BayouBuzz-ing the Lafayette Pro Fiber site

Steve Sabludowsky’s BayouBuzz site carries an interview with John St. Julien and I today about our site. Steve asked several questions that get to the heart of the issue in ways that only an outsider can. The questions pushed our thinking some and brought new insights in the process.

Steve’s promising to bring other perspectives on the Lafayette fiber discussion to his site, so keep an eye out for those. If you don’t subscribe to the BayouBuzz daily emails, you should. Always lots of good news and political links, as well as provocative commentary.

Meanwhile, checkout the interview!

Vitter comes out in support of municipal fiber

Sunday’s Advocate carries the article “Senate hopefuls vow to help La. get its fair share” in which the four major senatorial candidates participated in the Louisiana Municipal Association’s forum held during the association’s annual meeting. For fiber afficanados the interesting—and surprising—move of the event was Vitter’s coming out in favor of giving local government more freedom to provide telecom services:

Vitter also noted he supports giving local government a freer hand in providing telecommunications services — cable television, Internet and telephone — if they can offer those services more affordably than private companies.

Competition serves consumers better, he said.

Frankly, I was surprised. But maybe I shouldn’t be; after all it really is conservative to be for competition and to favor local government with its closer-to-the-people connection in cases where the state seeks to restrict what local governments are allowed to do on behalf of its citizens. I can only think that he wants to bolster his support in Lafayette–and it’s interesting that a conservative thinks that endorsing telecom utilities will help him in Lafayette Parish. He must think the people are pretty much overwhelmingly in favor. And in that he shows (IMHO) good political judgment. Of course, the endorsement is a cheap gimme since our federal representatives have nothing to do with the law recently put in place to limit local government’s ability to provide telecom cheaply. At any rate, GOOD. The more the merrier. Maybe we can get this on the radar screens of other candidates.

There’s Gold in Them Bills!

In June, the University of Southern California Law School (Yep! THAT USC!) and the Annenberg School for Commmunication co-hosted an event called “A Symposium on the Los Angeles Cable System at USC.” The headline on this entry will take you to the summary of the comments made at that event. They covered a lot of ground that day; much of it relevant to our discussions here.

For purposes of this entry, I’d like to focus on the comments attributed to Greg Kohl, director of research of the Communications Workers of America (the CWA represents thousands of workers at BellSouth and other Regional Bell Operating Companies). The title of his presentation was “A Look at the Economics of the Cable Industry.”

Well, it’s an eye-opener!

Among the many relevant points Mr. Kohl makes (according to Digital Democracy’s Digital Destiny Campaign report on the event) are these: the average cable customer is valued at $3,820 per subscriber; that operating cash flow margins (that’s what you and I would call profits based on system operation) run between 29 and 40 percent; and that cable prices have been increasing at five times the inflation rate over the last several years.

All this says is that the cable system business is very lucrative, based solely on the subscriber base revenues. But, there’s more.

Mr. Kohl also declared that cable advertising revenue out-grew the cost of buying programming by $2.6 billion between 1996 and 2000. So, wonder what that cat fight about ESPN programming costs a few months ago was all about? Multi-billion dollar conglomerates fighting over your wallets?

But, the slide that drives home just how lucrative the cable business is came in slide 16 of Kohl’s PowerPoint presentation (I’ll paste in a link below).

The slide is headlined: “Nine of the World’s Richest People Got Their Fortunes from Cable.” Let’s work down the list for the benefit of those who will not be making the trip to the page:

  • Ted Turner — TimeWarner, TBS, others — $2.3 Billion.
  • Barbara Cox Anthony — Cox — $11 Billion.
  • Anne Cox Chambers — Cox — $11 Billion.
  • Harold FitzGerald Lenfest — Lenfest Cable — $825 Million.
  • John Malone — TCI, other cable TV — $1.9 Billion.
  • Alan Gerry — Cable TV — $1.1 Billlion.
  • Amon Barr Hostetter, Jr. — MediaOne, others — $2.1 Billion.
  • Charles Francis Dolan — Cablevision — $1.4 Billion.
  • Brian Roberts — Comcast — $625 million.

Viewed in this context, the fear, uncertainty and doubt that is the core of the Cox/BellSouth campaign against the LUS fiber to the premises project is almost comical. What they don’t want — particularly Cox — is for anyone to get their hands on the gold that’s in them bills!

No wonder Cox Enterprises, Inc., is willing to cough up $7.9 Billion to by the 38 percent of Cox Communications the company does not own!

Here’s the URL for the Kohl slide presentation:

Welcome Visitors, Open Thread

The Adverstiser published an article in today’s paper which covered this site. So we anticipate a few new visitors. We’re a pretty open crew and are interested in feedback. This little post is an experiment intended to provide a way for folks to respond to both the blog and the website as a whole. (If you prefer you can use email.) What works and what doesn’t? Advice?

