly control of their regional coaxial networks. The content they sell belongs to others. If you can go straight to the source and get it for cheaper—or even if you pay the same amount but get it when you want it and only the exact movies you want, wouldn’t you go for it? (I know that even on premium channels that I think are decent I would never watch any real percentage of the total that I “pay for.”) Other deals have had a hint of this–particularly a recently announced Starz-RealNetworks deal. But that would be way too technical for most (hey, for me anyway!) and would require a recent computer (not cheap) and a huge hard drive. The interface would have to be maddening. But TiVo is as smooth as silk. Folks whose VCR has blinked 12:00 since they bought it in 1992 use TiVo and easily record the latest season of “Charmed.” It has the huge hard drive. It has the nice broadband connection. It is really pretty cheap; certainly a lot cheaper than a tricked out media computer. It will be no sweat for TiVo to add this service and make it easy to use. It’s just a new top-level menu and the user’s well-established selection and search habits will do the rest.

TiVo has been desperately trying to court the cable companies for years. They would like to be in your settop box today. TiVo has been peddleing those nifty boxes for years and suffering the slings and arrows of assorted analysts for their failure to close a deal with the cables. The cable companies could have had this innovative add-on service years ago. But the cablecos have been unwilling to share the revenue stream and prefered to put off utilizing DVRs until they could slap together their own version. Cox started offering their only late this summer.

But now may prove to be too late.

You thought Florida had experienced some storms. You just wait.

Cox might soon have better things to worry about than the local issue of Lafayette’s fiber. Maybe LUS could make a deal with TiVo to install their linux-based settop boxes and thereby set up a smooth transition from the cable model to a content-provider based model which will eventually require a computer-based video machine. And there is no cheaper media computer than the TiVo.

Wanna really sweeten the deal for Lafayette? Notice that TiVo is based on Linux. ‘Spose you could install a nice X-11-like interface in a walled off partion and use the TV screen for a display? What Digital Divide? Just as fast as that every house that had inexpensive “cable” would have an “ok” computer with full internet connectivity. Slap on a little “open office” applications and a browser and off you go. At a price that would be unheard of.

(Thanks to Doug, who noticed this story and shot us a heads up.)

Update: 9:20 pm– The original Newsweek story has more details.

A ProFiber first: Blogging our own story. Mike’s recent open systems story has inspired a lot of interesting conversation between us that always seems to be interrupted by real life. It looks like it might be easier to talk here—and maybe we can involve others in a conversation that we’d like to see more folks having. ….Join in!

Mike pushes hard for considering a open systems model for any Lafayette fiber optic project. His point is built on history: open systems have historically been the engines of new development. Closed systems have a strong tendency to become dependent on their cash cow. The Bells, for instance on telephony, and the cables on video bundles. They not only aren’t very good at anything else but are tempted to suppress new developments which, no matter how lucrative in the future, might supress short-term earnings.

Taking a look at the story it’s hard to argue with the basic principle. Open systems are, all things being equal, more likely to foster innovation. But that might not be the only thing we value; other things might not be equal.

It’s worth recognizing that were it anyone other than LUS we wouldn’t bother with this conversation: BellSouth and Cox are firmly committed to continuing as closed monopolies; there is no chance they will ever open their networks voluntarily. LUS might, if convinced it would be of service to the community, so the conversation is worth having.

And the difference between LUS’s and Cox/BellSouth’s motivation in this points to a real issue: is LUS considering fiber to set the stage for dynamic development and economic growth or is it in it to provide cheap, reliable, locally controlled utility services to our community? Mike’s work suggests that they might not be fully compatible motives.

My guess is that, whether compatible or not in some theoretical sense, both the community and LUS want both. The question is whether innovation and service can be reconciled and if so how?

I’d be tempted by this path: Decide that present, well-established telecom services are like water or the roads. For those follow the utility model: universal access and cheap, community-driven pricing. But build big overhead into the system and make sure the connection at the house can handle really huge bandwidth. Wholesale that enormous extra bandwidth to innovators (giving preference, perhaps, to local folks) to develop other services or to find unique ways of integrating the basic services. (Remember video phones?)

Use the old services to build and pay for the network for as long as they last. And pledge the excess bandwidth to open system principles. Such a system would be neither open nor closed: a mixed system.

Thoughts?

James Fallows had an article in Sunday’s New York Times about his experience using Skype, the wildly innovative Voice over Internet Protocol (VoIP) tool that is going to wreak havoc in the telecommunications business.

Based on the article, Skype appears to be something akin to instant messaging and peer-to-peer technology wrapped into a single program. This much is clear: this technology is truly disruptive in the best sense of the term. It will be extremely attractive to consumers and will force telephone and cable companies to innovate, obstruct, or die.

This will be interesting to watch. Anyone out there have any experience with Skype?

A story in PCWorld, Has Your Broadband Had Its Fiber?, reviews the increasing momentum of the Fiber To The Home movement, focusing on the Baby Bell providers and the changing circumstances that are driving some carriers to begin pushing their fiber into the home.

