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The Advertiser introduces a pernicuous bit of misinformation in its article " Consumers still guessing about fiber-optic costs." This reads a whole lot like a story that an editor asigned the intern and then forgot to review. As nearly as I can tell, however, the author is the business editor. Oh well...
The author conflates fiber optics networks with triple play offerings in both the title and the closing sentence of the story. The fact that she recites the technical differences in the middle of the story is only evidence that she profoundly misses the point and has no idea as to what the significance of these differences are.
Truth is, what is hidden from the reader of this piece is that triple play plans are not all created equal and that he difference lies precisely in what is conflated: an all fiber network will simply have the headroom to supply more services and enhanced services over its network. By offering more services an all-fiber network will be able to defray its costs over a larger number of products and, all things being equal, will be able to offer any one of the services for less money. It can offer ehanced services that simply will not be possible over the hybrid coax or twisted pair networks with which it competes. For instance: it is extremely doubtful that BellSouth can supply HDTV over its lines. Given its current architecture Cox will have a lot of trouble supplying many more HDTV channels that it currently does—an issue that looming regulation deadlines concerning local HDTV broadcasts of multiple HDTV streams and the cablecos' obligation to carry those makes very real. A full fiber optic system will have no such constraints and will not need to pray for new technology or regulatory relief to offer a full array of high-end services.
The article does a desultory job of listing, without totaling for the reader, the likely costs of independent elements of the triple play drawn from Cox and BellSouth figures in the region. It would make considerably more sense as an article about the triple play if it added up those figures and compared the services offered with the projected prices. After failing to let the reader know the likely totals for BellSouth or Cox it mentions the widely bandied about 85 dollar price for LUS services and signs off without informing the reader of the most salient point such an article about prices could have made: that LUS has firmly promised to undercut any triple play package in the market by 20%. If the story was supposed to help the consumer guess about triple play costs, as the title indicates, then missing that was to miss the presumed point of the story.
All in all, a sad display.
The Advertiser in its Sunday editorial, Public should attend fiber-home hearings, promotes attending the city-parish council meetings that will discuss LUS' fiber plan.
The Advertiser is right in calling for public participation. There has been little real discussion of the idea beyond the most basic generalities and a discussion of the details of the implementation would go a long way toward establishing a give and take between the community and LUS. .....However I don't really expect a lot of this sort of detail to come out in the context of a council meeting. The format just isn't right. The presentation is to the council and only the council can effectively ask hard questions. Public input is effectively limited to less useful condemnations or endorsements of the idea or the few specifics placed before them. Of real discussion, of the back and forth dialog that fosters real understanding and new ideas I expect none.
That Lafayette will simply not have the opportunity to have a real conversation on this with LUS is a direct product of how Cox and BellSouth have chosen to conduct themselves and the bulk of the blame lies at their door. Neither Cox nor BellSouth would benefit from a lowkey, honest, practical, nonideological discussion of the issue. That is because the honest, practical, ideology-free fact of the matter is that this decision is almost all upside and the downside is very small. A reasonable discussion would have started and ended with taking a good look at the issue of electrification. Has LUS' electrical utility been good for the city? The honest answer is yes. Is the fiber optic initiative similar? The practical answer is yes. The conclusion (after much discussion, no doubt) would be inevitable: going forward would be in the city's best interest. Cox and BellSouth know that. And since Lafayette's best interest has nothing to do with their decision making they decided to throw a fit that deprived us all of the very valuable discussion about how to do it. That is why we should really be mad at BellSouth and Cox.
LUS could have done more, however. It isn't at all clear that the defensive crouch forced on the public utility by incumbent misbehavior is still necessary. In LUS' favor it has to be said that they have been willing to meet privately with concerned citizens and have been responsive to questioning. But that does not substitute for public hearings with diverse groups (like neighborhoods, entrepreneurs, teachers, and techy types) where a back and forth flow of ideas could develop. As it stands now few know the details and only a few can adequately prepare for what is coming. We certainly hope that will change as the plan goes forward. If Lafayette is to gain maximum benefit from the fiber network ongoing conversation will be necessary.
All that said, and with minimal expectations for the hearings to produce the conversation that is most desirable, I still think we all ought to go.
First, of course, to hear what details we can. But also to show support for the larger idea. Rest assured that the Corporations will turn out their paid-for troops for these events. Be certain that the public response time will be full of mean-spirited and pointless sound bites meant to make the council and the public fearful and uncertain. With passage appearing assured supporters will be tempted to stay home. Please don't.
Bayou Buzz reports that the Governor has made her appointments to the Broadband Council. Readers with a long memory will recall the law that established the Broadband Council. The Council is tasked with developing a plan for providing broadband in rural areas of the state.
There is a story behind this simple BayouBuzz listing. The establishing law, as is common, was originally introduced in parallel form in both the house and the senate. Co-sponsors in the Senate were Noble Ellington and Lafayette's Michot.
If Noble Ellington seems familiar it probably wasn't because he co-sponsored what was originally a pretty good bill. More likely it is because you vaugely recall something about a Louisiana senator saying " tolerance is tearing down the foundation of this country" and getting a lot of great publicity for our state in the national media. Now this Noble fellow from Winnsboro took that bill, which was intended to promote rural broadband and handed it over to BellSouth's lobbyists to be refashioned into a bill that would forbid local governments from providing broadband for themselves. Seems a little....odd, contradictory, hypocritical? I think so too. Blanco, the Louisiana Municipal Association and the Police Jury Association of Louisiana wrangled a less onerous version that allowed the project to go ahead but made it much harder for municipal utilities to provide such services. Now this guy Noble is put on the Broadband Advisory Council. Makes some sort of twisted Louisiana-style sense—after all if you are going to actually do something sensible you need to make sure that it has a fair chance of failure. Only in Louisiana.