Just click the comments button below. Thanks!

Fiber optics debate goes online

Claire Taylor of the Advertiser picks up the story of pro and anti fiber websites, in it she features our site (yeah!) and also covers the official LUS fiber for the future website, and the Cox produced “Let the People Vote.” I’d want to point our readers to the oldest blog on the subject in addition: LUS FTTH which recently got back from a little break.

Gotta get around to putting up a links page.

Broussard Mayor Supports Lafayette

I’d like to be able to link to Broussard mayor Charles Langlinais’ letter of support for LUS but unfortunately it just isn’t showing up on the Advertiser website—nor are any other letters from Tuesday’s Advertiser. I attribute this to the generally flaky nature of their website.

But the letter really should become part of the record and since you can’t get it at the Advertiser you ought to be able to get it here. Langlinais nails the proper role and motives of local government and clearly points to the motives of Cox and BellSouth (profit maximization).

It looks like fiesty public officials are getting to be a tradition in this parish with Langlinais joining Durel in a healthy willingness to say what needs to be said.


Image of Broussard's Mayor's Letter

Follow the Money?

Well, I tried to follow the money. I went to the LUS budget review presentation for 2004-5 at the city-parish council meeting yesterday evening. As I had suspected, there was no budget item for the fiber initiative since there is no proposal to budget. Still, it was worthwhile—and interesting—to see the principals in action and to watch the dynamics of their interaction.

The Advocate and the Advertiser both have stories worth reviewing online. The Advocate’s Blanchard emphasizes the fiber angle and is thus probably more interesting to readers of this blog. Taylor’s in the Advertiser is worth reading on this score as well but she gives more prominence to other issues—and, indeed, the meeting spent more time focused on issues other than fiber.

I should really say that I came out of it impressed with the competence of all involved. Now a number of the councilmen weren’t there and maybe they are the ones that fit the all-too-popular stereotype of local politicians but I have to say these guys seemed smart, competent and earnest. Possibly I’m naive. But, hey…

I’ll not try and do a play by play or even be exhaustive in dealing with the high points of the event. Our interests here are the “Fiber for the Future” issue and for that there were three “C’s” worth highlighting: Context, Competence, and Class (or lack thereof).


The context of any fiber proposal, for both LUS, and the council, has to be as important in its approval or defeat as any actual business plan for a fiber optic network itself. Not to put to fine a point on it but the council and LPUA have to be concerned with the overall health of LUS and the services it already provides as well as any proposed new telecom utility.

In that context even fiber partisans should recognize how dominant electrical generation is and will likely always be in LUS’ budget. The current bond issue for purchasing two new gas-fired plants is substantially larger than the 100 million discussed to start up a fiber network and ongoing fuel costs are fully half of LUS’ total budget. Power is and will remain the most important utility LUS provides in terms of both human needs and simple cash.

I was interested to find that sewerage supported by other LUS services to the tune of about 20% of its total cost. While no proposal for change was in this year’s budget the brief back and forth on this point made it clear that all recognize that eventually this will likely change. Apparently new wastewater regulations and an aging infrastructure have lead to escalating real costs of providing treatment. Local government has effectively chosen to consider these extraordinary costs one-time expenses and has not passed all of that cost on to its citizens. So part of your electric bill supports sewerage.

The effect of this is probably to give a small break to the poorer residents of the city since the poor and the wealthy are almost certainly closer in their water usage than in their electrical usage. That is an intensely political if very quiet decision but one that seems absolutely right to me. What interested me is that it is clearly a longstanding practice to support the universal, inexpensive provision of one service out of the profits of another.

For fiber partisans what is interesting about this is that, by new BellSouth-sponsored state law, any LUS telecom venture will not be allowed to benefit the less well-off in the same way. And that is too bad. It is the kind of decision that we ought to be able to make about our own community without outside interference.

Annexation questions occupied quite a bit of time with discussion of an upcoming contract with SLEMCO that would allow LUS to “buy out” its customers when an area is annexed. Council members appeared to carry a good bit of frustration around that Lafayette had lost ground during the last “eight years” to more “aggressive” surrounding municipalities. In part this was due to lacking an agreement that would allow LUS to offer full city services to the areas annexed and the councilmen clearly wanted that situation to end.

Their frustrated passion led me to wonder if there might not be a fiber angle to annexation issues. Surely the provision of “full city services” that accompany annexation would be much more attractive, especially to outlying, upscale subdivisions, if being annexed provided access to cheap, truly fast internet, cable, and phone services as well as the traditional utilities. Realizing that potential advantage would involve an intricate dance with the adjacent parish municipalities who, by all the evidence I can see, have been promised a place in line for the fiber offered by LUS. Broussard’s mayor recently defended LUS (oddly, no online link for letters for that day only exist at the Advertiser) and additionally the city-parish’s LINC study has suggested tighter integration between adjacent water and natural gas utilities would lead to greater efficiency for all. There are potentially some very touchy, very local political issues just under the surface.


