Hey Legislator: State Video Doesn't Work!

It's considered wise to learn from the experience of others.

Sadly, State Legislators—or at least our state legislators—fail to follow that simple maxim. If they did Louisiana would not be even considering state legislation yanking local communities' ability to manage their own rights of way down roads and drainage as the community sees fit. Instead the state is about to pass laws shifting that power to the state legislature and and their "plan" is to then hand that control over to the corporations that are lobbying for the change.

They call it "Consumer Choice for Television Act" and that is a serious misnomer. The name is supposed to indicate that the law will encourage AT&T to offer competition to the cable companies. That is what AT&T, who wrote the thing, says it will do. Some of the legislators voting for it (though you can bet none of those who sponsored it) might even think that is more or less true. But based on the evidence it will not.

That's what they've found out in North Carolina. The story there tells the results of a similar law in North Carolina, Video Services Choice Act. North Carolina, like Louisiana is a smaller, southern, rural state that has been trying to upgrade its image and technological prowess. I'd argue that it has been considerably more successful. Even so the demographics aren't all that different from Louisiana. A major city or two, a handful of second-tier cities (among which are the more progressive) and a large rural population. It's a good state to compare to Louisiana.

And North Carolina passed a law like this two years ago—at the time when a similar law was (wisely) vetoed by then-governor Blanco. Here's what the article says about the success of that law in North Carolina.

When state legislators passed the Video Services Choice Act (VSCA) two years ago, their goal was to increase competition....One of the few things legislators asked of those companies was to keep setting aside space for public access, education and government channels....

But laws often have unintended consequences, while their intended consequences can fail to materialize.

In fact, nearly 18 months after the VSCA was enacted, neither AT&T nor Verizon has submitted a single application to provide video service in North Carolina. Of the 118 new state franchises, almost all were submitted by Time Warner; only two new providers have entered the market; and only one service area has any competition.

Meanwhile, many PEG channels have seen their funding evaporate under the new law.

Here is what the experience of North Carolina should teach our legislature:

1. Two years after AT&T got the law it sought to "bring competition" it has not brought any competition to that state or to the incumbent cable company.
2. The dominant cable company and target of hoped-for competition, Time Warner, was in fact the real beneficiary of AT&T's law and used it get out of contractual obligations to local communities in most of the 118 state franchises actually issued.
   
3. The law has had real negative effects: The state legislature's attempt to protect local interests in PEG channels like Lafayette's Acadiana Open Channel (AOC) failed. Had local control been maintained that would not have been a problem.
   

In short: In North Carolina this law has completely failed to bring AT&T into quick competition with Time Warner in the two years since it was enacted. In truth all it has done is to allow Time Warner to escape its local responsibilities.

State video "reform" is nothing of the sort.

Against the Grain

With the country sinking into a recession and the housing market collapsing nationwide it is somewhat comforting that Louisiana is going against the grain.

Loren Scott, the media's go-to economist from LSU, predicts a continued strong economy and particularly a strong housing market in Lafayette according to an article penned by a local realtor in today's Advertiser.

What did Scott say specifically about Acadiana? He noted many positive indicators including a low unemployment rate, a strong oil patch, a large number of building projects, LUS fiber system, hospital expansions, Acadian Ambulance expansion, Dynamic Industries contracts and discovery of more oil in the Gulf. In other words, Acadiana has a vibrant economy and an excellent housing market. They are predicted to remain strong for the next two years. (emphasis mine)

What's interesting in the context of this site is that the LUS FTTH network has already graduated from a gee-whiz, that-would-be-neat-if-they-get-it status to an accepted, off-hand element in a list of strengths for the region.

Here's to hoping that the lower prices, an amazingly advanced product, and better service that LUS Fiber are bringing will do its part in keeping the wolf from the door locally.

New Orleans' Wi-Fi Gone

It'sa gone pecan....or less colloquially and jocularly: sic transit gloria.

New Orleans' Earthlink WiFi network, launched with much fanfare as the leading edge of public-private partnership in muni networking in the days after Katrina is gone--completely. As Earthlink abandons its network of city-wide wireless networks New Orleans will not be left with even the truncated, city-services-only networks of Corpus Christi or Milpitas, Calif. In those cities Earthlink was able to give the networks to the city and cut its loses. But in New Orleans neither the city nor anyone else apparently was willing to take it. Earthlink will remove its networking equipment as it folds shop in the Big Easy.