But the fun doesn't end there: Terry Huval is also appointed a member. Yes, LUS' Huval.
It should make for interesting conversation, don't you think?
Here's the full list of appointees to the Broadband Advisory Council:
Carlo MacDonald, Baton Rouge; Gordon Polozola, Baton Rouge; Terry Huval, Scott; Tommy Williams, Baton Rouge; Senator Noble Ellington, Winnsboro; Representative Francis Thompson, Delhi; Bob Manuel, Ville Platte; Emile Cordaro, Prairieville; Larry Henning, Baton Rouge; Gene Dry, New Orleans; Ted Miller, Arnaudville; Sherman Tate, Little Rock, AR; Cheryl McCormick, Baton Rouge; John Pat Bullock, Shreveport; Roger Stouff, Jeanerette; Judy Brown, Homer
Smartmoney runs an article that raises real questions about whether the Bells can hold onto their core business while investing heavily in wireless and fiber. The implication for Lafayette lies in the fact that the Bells are focusing on expanding in those areas where their investment yields the greatest return. But post-LUS Lafayette cannot be seen as a profit center relative to most locales. Residents of Lafayette should be very cautious about believing that any Bell, BellSouth included, will make a business decision to compete just to compete; what they are seeking is maximum profit.
Here's the gist of the article:
Verizon Communications Inc. (VZ), the nation's largest phone company, said Thursday it would consider selling off as much as one-third of its nearly 54 million local phone lines as it reported third-quarter financial results that showed strong growth in less traditional areas like wireless and Internet services. That's astonishing news even if it never comes to pass. Giving up lines voluntary is like giving up your bread and butter; it just doesn't happen. But what is apparent is that Verizon is willing to consider giving up their crusty, reliable "bread" for the richer fat of their "butter." It isn't that the lower yield (mostly rural) 1/3 of their base isn't profitable. No. It is that the wireless and fiber-feed "sheep" yield more lucrative and profitable "butter." I'm sure that they'd like to keep it all but Verizion in particular has invested heavily in both wireless and fiber (Verizon is the only teleco with real fiber to the home) and they have to finance that in some way. Confidence in the telecom's has been falling as many analyists show concern that they are having their lines taken by wireless phones and more recently by cabelcos like Cox (who, not incidentally, leads the cableco pack in this regard and is introducing telephony in Lafayette). Consequently, investment monies get more expensive or simply become unavailable. They will need to pay for some of this themselves and be willing to demonstrate their own confidence in the new technologies.
Here's the nut: they don't have the money to do it all. They just don't. Not even the very largest and most progressive, which Verizon is. They will not be able to invest in any but the most profitable tier and will even consider losing huge chunks of their legacy to bridge the gap.
Places like Lafayette were never at the top of that list. And we will be even less likely to raise to that level when we have a fiber optic network of our own that both takes real market share and establishes a cap on the price of the most lucrative services.
Don't expect BellSouth to be able to carry through with any promises it makes in the next two weeks. Reality is closing in on them as it is on all the Bells. They just don't have the resources to do it all and will, inevitably, focus on what yields the greatest return.
In a move apparently required by the interaction of state and city-parish law two ordinances that will be discussed on November 9th and 16th—and voted on on the 16th will be introduced November 2nd. City-parish rules require a two week span between introduction and vote on ordinances. One would officially "adopt" the feasibility study (as required by state law.) The other would create the LUS structure that is necessary to provide the firewall between LUS' new functions and its old services that will meet the requirements that old functions not subsidize the new business.
Blanchard closes his story by noting that "The council will have the option of defeating the introduction of the ordinance, which would effectively defer the matter." That might bear watching. I can't imagine that LUS would introduce this unless they knew the council was willing to put it on the agenda but Blanchard is easily the best-informed reporter on this beat and isn't given to including nonsequiters into his articles.
The AP story, Ready to get your fiber?, runs a informative, clear, educational story on the telecom issues of the day. It focuses on fiber deployment (natch) and the author has done his homework on delving into the intricacies of the regulation, differing strategies for using fiber, and the history-based cynicism of some observing the teleco's new promises. (Fiber has been promised for over a decade.) Where a strategy requires technology not yet in place, such as the advanced DSL that will make BellSouth's fiber to the curb strategy tenable, he says so. The story also explores the competitive environment which may well make further telco delay too risky and some of the empirical signs in terms of bids let and equipment ordered that indicate the logjam is actually breaking this time. Nor does it miss the possible change in regulatory environment that regime change in Washington would bring. Tying this all together in a newswire story is a quite a feat. Click on over.
Good reporting and an excellent example of the difference between faux, publicity-release scribbling and intelligent, informed commentary. The author deserves a byline he or she did not get.
The Advertiser has queued up a story, Cox rolls out telephone service, for tomorrow that is focused on Cox and BellSouth offering new services. The isn't exactly news since Cox has been saying it was going to roll out VOIP in Lafayette in November for quite some time—as we have reported here repeatedly—see the CNET report. The story also let us know that BellSouth has "recently" begun offering DirecTV service. Really? Recently?
It would be interesting to have a little overview piece on all the changes coming to the telecom market in Lafayette. But something like this really doesn't do the job and its desultory focus on triple play items, without actually mentioning LUS, just seems strange. There is a good story in all the changes, however. Cox is about to tie up its capital in merging with itself; BellSouth is getting monopoly control of its landlines back: and Cingular just became the nations largest cell phone company. How do all the changes effect Lafayette? Now that would be a story worth telling.
I do hope this version makes it to an editor before it hits the paper.