The basic pressure is competition with the cablecos. As the story makes clear the Bells all realize that they have to get the bandwidth to compete with cable companies. But their strategies for getting there are very different. They are all promising their subscribers (and perhaps more importantly their stockholders and assorted analysts) much higher bandwidth in the near future.

I doubt that the numbers PCWorld repeats will be seen anytime soon—the history of these things reveals small incremental progress, with each step upgrade being paid out before the next is initiated is simply the way these folks think. (Notice that the lowest number mentioned is by Verizon which is the only one actually fielding the speeds their representatives discuss. And Verizon is using the superior technology. Caveat emptor!)

There are some interesting tidbits however:

The fiber dream has become a reality in Japan, where FTTH at 100 mbps has been offered since early 2002. There were 1.4 million subscribers to the service at the end of June, according to Japanese government figures, meaning FTTH represents just under 9 percent of Japan’s broadband subscriptions.

It will take the US decades to get anywhere near 10% penetration at the current rate of deployment.

The bottom line is one made repeatedly on these pages: Fiber to the home is coming; any protestation that you don’t need fiber made by incumbents is the rawest sort of disinformation–or our local execs are the only ones in their companies that haven’t gotten the message.

The only question that remains to be settled is who will own the coming monopoly to true broadband connections to the home.

More rollicking good fun from the fellas at Cox. What would we do for amusement without them? Cox is making a half-hearted attempt to come clean about their production of anti-fiber websites.

I’ve been curious, since last I posted on the deceptive way Cox presented its anti-fiber web presence if being outed again would lead to any change. (The first round, back in June, led to a temporary branding of some of the pages; but that disappeared again after awhile.)

Readers will recall that there were two sites involved: a website that funneled automated mail to city council members (which some members resent, and others dismiss as oddly ineffectual) and a blog run by Tom Cantrell of Tyler, Texas mascarading as a Lafayette resident.

The website has come clean as far as branding is concerned. The new version is a vast improvement (see the old) and clearly lets the reader know who is sponsoring the message. That message, unfortunately remains deceptive in that it relies on discredited research and inappropriate examples to make its points. (See, for instance, our fact check article Blowing the Whistle Over Bristol.) Another nice improvement is the automated letter-writting apparatus. It’s still a bad idea of course but the earlier version sent off a letter over your email address that you had never seen. You filled in your name and email expecting to at least see the letter, clicked the button and …that was it. I got a little thank you notice. But never I saw “my” letter. (Apologies Councilman Benjamen; that guy “Ima ForFiber” at “nota@realaddress” was me and I am actually in favor of LUS providing a fiber network.) The new version at least shows you the letter before you sign it and send it.

BUT the blog, linked to from the front of the website, remains unbranded and the author continues to advertise himself as a Lafayette resident. Tain’t so. He’s Tom Cantrell of Tyler, Texas, the Cox director of government affairs. My guess is that not only is he not a resident but that his favorite books aren’t Les Miserables by Victor Hugo or The Count of Monte Cristo by Alexandre Dumas, that Zydeco might not be his favorite music and that his favorite movie probably isn’t the Pelican Brief. But that’s what it says in his profile. (About that “government affairs” position: isn’t it endearing for the Cox governmental liason to sneer at public officials, even opponents like Huval, as he did in a recent post? They’ve got a different idea about how to go about building respectful relationships over at Cox.)

If they want a blog here’s what they need to do: come clean about the name and employment status of the blogger; fess up about prior lies and promise to reform. I’d use somebody else frankly; TJCrawdad aka Cantrell has pretty much played out his string in Lafayette.

This story from Friday’s Daily Advertiser demonstrates pretty clearly the opposite sides of the street on which consumers and the regional Bell operating companies (RBOCs) live.

The decision by EATEL to curtail its marketing of services is directly related to the success of the RBOCs (like BellSouth) in overturning rulings by the FCC and state regulatory commissions which required them to sell access to elements of their phone networks to competitive local exchange carriers. It was those UNE-P rules (which stands for unbundled network element pricing) which enable EATEL and other competing carriers like AT&T, MCI and others to sell discounted phone service to consumers and businesses.

The RBOCs hated the rules because they cost them market share. Now that the rules have been overturned and the Bush administration’s Justice Department decided not to appeal the decision, the RBOCs will be able to raise access charges to competing carriers. There was much speculation in communications trade journals, even before the administration decided not to appeal the UNE-P ruling, of a deal between the RBOCs and the administration. Word was that the RBOCs had assured the administration that they would hold off on those access charge increases so as not to create a publicly discernible political link between the decision not to appeal the court ruling and the ensuing price increases for consumers.

The price increases may not immediately be felt by consumers, but the disappearance of competition from the local telephone business does lay the ground work for the re-establishment of local monopoly control of services and pricing.

The flip side of the coin is that a lot of people working for companies like EATEL and others who worked on the competitive local access arena will lose their jobs, just as the 35 people mentioned in this story.