This is the last whimper of a story that started out bravely. One of the shining moments of New Orleans municipal government after the storm (and there were shining moments) was the way it hacked together a working telecommunications system in the hours after the storm passed through by quickly repurposing a network of wifi connected cameras to serve basic police, fire, and emergency communications—long before BellSouth (now AT&T) began to get itself back together.

As the city stumbled to its feet it announced that it would use that network, expanded by volunteer workers and donated equipment, to provide basic voice and data communications for its citizens who BellSouth and Cox admitted would be without phone and data service for many months. (At right a Washington Post graphic from a story showing the core of the city unserved three months after Katrina.) For several months battered New Orleans could proudly claim to own North America's only big-city wifi cloud. BellSouth and Cox ignobly objected, using as a basis Louisiana's (un)Fair Competition Act; a law that BellSouth had recently pushed through the state legislature in an attempt to first prevent and then to at least cripple Lafayette's plan to build a fiber optic network. (A plan which has since come to fruition.) The incumbents demanded that the city jump through a series of legal hoops meant to make it all but impossible to build community-owned telecommunications networks and, in any case, to delay ones progress indefinitely. New Orleans, lead by a former Cox executive, bravely refused to be cowed, cited emergency exemptions, and—backed by Governor Blanco—continued to provide the basic services private corporations were unable to quickly restore to the community.

BellSouth and Cox eventually, of course, got their way when emergency regulations expired and the Louisiana legislature refused to reform the law in light of post-Katrina realities. New Orleans turned its community-owned network over to Earthlink who had entered the municipal market aggressively. But then the public-private muni network bubble burst when the limitations of wireless networks in general and WiFi networks in particular became obvious.

The only large muni network still standing is, as far as I know, Minneapolis'. There the city owns the network and provides substantial anchor tenant fees to the locally-based operator and builder who, in exchange for a long exclusive lease shouldered the expense of construction. (Interestingly for close watchers of Lafayette's network, the city started with a substantial fiber ring and factored in an extensive expansion of that fiber network as part of the bid specs for building the wireless network. Minneapolis owns a fiber backhaul backbone for its network--which may well be part of the explanation for its generally acknowledged above-par network performance.) Retaining ownership of the network was not a path open to New Orleans as BellSouth's law forced an outright sale. For the same reason, New Orleans could not take the network back and run it or and lease it to a private provider as Minneapolis has successfully done. We'll have to see if the lack of municipal competition will result in the bevy of new services for New Orleans and Cox and AT&T have claimed would result from eliminating "unfair" municipal competition or whether, just perhaps, places like East Ascension parish and Lafayette where small local providers --public and private-- are going up against the big boys are the places where good deals and new services are rolled out first. Anyone want to bet on whose populace actually gets the better deal?

The last act for New Orleans brave WiFi experiment has now played out. In substantial part it ran aground on the implacable opposition of Cox/AT&T, the irresponsibility of the state legislature, and the poor business planning of Earthlink. Sic transit gloria

AT&T, Cox: Our favorite flavor is Cherry/Red

This week's edition of the Baton Rouge Business Report contains an informative story about the spirited battle that EATEL is waging against Cox on the eastern edge of the privately-held cable giant's central Louisiana market footprint.

One comment that immediately jumped out was that the competition between EATEL (with its superior fiber network) and Cox (with its very deep corporate pockets) has prompted an in-your-face element of competition that neither the locally-owned phone company (EATEL) nor the Atlanta-based cable company (Cox) is accustomed to using:

Brad Supple, the director of sales and marketing with EATEL, says the ads represent the first time they’ve countered the competition in such an aggressive fashion. Cox says it’s a first for them, too; the companies have battled for customers for nearly three years.

EATEL's most aggressive move (detailed in the BRBR article) was the running of ads in Lafayette informing Cox customers here about the special bargain rates Cox was trying to limit to the market in east Ascension Parish, where it competes head-to-head with EATEL.

The ad has been discussed here before, but there is news in the article and it deals with the flavors of the video franchise bills up for consideration in the current session of the Louisiana Legislature.

For starters, it quotes Cheryl McCormick of the Louisiana Cable and Telecommunications Association (LCTA) for noting that one of the three bills up this session dealing with video is actually the LCTA's bill (HB 869); the other two (House Bill 1009 and Senate Bill 422) are AT&T's bills and would create the statewide video franchise.

The real news, however, comes from a woman who once held McCormick's job but now works as Cox's vice president of government and public affairs, Sharon Kleinpeter. Commenting on AT&T's push for passage of statewide video franchise legislation here, Kleinpeter confirmed a point made here recently — specifically, AT&T and the state's largest cable provider are engaged in a carefully choreographed effort to relieve both elements of this communications duopoly from current legal requirements to serve all segments of the communities where local franchise agreements now exist.