Update: 8:00 am 10/28/04
The version of this story that makes the paper: Cox hopes customers take its calls is quite an improvement over the one (still available at this writing) that we saw last night. It shapes the basics into an actual story by seeking reaction from all the potential purveyors of "triple play" options. It still errs in leaving the impression that this is a new announcement and in leaving unremarked the Cox claim to have spent 150 million to "prepare our network here for this service." Had Cox actually done so it would certainly prove the wisdom of LUS which is building a whole new fiber optic system for 110 million. I guess private enterprise is just plain inefficient and we can't expect anything better.... Seriously, a simple question like asking the length of time over which this amount was spent and the the geographical boundaries it refers to would have gone a long way toward helping the reader make sense of a nonsensical factoid thrown out by Cox's Cassard.
But then the educational functions of a newspaper, the idea that a newspaper is to actually inform and help readers understand the world it reports on seem far from what we actually see in the Advertiser. This little bit of uncritical repetition is small in itself but is all too indicative of what we regularly see in reporting on the fiber issue from the Advertiser. It is really unfortunate to again recognize that we have to look to the Baton Rouge paper or the Wednesday publication of a still-new weekly to get decent reporting on this critical issue.
Consumer's Union responds to the FCC's approval of the merger of AT&T Wireless and Cingular in AT&T Wireless, Cingular merger bad news for consumers.
What we are looking at here is a further FCC-sponsored erosion of competition in voice communications. Between the recent willingness to allow the telecos to price competition off their network and this decision which locks up large chunks of spectrum in the hands of a single competitor look for a shrinking market in alternatives not just for landline phones but for their major alternative: cell phones.
Mark Cooper, director of research at the Consumer Federation of America, added “no matter how you cut it, this merger is anti-competitive. In major cities across the nation, such as Dallas, Orlando, San Francisco, Memphis, Indianapolis, and New Orleans, this merger will allow the dominant local phone company to control 40 percent or more of wireless customers, in markets where they also control 90 percent of residential wireline customers.”
...the merger sets a dangerous precedent that makes it virtually impossible to block future mergers involving Verizon Wireless and the remaining wireless companies. By allowing Cingular to control up to 70 out of 189 megahertz of available spectrum in a market, the FCC is signaling that Verizon can bulk up in the same manner, leaving only enough spectrum for one potential competitor – even with current plans to auction off new spectrum.
With BellSouth/Cingular as the dominant local supplier Lafayette will be at the center of this drift back toward monopoly provision of telephony. If you thought Cox's ownership of the cable monopoly was bad (suppose Cox were buying DirecTV) get ready for her mean sister...
Now more than ever: I want my wifi/wireless CityCell phone from LUS.
The Washington Post article, Broadband in Suburbia illustrates both the promise and the problem of fiber optic networking.
The promise is nicely outlined by the ways in which people are finding to benefit from a speedy broadband connection (and the cable, VOIP and wireless netoworking that will almost inevitably go with it.) From the story:
...their network may fundamentally change the way people think not only about the Internet but also about television and telephone service. Instead of changing channels and getting stuck with whatever is on, viewers in the future may search for shows in the same way they find Web sites.
Some of Brambleton's residents have already found their own television programming online. Zakir Kahn, 30, has used the Internet to download more than two dozen religious movies.
Ashley D. Campolattaro, 33, a stay-at-home mom, the super-fast connection has become more important than her television or telephone. She uses it to schedule play dates for her children and dinners with neighbors and to check references for babysitters. The Internet has become a lifeline for Campolattaro, particularly on days when caring for her two young sons leaves her feeling isolated from the grown-up world.
Of course the problem is that the reporter had to go to a wealthy "designed" community to find such examples because that is where the fiber currently is; and, as the article makes clear, the majority of fiber to be run soon by corporations like Verizon will also be to compact, wealthy locales where the payoff will be quick and lucrative. Unfortunately, it is not only wealthy stay-at-home moms that are isolated by their day-to-day circumstances; lots of not-so-wealthy moms (and their spouses!) feel the same way.
Should BellSouth actually build a fiber network here (not simply talk about it vaugely) they will, without a doubt, run it first to River Ranch. And only maybe and later to the rest of the town. We've got something better going on here. We're damned lucky.
Baller, drawing on his extensive legal background regarding municipal telecommunications networks remarks on the value of fiber networks, the law, and incumbent strategies. Baller represents LUS and is one of the leaders, perhaps the leader, in the field of telecommuncations law.
The Advocate story that interviews the LUS consultant Doug Dawson, points out a few of the happy consequences of being big:
"LUS' size makes the plan more financially feasible than other communities that have done similar projects, Dawson said.
The reason: economy of scale." Dawson means mostly that one-of-a-kind purchases like backend electronics are spread over more users and that larger purchases in fiber optics, as elsewhere, get a volume discount. True enough.
But that simplest of all demographic advantage over other communities, size, will likely render other benefits as well. Anyone wanting to do a proof-of-concept shakedown for a well-funded consumer-oriented project over broadband will look first to size and for those that want a large sample size Lafayette, as the largest municipal build out of high bandwidth optical fiber will instantly be in the running. Specialty services that anticipate that only 2 to 10% of the population will ever purchase will likewise need a large installed base to make even a trial sensible.