One of the more unfair issues that anti-fiber folks have raised is competence. There has been an awful lot of insinuation that somehow LUS is incompetent. Way too much of this has been based on nothing more than the generalized feeling that government just can’t be competent. That is silly. The actual facts are pretty clear. LUS, bond issuing agencies highest rating and has traditionally had the lowest rates around for its services. It replaces its plant as is needed. (Broussard’s water quality problem, for instance, is a result of not undertaking the infrastructure upgrade that has been necessary for at least a generation.) According to data from the Public Service Commission LUS provided at the meeting it has the most reliable electrical service in the state. By all the evidence it makes responsible, locally driven decisions with a noticeable eye for the long term.

There were some new numbers revealed on LUS’ already established wholesale broadband business, a recent target of insinuations that LUS has been hiding loses and has not been making its business plan’s goals. But according to LUS last night, its wholesale business is healthy and ahead of its projections. It projects an income of one million in 2004-5 based on revenues of 820,000 this year and 600,000 last. At that rate they expect to breakeven in year 4, ahead of schedule.

Class (or lack thereof):

There was evidence that the city council is tiring of Cox and BellSouth’s tactics. Some discussion early in the session about restrictions on LUS advertising and what sort of educational advertising was deemed legal were puzzling references initially. As the session went on it became apparent that council folk were angry about the recent Cox full-page ad that ran in the local print media recently. Council members are taking umbrage at the sorts of deceptive tactics BellSouth and Cox are using and are urging LUS to reply. But there are restrictions on LUS advertising that seemingly makes that difficult. Both stories cited at the top of this entry carry amusingly exasperated quotes from councilman Mouton on Cox’s tactics. But the papers did not report that chairman Stevenson injected his opinion that he was actually seeing very few emails or other complaints generated by automated mailers sponsored by Cox—and that he was seeing several times that number of “unsolicited” endorsements. If these guys ultimate goal is to sway the council I would have say that as far as I can tell their current tactics are working against that goal. A little class would be my first recommendation.

Wired News: Big Business Becoming Big Brother

One of the threads of those who oppose the LUS fiber to the premises proposal is an attempt to cast the plan as some kind of nefarious guv’mnt plot to encroach on the rights and privacy of Lafayette citizens.

Well, friends, the sad truth of the matter is that if and when the black helicopters do start landing in your back yards, they’ll have corporate logos on them!

WIRED has an excellent story on how the federal government has circumvented laws and rules designed to stop them from invading the privacy of citizens simply by accessing the databases of corporations! The WIRED article is based on a study by the American Civil Liberties Union that details what it calls the “The Surveillance Industrial Complex”—the web of cooperation and information sharing that has developed between federal agencies, law enforcement and corporations.

Call it the ‘adaptive enterprise’ approach to information gathering. That is, confronted with which blocked various data sweeping operations carried out directly by the government, the feds turned to private sector companies which, by the way, have much more information stored on much more robust systems.

The ‘LUS as Big Brother’ makes no sense from a scale of enterprise concept—I mean LUS’s annual budget would be barely an accounting blip at Cox, BellSouth or even Gannett.

The reality of the situation is that it is all that information you freely give companies when you use their credit cards, register for their give aways, use their ‘preferred customer’ cards, your credit reports, your travel records—all the stuff you thought was somehow private—these are the records that companies are freely sharing with law enforcement, a.k.a. ‘Big Brother.’

That opponents of the LUS plan will continue to shamelessly raise this canard as evidence of their desperation—and lack of respect for the intelligence of the citizens they claim to hold in such high regard.

If you’d like to get a copy of the ACLU’s report on the Big Government/Big Business attack on privacy, go to the ACLU website ( You’ll find a link to the report there.

Free Enterprise? How Cox deals with Competition: Let the State Tax ‘em

Cox, most noticeably of the two main fiber antagonists in the Lafayette battle, has chosen to try to cast fiber issue of one of ‘free enterprise’ versus ‘government.’ That’s pretty misleading, IMHO the real issue is rather a matter of choosing between private and public provision of a natural monopoly. Do we want a large private corporation or a local public utility controlling the natural monopoly that any fiber network will inevitably be?

But with the ideology of a radical, simplistic “free enterprise” position (all private good, all public bad) so prevalent, Cox seems credible when they claim to merely be for preventing “Government” from competing with “Private Enterprise.” And since the charge would be more or less true if it were really the case that “free enterprise” rather than monopoly power were at stake all they have to do to win this point is to keep up the illusion that their monopoly power is not at the heart of our local issue.