Here's the money passage:

While AT&T’s earlier efforts to get statewide authority have failed, Kleinpeter says Cox doesn’t oppose it as long as it can also get options that would free the company from 55 20-year and 30-year franchises it has in 13 parishes, which have more stringent provisions. So far, AT&T hasn’t agreed to the move, which she says would otherwise give Cox a competitive advantage. Talks are under way on this issue.

This is the Cherry/Red flavor of regulation they love.

That is, both AT&T and Cox (and other Louisiana cable providers) want the ability to provide services only in those neighborhoods where they believe they can make the highest rate of return and not have to provide services, say, all over Lafayette Parish as would be the case under the terms of the current franchise agreement here (and in, the article says, 55 other parts of the state).

They want to be able to legally cherry pick what they consider the best neighborhoods and legally redline those that they want to ignore. Thus, Cherry/Red.

Stunts, Scams & Sirens

The recent — but thus far not detailed — franchise agreement the AT&T signed with Baton Rouge is a public relations stunt, coming as it did on the heels of the recently-announced Cox rate increase. If the statewide video franchise legislation passes, the Baton Rouge/AT&T agreement will be meaningless. The statewide video franchise legislation would lift all local requirements included in that mysterious document before any of it took effect — and, I'll wager, before AT&T spends a penny on new services in the Baton Rouge market.

This clever dance that these two corporate giants are staging for us is an elaborate flim-flam. The fact is that this legislation will not bring new competition to Louisiana. How do we know this? Because similar legislation has not brought competition to Texas, North Carolina or Ohio.

But, the Louisiana version of this legislation will do long term damage to at least the 55 communities with franchise agreements by allowing companies like Cox and AT&T to discriminate against low- and middle-income neighborhoods in the delivery of modern network services. For that reason it is particularly disheartening to see the head of the Louisiana chapter of the NAACP fall for the competition scam at the heart of this legislation.

The Louisiana Legislature is being bamboozled by AT&T and the big cable companies which are acting in concert to get legal permission to leave significant portions of this state on the far side of the digital divide. "Competition" is a sirens' call that is only being used to convince our tech-illiterate legislators to sell out the hopes and aspirations of Louisiana citizens and communities to become full participants in the network-dependent global economy.

This legislation serves no other interests but those of the phone and cable companies. It is terrible policy for Louisiana citizens, consumers and communities. Rate relief will not come, but a widened gap between the tech haves and have-nots will.

Count on it.

ALERT: Call or Email Your Legislators

Please begin the process of defending Louisina's local communities by calling or emailing your legislators with your objections to the "Consumer Choice Television Act." It is lousy law intended to benefit a single large, out-of-state corporation whose burden falls especially hard on Lafayette and small communities across the state. This will be a long fight in our legislature with the opening shot fired tomorrow during the Senate Commerce committee's initial hearing.

The Story:
The Louisiana Legislature is about to make a mistake....one the state avoided in 2006 when a smilar law was rejected a law that was also supposed to promote cable competition. That year a similar bill became law in North Carolina. The effects have been disastrous.

Back in '06 BellSouth, already in the midst of being sold to AT&T, lobbied hard for a bill that would have moved control of the rights-of-way that belong to local communities to the Louisiana legislature. AT&T told legislators that they were so eager to bring competition to the cable industry that they needed the legislators in Baton Rouge to relieve them of the "burden" of negotiating contracts with local communities to use the public's property for their new business. They assured the legislators that their law would would not hurt customers or communities but would instead provide wholesome competition.

That year the law was turned back in Louisiana. But succeeded in North Carolina. The Tar Heel's experience tells us that North Carolina did NOT get more competition. Two years later AT&T has still not applied for a single state-wide video franchise. Just as in Louisiana, prices continue to rise and no new cable service was deployed by the phone companies in rural parishes. But it did make a difference in NC--just not the difference AT&T lobbyists told legislatures it would make. Though AT&T did not use their law to get into the cable business the cable companies used them to get out of their contracts with local communities--117 at last count had switched to the state franchise that was more "generous" with the rental of local communities' land.

The state collected only 62% of the rental that corporations had formerly paid local governments for the use of public land. That shortfall in revenue had to be made up locally. In spite of lobbyist promises PEG channels (like Acadiana Open Channel) were no longer fully supported. Without a local contract citizens with a complaint were told they should talk to the secretary of state--or sue some of the nation's largest corporations.