But Lafayette's demographic advantage doesn't stop with size. Lafayette will also be the most diverse city to sport a municipal fiber optic network that makes its services available to every citizen. Most fiber builds are in cities that, lets look at it straight on, are whiter than carrera marble and most often wealthy enough to afford it as well. Wealth and community cohesion have been almost prerequisites for fiber to date. And even when those prerequisites are met a corporate provider does not price fiber cheaply or run it to the poorer parts of town. Lafayette will have a larger percentage of minority and poorer citizens than any community with a comparable broadband infrastructure. Should LUS follow through with its commitments to foster the ownership of inexpensive computers more of the barrier to entry for wide adoption of fiber by all segments of the community will be removed than will be the case in other locale. Lafayette will offer a window into a community which is 25 years ahead of its time in terms of widespread adoption of broadband technology basics.
—The demographic advantages that Lafayette will bring to the table will go far beyond volume discounts on start-up equipment.
Coffee N Fiber-Repeats every Saturday
Coffee N Fiber will be, as usual, at CC's coffee on Johnson. It's an ongoing thing. Good Coffee and Good conversation.
Doug over at LUSFTTH has turned up what appears to be an old Baton Rouge Business Report article from late August. Missed it then but is sure is fun to look over now that our fiber project teeters on the edge of a full committment. It sounds like maybe the capital city is a little envious?
Fiber to the home is gaining momentum first in smaller cities. That's a turnabout from the usual deployment of new technologies, which generally start in denser areas where there's more money to be made before being rolled out to less profitable markets.
Smaller cities like Lafayette are getting fiber because their public utilities, owned by the residents, already have the poles and lines that make it more economical to run fiber... Kind of a nice turnaround, isn't it?
The Lt. Governer of Illinois steps in to back the Fiber for Our Future Initiative.
It's great stuff and applies to our situation as well as to the mess in Illinois. I'll let him speak, he does a good job:
From the Beacon:
Saying he wanted to ensure a "fair fight," Illinois Lt. Gov. PatQuinn came to Geneva Thursday to announce his support for the citizens group Fiber For Our Future and the Tri-Cities broadband referendum on the ballots in Batavia, Geneva and St. Charles on Nov. 2.
Quinn warned voters about expensive direct mail and other advertisements by SBC telling them not to vote for the referendums. Those ads, he said, are paid for with their customer's dollars and don't tell the whole story.
He compared Fiber For Our Future's battle against SBC to the biblical story of David and Goliath.
"The citizens are going against these big Goliaths with all the money, and the Goliaths are going to tell us their way," he said. "Remember who won? We believe in competition in America. If big companies can define the 21st century and say it's only their way, we could end up really getting socked as consumers."
"Instead, trust local officials, trust people who are from the community, trust people who really want to have the kind of wide open competition that our country believes in," he said. From the Daily Herald:
[Quinn] held up a photocopy of one of the direct-mail pieces from SBC and said the companies were going to spend a lot of money to squash the referendum.
The direct-mail piece suggests the referendum question puts taxpayer money at risk, even though in St. Charles and Batavia, the question prohibits the use of tax-backed financing, and in Geneva, the ordinance backing the question does.
"The people who ought to decide the future are the people who live in the community," Quinn said. The venerable Chicago Tribune also runs an informative story but you'll have to register to get at it.
Its always nice when state-level politicians get it. (Lafayette has benefited immensely from the quiet support of Governer Blanco.) This should help the citzen's initiative which has been massively outspent on the publicity front by the phone and cable companies.
If you can help, they can still use the money. Check out the PayPal donation bug on their homepage.
Incumbents Running Scared: An Economic Analysis
One thing that comes through in qoutes from Huval in the [not online] Advertiser Advocate article "LUS plan changes look of telecommunications," and in the feasibility study itself is a pretty steely-eyed determination to out-compete the incumbents on both product and price. The LUS strategy will be simple and competitive: offer more for less. Should LUS do this consisitently, and I have no doubt they can and will, they will be the dominant carrier in their footprint. A footprint, incidently, which Huval hints may expand into the parish. (Mayor Langlinais of Broussard is undoubtably happy to "hear" this said publicly.) This story implicitly raises the question of whether Lafayette will have multiple fiber optic networks in the end. My own thoughts on this are on the record: I believe that it is unlikely. Consider: One thing that LUS' strategy has done is to cut off a retreat into low-end products—analog telephone and video—for both incumbents. LUS' projected equipment buys make it clear that they intend to provide these legacy services indefinitely. LUS has also cut off any attempt to colonize high-end services: LUS' fiber, its committment to advanced services such as Voice Over Internet Protocal and Video on Demand make it clear that there will be no room at the top of the heap for the incumbents to reap special profits off of high-end customers. There will be no uncontested areas of profit for the established incumbents. None. They wil have to decide to compete head to head with an entity that has the trust of local people, that is pumping its profits directly back into the community (in the form of lowered prices, government revenues, local construction, and local jobs), that is offering a superior product in each category, and that is offering it for a lower price. In the face of such daunting competition it has to decide to dump a big chunk of change into a small town (by its lights) ahead of schedule (or face LUS being the established incumbent when it gets around to it). It will have to spend this money anticipating that it will never have the percentage of the market that it enjoys anywhere else it will choose to spend its fiber dollars. In a nutshell: the incumbents will have to choose to invest heavily and early in a place where they can never expect their rate of return to equal what that same investment will garner almost anywhere else. I don't expect them to do it. No matter what they say in the next month or so... it just doesn't make financial sense and that is all they are really about. (Unlike LUS which does have other, community-based values that might well lead them to persevere in a similar circumstance because they value low prices for citizens and the community development consequences.) But, the objection can be raised, "They really expect LUS to fail; they will simply do what private enterprise does and out-compete the governmental body." No. Honestly that won't happen and the incumbents won't believe it unless they've taken to drinking themselves the koolaide they've been offering the public. I know this flows against ideological correctness and may seem counterintuitive but that sort of reasoning substitutes ideology for a dispassionate analysis of what really is---and businesses like those the incumbent have haven't survived by believing their press releases. If you need evidence look no further than the fact that the Cox and BellSouth have so frantically opposed the very idea. They know, they know very well, that once this is built LUS will hold all the cards. LUS will not have to make a profit. Break-even is good enough. It isn't good enough for any private enterprise. Not only that, private companies have to make their money back pretty quickly. They most certainly can't wait twenty five years. LUS can. LUS will stretch it out that long without batting a eyelash. The raw, and terrifying truth is that the competitive advantage that LUS holds over its competition is that it actually cares about its citizen/consumers. It is willing to cut its profit to naught to benefit them. It is willing to wait for a very long time to get its money out--if it benefits them. And that is why the incumbents are running scared. As well they ought. Attribution corrected 10:10 10/22/04 Labels: Advocate, BestOf, Lafayette, Local, Rates
The Advocate's Kevin Blanchard does two follow-up stories on Tuesday's release of LUS' the fiber optic network feasibility study. On the front page of the Acadiana section is " LUS feasibility study shows planned course." On the financial end the story does a quick summary of the plan's take rates, break-even dates, cost categories, and revenue sources. The print version has nice graphic of the projected movement to a positive cash flow by 2011.