So Cox’s public presentation of itself in Lafayette is one of a pious champion of business against the overbearing, grasping state. It’s a nice role to play. But it just isn’t true.

A good example of this is that Cox has fought a losing battle for years in Arizona to force the state to impose taxes on competitors in order to force them to raise their rates. Government interference with free enterprise is just fine if it works to Cox’s advantage. In fact Cox is willing to demand it.

Asking for Taxes

What taxes? Cox has been losing cable customers in recent years (while taking in more revenue) and mainly losing them to satellite providers whose newer satellite technology evades Cox’s monopoly on local coax networks. One advantage of this newer technology is that it doesn’t lead to local franchise arrangements with local governments in which cable companies like Cox contract with the local government to pay the government for the use of its right-of-ways and for use and maintenance of the poles on which the cable runs. Satellite TV is more efficient than cable, at least in that way, and that, part of the more general fact that cable has to maintain a much larger on the ground infrastructure gives satellite a competitive opening.

So Cox is faced with a classic free enterprise choice: either continue to bleed customers to price-efficient Satellite or lower its’ rates and compete on price.

What does Cox do? Cox chooses to…try and raise their competitors’ rates.

Cox wants the legislature in Arizona to step in at the state level and tax the Satellite companies for costs they do not legitimately incur at the local level.
That’s right, Cox has lobbied the legislature to impose state taxes on its competition, but not on Cox, so that their competition will have to charge more to their customers. That takes real gall. I almost admire it. There is a Louisiana flavor to the exuberant, unashamed attempt to make government serve private corporate interests at the expense of its citizens.

But it doesn’t end there.

Demanding Taxes on your Competition

In a move that seems to have shocked even its allies with its heavy-handedness Cox has demanded that candidates sign a pledge to support “tax equity” before Cox will give them money to run for election. That’s sort of like a promissory note. The politician signs a pledge to provide a vote when the debt is called and Cox pays the politician. Pretty direct. Not pretty.

And it does throw doubt on the idea that Cox is simply promoting anything most of us would recognize as “free enterprise.” This is monopoly behavior.

Take home

Taking the message home to Lafayette, situations like this should help us see that what is happening here in Lafayette is simply the way that monopolies react when faced with competitive disadvantage. When their natural monopoly—born of their ownership of the only wired network that can carry the service—is no longer enough to eliminate real competitors monopolies turn to government to keep from losing in free competition. Certainly Cox does.

The Arizona situation is analogous to our own: LUS is suggesting that fiber technology is superior to coaxial cable in that its use would let LUS provide services similar to Cox’s for less money. Cox and BellSouth don’t want to lose customers. And they don’t want to lower their rates to compete. So Cox endorsed a BellSouth promoted State law that imposed a special “tax” on local government that Cox and BellSouth don’t have to pay.

What taxes? What was outrageous in Arizona is both outrageous and in that fine, special, Louisiana way, absurdist. Its outrageous to ask the state to pass a special tax on your competition because you have to pay for services they don’t need; it is outrageous to get the state to do so with the open intent of raising costs for your opponents so that they have to charge the public more; it is outrageous to admit you do so so you can compete more profitably. But it is absurd to ask the local municipalities who own the right of way, who built the poles and maintain them to pay as if it were having to buy access from itself. Who gets paid? Local government. Who loses? Only the customer. You pay more for what you buy. We get to watch the spectacle of the Louisiana “Public Service” Commission being told by our state legislature to make sure that Lafayette charges its citizens enough more than it would otherwise in order to cover the cost of something that it already paid for. It is absurdist. It is surreal. It is wrong.

Here is what is wrong with the PR image of Cox as a partisan of “free enterprise:” They act like monopolists.

It’s not what you’ve got; it’s what you do with it!

The Washington Post has a great article on the Digital Divide initiative that the nonprofit organization One Economy is driving in a number of larger metropolitan communities across the country.

The program is bringing affordable, shared, broadband wireless connectivity to residents in Philadelphia and other cities.

Reading the article, it is clear that the folks running One Economy grasp the idea that bandwidth has the power to transform the lives of those with access to it. The higher the speed, the greater the potential to drive change.

Rey Ramsey is the CEO of One Economy. This is what he says about what he believes the impact of this affordable bandwidth will be on those getting access to it:

“Broadband brings advantages in addition to all the new entertainment applications, Ramsey argues. His long-term vision is to use the Internet to revolutionize a social and educational services, such as homework assistance and helping find jobs, insurance and health care, much of which would require faster connections for video and interactivity.”

Note, too, that Ramsey and One Economy recognize that they are creating a demand for still-higher speed connectivity with every connection they make today.