Lafayette is the largest city in the state of Louisiana that will be effected by this law. New Orlean's, Baton Rouge, Alexandria, Shreveport, and Lake Charles will all retain their rights to control their own property. Only the smallest communities — and Lafayette — are being asked to take this risk to placate a corporation which, frankly, does not need give-aways from the state of Louisiana to profitably conduct its business.

North Carolina's legislature got taken and the customers and communities of the state bore the brunt of that mistake. Please spend a moment to encourage your senators and representatives not to follow in that path. The first hearing (but not the last!) on this bill is scheduled for tomorrow. A quick phone call to the office to leave a message or an email to your legislator will let them know the public is waking to the problem.


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How To:
Your most effective contacts are always your own legislators. They represent YOU and generally do listen to constituent voices.

To find your legislator, email, and phone number jump to the legislative search page; enter your address and use the resulting links to jump to your Louisiana House and Senate representatives.

Also:
Consider letting the senators and house members who will recommend or not recommend this bill to their colleagues know your opinion of this legislation.

The Senate Commerce Committee’s members are – Sens. Duplessis (chair), Crowe (vice chair), Alario, Nick Gautreaux, Marionneaux, Michot, (Lafayette) and Scalise. The Senate switchboard is (225) 342-2040.

The House Commerce Committee—
Arnold, Jeffery "Jeff" J. Chairman
Waddell, Wayne Vice Chair
Badon, Bobby G. Lafayette Member
Hardy, Rickey Lafayette Member

The interest of communities in Louisiana and the interest of huge telecommunications monopolies are not the same and our legislators should be encouraged to vote in their constituents interests, not the interests of a single company that would rather change the rules than play by them.

Video franchise bills all take; where's the give?

The statewide video franchise bills up for consideration in the Louisiana Legislature are, in fact, bad news as John and the LMA (pdf) have made clear. But, based on the 2006 experience where only Governor Blanco's veto prevented a version of this legislation from becoming law, I also believe it is clear that some form of this legislation is going to pass again this year and Governor Jindal will sign it into law.

First, let's make clear that while AT&T is the prime mover of this legislation, the cable industry is on board. That's because this legislation or a subsequent package will ultimately give cable companies the same freedom to cherry-pick and red-line neighborhoods that the phone company is seeking with these bills. They'll demand a level playing field.

It was no accident that Cox Communications announced its latest rate increase just as the Legislature was heading into its Regular Session. That enabled the various astroturf movements to begin flooding newspaper editorial pages with letters to the editor, condemning the cable companies and singing the praises of competition.

Think of this as a choreographed fight for the benefit of the viewing audience, rather than a brawl. The cable companies and AT&T are partners in this dance. Cox stepped on a lot of consumer toes in order to make them receptive to the competition paeans that the phone company allies would produce.

Cherry/Red

That ability to selectively deploy new network technology is the heart of the issue.

How do I know this? Because John and I sat in on the 2006 negotiations on that year's version of these bills when the phone company (still called BellSouth at the time) flatly refused to deal on offers that did not free them from community-wide build-out obligations.

What does this mean for communities? It means, for starters, that the State of Louisiana will become the official enforcer of the digital divide in our state; that is, enforcing that divide will become official state policy codified in the law.

Under current law, local governments have been able to require community-wide build-outs in their negotiations over franchise agreements. Under the three bills being offered in this session to create the statewide franchise, there will be no community-wide build out obligation.

That means that AT&T (but more likely, cable companies) will be able to deploy their new network technologies only in those neighborhoods that they believe will be most receptive to using it. Yes, I think cable companies will be the primary beneficiaries of this legislation because AT&T is not going to be making huge new infrastructure investments in Louisiana. They are carrying a heavy debt burden now and expecting things to slow down as the national economy moves into recession.

But, cable companies are already pretty well deployed across the state. Look for them to work to amend the legislation to allow them to selectively deploy new network technology in the communities where they are already in business under existing local franchise agreements. This will be a particularly attractive path for companies like SuddenLink that bought older networks in slower growth markets from Cox (Lake Charles and Alexandria among them) shortly after the Atlanta-based media company went private.

Consumers As Shields

AT&T and its allies are using the well-being of Louisiana consumers as the poster children for their argument to be relieved of the onerous burden of local franchise agreements. But, those are crocodile tears. In fact, most consumers will be losers as a result of this legislation.

How so?