More interesting to readers, i suspect, will be the political aspects, with Durel again showing strong support for the idea saying that "There's been overwhelming support for what LUS is doing." and the administration plans to "proceed as fast as we can." On the incumbent side of the equasion Durel dismisses expected opposition:
... anything those companies say now will likely be "smoke and mirrors," ... "After all these months, none of them came forward with a plan, a vision for the future," Durel said. The inside story, "LUS plan changes look of telecommunications," [not online] (with an informative sidebar on the services that LUS will be offering) takes note of the changing landscape of telecommunications in Lafayette, noting Cox's upcoming triple play and BellSouth's changed regulatory status in regard to its established fiber to the curb strategy. The truth of the matter is that both of these strategies have been in the works for a long time and that the difference that LUS' plan might make is chiefly in regard to moving Lafayette to the head of the line for these developments rather than leaving it to its "normal" place way down queue. (On the likelihood of that, more later.)
The Daily Herald, a Tri-Cities region newspaper carries an interesting and useful report that goes a long way to undercut the claims about municipal telecommunications networks that the incumbents everywhere use to try and frighten communities.
Most usefully the article notices that municipal utilities have a very different understanding of what constitutes success than do their corporate rivals:
"But when it comes to defining success, it's clear there's a much different point-of-view between towns such as Glasgow and telecom giants such as SBC and Comcast.
Some of the towns seem far more concerned with building a better community than paying off their debt. They view telecom services as public utilities that can be funded by proceeds from other utilities. And, they believe, without their efforts, residents and local economies would have lost millions of dollars as they sat on the sidelines of the digital revolution." While the story also repeats the canards of the Freedom and Progress Foundation studies without directly contradicting them (canards we attacked in reference to the fiber forum and Bristol, Virginia's system) it does provide a good view into the the way that communities and municipal providers see the story and will allow readers to form a bette
The lead case in the series of case studies in this report was Billy Ray of Glasgow, Kentucky. Billy Ray, readers will recall, was our second interviewee, after Annie Collins of the Tri-Cities. He hits home runs with some of his facts: the Glasgow cable TV utility hasn't raised rates since 1989, with prices remaining at $14.95 for a full complement of digital channels, it now offers 4 megabit-per-second Internet access for about $25 per month, and the difference between average cable rates nationwide and what Glasgow's customers pay for it means that more than $30 million has stayed in the local economy. The Progress and Freedom Foundation may not think that is success but I'd bet that most of the citizen/consumers of Glasgow do.
It's good to see reporters starting to look beyond incumbent propaganda, however dressed up in academic garb, and dig into real cases to uncover some sense of the truth about these issues.
Now if we could just convince the Advertiser to show the same sense of responsibility toward the educational functions of reporting....
Feasibility Plan Media Roundup
The media have posted their digests of LUS's feasibility study. (I posted the basics on the voting date and public forums from last evening's council meeting yesterday) They are worth a pretty careful read. What's new is in the details rather than the basic direction of the proposal.
The new version of the feasibility study has a more realistic breakdown of adoption rates, and target market penetration for various services than the previous draft version released under pressure from Cox. Other interesting tidbits for those who are following closely include hoped-for bond rates, break-even points for the (25 year) bonds, breakdowns on the proportions of the money going to various hardware installations and the like.
At the Advocate: Council sets fiber-optics plan vote At the Advertiser: LUS fiber study released; no fees finalized At LUSFTTH—Doug posts a bit on what to expect in the coming weeks from the opponents. I feel sure that we'll see more disinformation.
Doug also expects FTTH announcements from the incumbents. I doubt it—suggestions that they might, intimations that really they'd already planned to do so, flashy stuff on what they might do if they decided on a wholely different business and technological strategy here than in the rest of their footprint—we might hear about that sort of stuff.
But actual announcements, No, I'd be very surprised. The incumbent strategy if FUD, Fear, Uncertainty and Doubt, and they don't seem to have it 'em to actually compete. Their strategy at every level from the federal to the municipal is to pursue monopoly power and to frighten and mislead anyone who might stand in their way. An example: In my judgment the incumbents nation-wide, with BellSouth leading the way, have just run a number on Chairman Powell and the FCC. They've crawfished out of previous deals they'd made to allow access to competitors in order to get into the long distance market by holding the threat of not running fiber to the home over the FCC. Powell caved on that, giving in to both to the demand to cut competitors off their system and to giving FTTH regulatory status to mere fiber to the curb, in effect subsidizing BellSouth's current strategy without requiring them to give up anything or speed up deployment at all. Craven. The FCC is supposed to be the one running the show on our behalf—not acting as agents for the monopolies they are supposed to regulate. We need some new commissioners and with any luck we'll get that soon.