The message is clear: the Bells hanker to return to their monopoly roots, the FCC and the Bush administration are bent on letting them do that, with the result being less competition and higher costs for consumers.

Sort of like the returning to the 1970s, only with more cynicism.

Attentive readers will notice the following strange new icon on the bottom of most of the content at Lafayette Pro Fiber: The symbol means that our content on the page is covered by a creative commons “attribution only” licence. We are cedeing the vast majority of the automatic copyright restrictions that recent laws give authors and asking only that we, and the cause we represent, be given credit.

This is intended to free people who would like to use our content in support of similar causes elsewhere from worries about how much they can use and how much they can alter what they use from concerns about generated by copyright worries. The answer now is simple: As much as you like.

Use as little or as much as you like. Customize it for your area and history, drop our little francophone oddities, reword an infelicitous sentence, restructure the argument, pull little fragments or large sections. Do what you think will make it more effective. Don’t worry about the line between inspiration and “copying.” If at the end of all that our influence seems to warrant it, cite us.

We like life simple. We hope to help make it so for others.

For a further explanation and some philosophical ramblings to accompany it see our CC explanations page—the same page you will see if you click the question mark beside our cc icon on most pages. You can take a look at the creative commons deed itself; the page that will open when you click on the cc icon on our pages. You can go from that deed to the full legal document.

Enjoy!

A very significant gathering of academics, technologists, economic developers and political leaders took place at the Pennington Biomedical Research Center in Baton Rouge on Thursday and Friday. The occasion was Louisiana Optical Network Initiative (LONI) conference where plans for the development of a statewide research consortium among private and public universities tied together by a fiber optic network, which is itself connected into a national fiber optic-connected research network, were discussed.

There were two reasons I was happy I attended. The first was that Governor Kathleen Blanco announced ten years of funding for the project (hit the headline of this entry for The Advocate’s story on that). That’s a bold stroke and one that I believe will pay big dividends for our state in the years to come. The second was that I was there when Alan R. Blackburn spoke.

Who is Alan Blackburn? He is Research Director of Advanced Network Architecture Concepts for BellSouth Science and Technology. In his brief talk, Mr. Blackburn laid out BellSouth’s network strategy and made some statements of fact that are relevant to our discussion regarding fiber to the premises and LUS’s intention to deploy it here.

“Our strategy can be summed up by saying that we are converting the corporation from electrical to optical,” Blackburn declared. “We are moving from circuits to packets.”

He said BellSouth is putting significant energy into transforming the company’s operations which flows from this fundamental change of network architecture. “We are moving from narrow band to broadband.”

Blackburn said BellSouth is committed to wringing as much productivity out of its copper network investments as possible, but will do that by driving fiber optics out of the company’s central offices out closer to homes and offices. Blackburn believes BellSouth will, at some point in the future, be able to deliver 28 megabits per second of capacity to homes on its network using this fiber feeding copper strategy.

Still, he made it clear that the ultimate network that BellSouth envisions is a fiber to the home network. In fact, he said BellSouth currently has one million fiber to the home customers.

In addition, he said many of BellSouth’s corporate customers have deployed their own fiber networks and that BellSouth is managing those networks for them, emphasizing security and business continuity.

Blackburn said the company is interested in utilizing broadband wireless in its metro networks, creating a seamless network in which handheld phones would always have internet access, and could utilize both cellular and WiFi technologies to do that as well as maintaining voice applications.

In what may be news to the company’s Louisiana business customers, Blackburn said the company is “moving away from ATM and Frame Relay services.” The company is moving to Internet Protocol and Ethernet in its metro networks. He claimed that BellSouth has “the largest metro Ethernet network in North America based on the number of switches deployed.” The company also uses wave division multiplexing (WDM) extensively. This is the technology that turns each color in the spectrum of a laser beam into a separate communications channel.

Blackburn said the company is working with researchers to develop the means to deploy video services over its DSL networks (again, using fiber to help push more capacity over copper infrastructure). He explained that the company believes that developing the ability to deliver video (and then having the video to deliver) is critical to the company’s future. Think in terms of their competitive profile versus Cox; Cox can bundle cable with internet and phone service. BellSouth has no video service to bundle, leaving it with only internet and phone service to bundle and discount.

Blackburn said the company is actively seeking what he called disruptive technologies. One example he gave would be some combination of instant messaging that included a shared video feed. He said this would enable people to instant message while watching a movie or program ‘together’ from their separate locations.

Finally, Blackburn said he completely buys into a vision of what BellSouth needs to focus on in order to prosper in the future that was laid out by motivational speaker Ken Blanchard at a seminar Blackburn attended a while back. That vision: “It’s not about satisfying the customer. It’s about creating raving fans of your business.” From what I can tell, they’ve got the first part down cold; it’s part two that will require some heavy work.

It was a pretty enlightening few minutes, which came across as a pretty ringing endorsement of the technology approach that LUS wants to use here. The chief difference is that LUS wants to bring this technology to every home and business, not just those who live the gated communities and high-end developments. And, LUS wants to bring this technology here sooner than BellSouth has determined we should have access to it.