It flows from the freedom phone and cable companies will have to bypass those neighborhoods that they deem not sufficiently attractive to them to warrant their network investments. When the insurance industry did this, it was called red-lining. When only the best neighborhoods are targeted, it is cherry picking. It is the preferred corporate way.

The fact is that there is no commonality of interest between these companies and most Louisiana citizens — or, for that matter, the best interests of the state. AT&T, Cox and others are focused on return on investments. Which is all fine and good for their stockholders. It is the American way.

But, there is a divergence of interests between the profit motives of those companies and the best interests of communities, particularly when it comes to the issue of access to modern network technologies. Access to those technologies is essential for the economic success of individuals, businesses and communities. With the video franchise legislation, the Legislature will be saying to the phone and cable companies that it is just fine with them if those companies want to exclude certain neighborhoods and communities from access to these technologies.

Combined with the burdens and limitations imposed on communities to act in their own interests on the matter of network technologies via the Municipal Fair Competition Act of 2004, the Legislature (and presumably Governor Jindal) will be handing over control of the economic fates of communities and neighborhoods to companies like AT&T, Cox, SuddenLink and others.

Where on the hierarchy of priorities — for investment, for deployment of new technologies, etc. — of those companies does the fate of those communities rank? With the limits placed by the so-called Fair Competition Act, this is a vital question because communities will have little or no recourse to the decisions that these companies make on matters about access to advanced to technologies.


Where's the 'Give'?

The statewide video franchise legislation would give the phone and cable companies everything they want. What are they giving up in exchange for this largess? So, far, nothing.

Recognizing the political reality that a few hundred dollars in campaign finance contributions from the phone company buys a lifetime of loyalty from legislators, I don't believe there's much chance to defeat this legislation. Some form of a statewide video franchise will emerge from this session and Governor Jindal will sign it.

Viewed from that perspective, what can communities take away from this battle? As matters stand, there is nothing in this legislation that benefits communities. As the record in North Carolina shows, consumers are not going to get benefits of competition that is, supposedly, at the heart of this stuff.

Legislators need to take their eyes off the corporations for just a few minutes and think about their constituents. The statewide video franchise will consign some number of citizens — primarily in middle and low income neighborhoods, to second class digital citizenship by relieve phone and cable companies of the obligation to include those neighborhoods in their new network build-outs.

This is a public policy disaster in the making that runs against the efforts of the state to upgrade the quality of the workforce here. The network tools needed for workers to fully participate in the connected workplace and the global economy will not be available to every one, only instead of a market failure, it will be the direct result of public policy.


The Fairness Doctrine

There is a way to lessen the negative impact of the statewide video franchise legislation. That would be to restore to communities the right to act in their own self interests in matters of network technology access.

That is, those interested in closing instead of widening the digital divide in Louisiana should move to amend this legislation to include a repeal of the Municipal Fair Competition Act of 2004.

The logic of this is rooted in the points made earlier: the interests of the phone and cable companies are separate and distinct from the interests of communities and, indeed, the state.

The only entities that are obligated to act in the interest of all citizens in communities are local governments.
As Lafayette has demonstrated, local governments have the technological skills and the financial means to act in their own self interests in the arena of network technology. LUS is in the process of deploying its fiber network now. By the end of the year customers will be able to sign up to get levels of network services that no other community in the state — and only a handful in the country — will be able to access.

Other local governments must have the freedom to act in the interests of their own citizens rather than be forced to stand idly by as these network builders shunt aside the interests and aspirations of large segments of their citizens.

The Municipal Fair Competition Act is a relic of a soon-to-be bygone era when phone and cable companies proclaimed that they sought to serve entire communities. Local governments should be freed to act to respond to the needs that these corporations are fighting for the right to ignore.

Repealing the 'Fair Competition Act' is a fair trade off for passage of statewide video franchise legislation. Doing so would free local governments to act on the interests of the community that the phone and cable companies do not share.

Amend the statewide video franchise bills to include a repeal of the Municipal Fair Competition Act. It's in the best interest of Louisiana.

"Vehemently Opposed" To AT&T's Law

As you were warned on these pages AT&T's state-wide video franchise bill is back again. The title: "Consumer Choice Television Act" is as deceptive a label as the infamous "Fair Competition Act" that the same corporate players used to attempt to kill competition from LUS when the network was little more than an idea. The idea that any law that the state legislature could pass would change the fundamental economic situation so much that AT&T would change its investment plan for rural Louisiana as consequence is a dumber idea than most that come out of the capital building.