The outrageous incumbent campaign in the Tri-Cities continues. You ought to take a little trip over to the Fiber For Our Future website for a vision of just how dirty telecom and cableco's can fight when they get a chance.
The incumbents have poured money into a fear-based public relations fight to shut down a referendum that would allow locals to seek private funding to build a pooled municipal utility. If the funding cannot be found the build will simply not occur.
The basic issue of truth in advertising aside, at least the fiber for our future folks have got to have the advantage on the basis of design sense. You really ought to take a look at t he latest mailer. The designer should be taken out back and given a stern talking-to.
Of course its pretty easy to lie to the public and generate unwarranted fear when the opposition has about 3,000 dollars to oppose a corporate blizzard of glossy mailers, daily full-page newspaper ads, and push polls. On the other hand the good guys' big media buy has been a clutch of yard signs. Geez...you can give to the cause via PayPal at the Tri-Cities Broadband home—and get a chance to look at their full gallery of incumbent misinformation.
Mark your Calendars
The city-parish council and the LPUA have set a date, tentatively, for a vote on adopting LUS' fiber-optic feasibility study: November 16th.
The feasibility study, received from the Competitive Communications Group, will be discussed on both the 9th and the 16th. The statement read at the council emphasized that the procedure was to designed to conform to Act 736 the inaptly named, Local Government Fair Competition Act. You can look to the Act 736 for information about what the feasibility study must cover as well as what it need not reveal ("commercially sensitive marketing information.")
All signs are that the feasibility study will handily be adopted by the council but that will hardly be the end of the matter. If history in other locales is any guide—and it certainly has been to date—the incumbent providers will attempt any delaying tactics they can muster with legal entanglements being the tool that comes easiest to hand.
Cox Enterprises announced today that it reached an agreement with its once and future wholly-owned subsidiary Cox Communications and will buy the outstanding shares of the cable company for $8.5 billion.
As the story says, the new price ($34.75) is about 8.6 percent higher than the original offer Cox made to Cox of $32 per share. The deal is expected to close by mid-December, at which point getting information about the internals of Cox Communications will become almost as difficult as getting unpleasant facts heard at a Bush/Cheney cabinet meeting.
This story has some interesting facts about the debt incurred by this deal.
For those of you keeping score at home, the higher price per share of the Cox offer to Cox is $600 million higher than the original offer of $7.9 billion. In local terms, that's the cost of five or six proposed LUS fiber to the home projects, depending on the final plan.
Put in perspective, it means that the Cox family prefers to paying off shareholders instead of investing in the future of this community. That was made clear by the original offer. The sweetened deal means that the family is at least five times more interested in unfettered control of the cable company than they are in the economic viability of this community. Or, Cox would rather spend an extra $600,000,000 buying paper than investing in fiber in Lafayette and a few other Louisiana communities where it provides cable services.
An editorial in the Advertiser lauds the fiber backbone, citing its use in video-based court proceeding that increase security and save money.
Hey, the Advertiser takes a principled position on the burning issue of fiber optics....
Its hard to know what to say about such tepid, safe editorializing. There's a real fiber issue out there for the Advertiser to deal with and they seem unable to see what is obvious to both the public and its elected leadership: that competition is good, and that LUS' fiber optic network will benefit the community as a whole.
We've got three newspapers in Lafayette; two are owned by a large out of state news corporation and one is locally owned. Guess which one has endorsed a fiber optic network.
The Advocate has a breaking news story, Cox Communiations offers phone service, that reports that Cox will begin offering VOIP to its Baton Rouge customers tomorrow, Tuesday the 19th. They are straightforwardly targeting BellSouth and offering their new service at a 10 percent discount BellSouth prices. There is a discount as well for buying into their "triple play" of VOIP, digital cable, and internet.
Announcements in other venues ( CNET, internetnews.com) promise that VOIP will be coming to Lafayette, among other locales, in November or before the end of the year.
Cox is throwing down the gauntlet. If Cox's new service makes significant inroads BellSouth has nothing to respond with but price cuts of its own. It ought to be fun to watch.
UPDATE 6:00 am, 10/19/04: The final version of the story has appeared online and it contains further details of the plans being offered by Cox and a response from EATEL. In Ascension parish Cox will be going head to head with EATEL's new fiber to the home service-based version of the triple play. The locally-owned telephone company will be putting its service into operation early in the coming year.
Lisa Froman, spokeswoman for Eatel, said the Gonzales-based telecommunications company is headed in the same direction with so-called "triple play" service of phone, Internet and television service...
"This whole bundling idea is going to be very important to us in the future," she said.
Froman said Eatel is not building its fiber network outside Ascension "just yet."
While Eatel is not going after new telephone customers in East Baton Rouge Parish, when it entered the market it undercut BellSouth's prices by about 20 percent.
A BellSouth spokesman could not be reached for comment. All very interesting. Especially the implicit threat from EATEL to build it fiber beyond its home in Ascension parish.
An earlier Advocate story also hinted at EATEL's long-term plans:
Eatel's plan is to eventually connect all of its Louisiana and southern Mississippi customers by fiber optics, which Ahern said will be the platform for the next half-century.
"Over the last 130 years, telephone companies have relied on copper, and we've spent a lot of money trying to make that copper do more. So, we can provide DSL service over copper today," he said. "Now we've decided it would be better to provide fiber to the home and let that take us out for the next 40 to 50 years.
All of this can only be good for consumers.
