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A Fiber Optic Network, like other utilities, is a natural monopoly.
An Argument for an optical fiber network in Lafayette.
Lafayette will one day have a fiber optic network to the home. That is good; we will surely want one. However, any local fiber optic network will be a natural monopoly. Since there will be only one, the only real question is which of the possible alternatives Lafayette will choose. Will we have a private fiber optic network owned by either BellSouth or Cox in some indefinite future, or will we soon have a public one built by LUS? Deciding which provider we'd prefer means deciding who we want controlling our future infrastructure.
The public’s interest in this boils down to deciding who to trust to be responsive to local needs and concerns: LUS, Cox, or BellSouth.
There will be only one.
Lafayette’s fiber optic network will provide real competition for the current semi-monopolies, if someone other than BellSouth or Cox builds it. Once the fiber network is built it will be the only one—no one will be able to justify building a second network.
An oft-overlooked fact is fiber optics is a natural monopoly. In the long run there will be only one full-blown fiber optic network in any locale. For all natural monopolies (like electrical utilities, like water service, like fiber) building out two extremely expensive competing sets of infrastructure to serve every home with a cheap commodity simply doubles the cost the community must pay to provide the service. Water service, almost always a municipal service, is a good example of how natural monopolies work.
This is the textbook case of an instance in which every responsible economist says that single source provisioning, a monopoly, is more efficient.
This does not mean that there will be no competition for the services that are offered over the new fiber optic network. BellSouth will continue to have its phone lines and Cox its cable. You will still be able to buy cable from Cox based on their monopoly control of cable lines to the home. You will be able to buy phone service from BellSouth or any of the alternatives that lease use of BellSouth’s monopoly on the phone lines to your home. Cell phone service and satellite TV will also continue to compete with the traditional monopolies.
What will change is that the citizens of Lafayette will be able to buy phone, cable and internet services from a LUS in addition to the traditional providers.
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