Going Offline for Online News
Its gotta be some sorta obscure irony that the most interesting, in-depth Lafayette stories on broadband and LUS' fiber optic network are pretty much unavailable online.
Get thee to your corner restaurant, local convenience store or favorite coffee shop and pick up the latest Independent for a really worthwhile story and two substantial sidebars. An embaressment of riches for your local fiber digester.
The base article gives the story the space it needs and runs the gamut from potential revenue for the city to development possibilities to glimpses into the technical issues.
What is most interesting, and most valuable is the slowly emerging details of the project rollout and probable implementation. Its heartening to hear LUS opening up a bit. We learn, for instance, of an initial roll-out of 40 million intended to limit the financial risk by testing the take rates with real subscribers. We discover that the system will be "capable of" 40 megs down and 20 up, that out-of-state contractors are already swarming off the Interstate and down Evangeline Thruway, that roughly half of the outlay will be in labor, a bit more about contentious digital divide issues, and that competition in cable has resulted in rates 15 to 41 lower than in areas (like ours) without real competition. There's more but you'll have to ferret out your own copy.
There's a meaty sidebar on EATEL being slowly forced out of the local market by FCC rulings (a point made here--and repeatedly) and BellSouth's determination to shut others out of the last mile connection to the home. It gives readers enough background for them to begin to understand why line leasing was initially mandated and what the feds are retreating on when they turn the monopoly back over to the inheritors of Ma Bell. The story also hints at what the community might be losing in terms of support of community activities by the retreat of EATEL to its home base to build its own fiber network.
A little stranger is the "Lafayette Unplugged" sidebar which gingerly takes a look at the noticably insubstantial claims by a local man that he intends to build a wifi network to cover 50 square miles inside the city. More credibly, but less positively, it also cites Terry Huval saying how easy it would be for LUS to add a wireless net to the fiber build. (Shades of my quintuple play fantasy.) LUS making a wireless play makes a lot more sense as I see it. And I want my VOIP phone on top of that.
Consumers Union has issued a blistering indictment of the recent FCC regulations change that further accelerated the recent trend toward closing the Bell networks to competition saying:
The FCC today took our country one giant step closer toward solidifying a two-company domination – the local cable and telephone providers -- over the consumer Internet market
The policy of promoting high-cost broadband access dominated by cable and telephone companies who are allowed to discriminate against competitors and overcharge consumers is not working...The evidence that this approach has failed is overwhelmingly clear • In the three and a half years that Michael Powell has been Chairman of the Commission, the U.S. had fallen from third to eleventh in broadband adoption.
• The cause of the failure of high speed adoption is clear, Americans are being overcharged by the cozy duopoly of cable and telephone companies. Cross national comparisons of price show that Americans pay fifteen to ten times as much, on a megabit basis, as consumers in Japan pay. Three years ago the price in America was three or four times as high.
The current fracas here in Lafayette makes it easy to see what Consumers Union is talking about: when it comes down to it Cox and BellSouth are quick to ally up to prevent real competition from entering the fray. And real competition is defined as anything that would really drive down the price of telecom services.
Coffee N Fiber: Time N Place (N Topic?)
The Coffee N Fiber meeting will be held at CC's coffee on Johnston (near College) Saturday at 10:00 am.
The topic of the day is all too obvious given today's breaking news: What about that BellSouth? Will this new FCC ruling really make a difference? Hey, where is Cox in all this? Could Lafayette end up with three fiber networks? Would that be desireable? Possible?
And if we don't find that all that interesting (hah!) we could always talk about what sorts of new services could be developed if we had pretty much unlimited in-system bandwidth. (But metered outbound and inbound to system speeds.) The limit on giving us all big pipe bandwidth seems to be the cost of backhaul. But that wouldn't apply in-system...
Be there or...
BellSouth's little bit of handwaving: An Analysis
A set of stories in the Advocate and the Advertiser preempts a blog article analyzing the new FCC ruling I was just working on. The Advocate story: Ruling opens door to BellSouth and the Advertisers': BellSouth broadband just got easier will no doubt really roil the waters on LUS' fiber optic plan.
Here's the exciting lead paragraph in the Advocate's version:
A Thursday ruling by the Federal Communications Commission will open the door for BellSouth to begin building out its fiber-optics system in Lafayette, a BellSouth spokesman said.
And here's the more mundane facts of the matter:
It doesn't make any difference at all.
And the authors of those articles ought to be in a position to see why.
That lead paragraph is actually pretty misleading, and only technically true, as the following paragraph makes clear: Mr. Williams is speaking hypothetically, and really about all of BellSouth's enourmous geographic area. There isn't anything special about Lafayette (nor is there likely to be).
The back story is that the FCC, pretty cravenly in this writer's judgment, extended the regulatory relief intended for fiber to the home projects to fiber to the "curb" projects. BellSouth and the other baby bell operating companies won't have to share their lines with the likes of EATEL or ATT if they can get their fiber closeto homes and businesses and divide it up between users over copper and pretend it's as good as a real fiber to the home connection. Nonsense. Of course the FCC had already effectively let BellSouth run companies like that off their lines by allowing them to raise their lease prices so high that such companies could not compete. Competition is already all but dead. So its hard to see just how much difference this makes practically speaking.
No, as far as I can tell, it changes exactly nothing in regard to building a fiber to the home network in Lafayette. No one but LUS is offering to do to build Lafayette a modern fiber to the home system. BellSouth is not announcing a build in Lafayette—or anywhere actually. I don't expect them to. This decision was widely anticipated and SBC used the opportunity to announce a speedup in its fiber build out. BellSouth is noticeably silent. Mike calls the sort of noise we hear from Williams in the Advocate story the roar of the cowardly lion. He's dead on.
Cox's hybrid system is already in place and is already tightly closed to competition. You'll notice that not having to open their networks to competition has not led Cox and other cablecos to develop fiber to the home systems. No, the FCC is being a bit disingenious about this. They actually hope to encourage competition between networks (rather than within the current phone network via leasing) and to give the Bells additional incentive to catch up in a race they are losing.
Cox remains the more likely candidate to provide real head-to-head competition with LUS. BellSouth's tactical disadvantage vis-a-vis Cox remains. BellSouth wants to shut out the competition as tightly as Cox does and now they can but that has not resulted in Cox building an all-fiber, modern network here or elsewhere. And it will be even less likely to result in BellSouth doing so.
Happily, if the remarks by LUS and city-parish officials are any evidence, they recognize this.
Their serene response is justified: Nothing has changed.
Let's hope the council is equally difficult to stampede.
BellSouth's regional spokesperson in Lafayette was apparently channeling actor Bert Larh in his beloved role as the Cowardly Lion in the Wizard of Oz on Thursday. Huffing and puffing about how a recent FCC ruling cleared the way for BellSouth and other incumbent carriers to build their fiber networks without having to afford access to those networks to their competitors, the spokesperson tried to make it sound like Lafayette streets would any day now be clogged with trenchers from his company burying fiber optic lines in every neighborhood in town.
Making an exceptionally vague claim about the company's policy to roll out fiber to the curb technology throughout its system without citing any kind of time frame for what would be a massively expensive project in BellSouth's nine-state service area John Williams gave the Baton Rouge Advocate the impression that this FCC decision make a BellSouth fiber rollout in Lafayette is imminent.
Uh, not likely.
The second paragraph of the story is the doozy that must be parsed in order to appreciate the deception that rests at the heart of this BellSouth statement.
Here it is:
BellSouth will start working toward a fiber-to-the-curb network in all its regions, including Lafayette, BellSouth Regional Manager John C. Williams said Thursday. The operative phrase here is "will start working toward." It is worth noting that since passage of the Telecommunications Act of 1996, BellSouth and the other regional Bell operating companies have been working towards a long list of goals and objectives for their system. BellSouth is a big system. Nothing happens overnight.
Don't give up hope in the boys from Atlanta: Lafayette will one day be among those markets that BellSouth will see fit to bless with the kind of infrastructure that will be an asset to this community in an economic development sense. Of course, by that time, the comparative advantage that such an infrastructure might have brought here will have been diluted due to its prevalence elsewhere.
BellSouth recently sold off revenue producing assets and borrowed billions of dollars to help finance its share of the cost of Cingular's buyout of AT&T Wireless. SBC, BellSouth's partner in Cingular, announced a $6 billion fiber optic initiative when the appellate court first ruled in support of the RBOCs' ability to exclude competitors from new fiber networks. BellSouth has yet to announce such a plan for its system and no dollar figure has ever been mentioned. With them all worked up about LUS plans to invest a little more than $100 million in a fiber network here, it's hard to imagine where BellSouth will get the resources to undertake so massive a project across its entire service area.
Declaring intent is a long way from delivering on that intent.
The central change that the Telecommunications Act of 1996 drove through the telecom industry was to allow carriers like BellSouth and others to invest their dollars where ever they saw fit. That meant, they were unshackled from the need to offer uniform services at similar prices to all of its customers, regardless of location. This was the heart of the Universal Service doctrine. Prior to deregulation, BellSouth had to offer the same services in Mamou that it offered in New Orleans and at roughly similar rates. No more. The result? A little thing known as the Digital Divide.
That is, by allowing the RBOCs to invest their dollars where they could make the best return on their investments, telecom investment dollars naturally gravitated towards the large metro regions which, as a result, got new services first. Smaller communities got those services later if at all. The playing field is no longer level.
The court decision to allow the RBOCs to exclude competitors from their new fiber networks did not reinstate the service equivalence requirement, so there is no reason to suspect that Lafayette has moved any further up the BellSouth hierarchy of priorities than it was prior to the U.S. Supreme Court's decision last week to uphold that right to exclude.
So, BellSouth's spokesperson is attempting a slight of hand here by implying that, because BellSouth intends to one day have fiber to the curb technology be its dominant infrastructure, it will soon be burying glass strands in a neighborhood near you. At best, a BellSouth initiative in Lafayette is several layers of metro markets down from approaching top priority in its nine-state service area.
The one shot that BellSouth does have of making its spokesman's prediction of BellSouth going fiber-to-fiber with LUS would be for the company to engage in delaying and stalling tactics such as lawsuits and regulatory challenges to the LUS plan. Those tactics will come and they will work for a while, but even delays of that length will not be enough to enable BellSouth's corporate bean counters to figure a way to leap frog a Lafayette initiative ahead of those in more densly-populated (read that " lucrative") metro markets in that nine-state footprint.
Put a detailed Lafayette fiber plan on the table with a price tag, a construction schedule attached, then, commit to it, BellSouth! Otherwise, this kind of "let me at 'em" posturing rings every bit as hollow in Lafayette today as they did when the Cowardly Lion used it in Oz.
The Ascension Citizen carries news that EATEL's franchise for east Ascension (the parish is split by the Mississippi) is moving forward at an expedited pace. The Cable TV franchise will use the fiber optic network that EATEL is in the midst of installing.
EATEL's entry into the market will make East Ascension one of the very rare places to actually have real head-to-head cable competition. Lafayette is hoping to join Ascension parish in this competitive situation.
Interestingly Cox's franchise agreement is not moving forward. Cox and the parish have been in "negot |