The Louisiana Municipal Association (LMA) has come out as "vehemently opposed" to the proposed law. (They've issued a dramatic alert to their members calling for local officials to talk with their senators in advance of the Senate Hearing on the 23rd.)

They are right to do so.

It is an astonishingly bad idea.

In a nutshell: 1) It's astonishingly bad policy, 2) such laws don't work, and 3) there's no need in Louisiana anyway.

1) ASTONISHINGLY bad policy:
The state legislature proposes to take local property—our rights of way—from the governments that own and maintain them and substitute the Louisiana legislature's idea of what would be good for each community for what the people of the community have decided would be best.

This is plain flat bad policy and the law should be defeated for this reason and this reason alone: the guys in Baton Rouge should NOT be deciding what we do with our own property.

Even worse the plan is the "brainchild" of a single huge out-of-state corporation whose sole motivation in our state is find a way to get the most money out of our people while putting the least into building and maintaining their network here. Our state government should not be in the business of handing over local community assets to private enterprise.

The legislature overriding the will of local communities and telling them that they can't use their own property in the way they see fit in order to benefit some private concern simply cannot be justified.

But justify it they do... or at least try to. Which brings us to:

(The Justification)
The justification for telling local people to "act right" is that big brother in the state house is just doing this for your own good....(You knew that, right?)

Here's how it works: AT&T told their lobbyists to tell our legislators that keeping local governments from writing their own contracts about using Lafayette's and Bunkie's and Folsom's rights of way along the roads and ditches they own and maintain will "encourage competition" in cable TV. The idea is that AT&T is just too big a guy and too important to ask to talk to the mayors of little Bunkie and Folsom if they want to want to use local property. It takes too much time and they're busy. The AT&T execs flatteringly let it be known that they'd much prefer to deal with the "big boys" over in Baton Rouge and not trouble with all those tedious little people in backwoods. Dealing with the actual owners might have been good enough for all those cable companies who've been doing business locally for decades but it is beneath the dignity of the phone company.

As god is my witness! Really. They won't tell the story just like that but the basic rationale for the whole thing is that it just takes too much time to go to all those local people and that they're so anxious to give us competition that they just can't stand to wait. (Don't expect any legislator to notice that when they tried for this law two years ago saying they were just raring to go and offer every town and crossroads "competition." They weren't so eager that they used those two years to actually negotiate. Legislators should notice that they haven't been so eager to compete that they have actually done any negotiating in any town that law would have effected.—That's not what we call eager in my part of the state.)

What they don't mention much while they are promising the moon of quick competition in return for imposing state control is that they'd also, just incidentally, like to see a few fine-print items included as well like to avoiding certain fees, paying for public access channels like AOC, providing services to the owner of the land (your local government), and having to deal with being brought to heel for lousy customer relations by those little councilmen and, most of all eliminating the requirement that if they are to use the people's property to offer their product that they have to offer it to all the people--not just the most profitable few....they'd like all that eliminated while you're at Mr. Legislator. (wink, nod)

What's more: the legislators of 19 states have bought this sort of stuff. Starting with our neighbor Texas back in 05. So there is at least the beginning of the a record as to whether or not this thing works.

It doesn't. At least not quickly. And, least we forget, working quickly was the rationale....

2) Such laws don't work.
Some studies which have relied on asking the telephone companies whether or not they've rolled out more services because of these laws have, to no one's surprise, found that the companies tell you that yes. Of course they've rolled out more services. AT&T says: "All the expansion that we've done is because of those nice guys in the statehouse. We're mighty grateful, too." These studies don't ask about rollouts in comparable locales that don't have such laws.

Note: Verizon, who actually was eager to build new Fiber To The Home networks and actually is offering advanced new services over much of the the Northeast lost an attempt to get the feds to pass a law similar to the one proposed in our state and (gasp) is actually negotiating, quite successfully, with the local owners of the land they want to use. Of course, the explanation might be that they are actually radically upgrading their system and want to use it to offer new services, and really can't afford to wait. Unlike, frankly, AT&T. Who, on the evidence, just wants to slide by on the cheap and easy road.

If asking the phone company if they did what they promised they'd do when the solicited favors from state legislators resulted in "discovering" that they had kept their promises, studies which actually looked at hard figures had a radically different result. The whole point of competition is to lower prices, right? So if these laws work you'd expect lower prices...or at least no rise in prices. --Incidentally, not even AT&T is willing to say in public that it will offer video services in those rural areas that cable companies don't currently serve. Extending service is NOT on the table...only, supposedly, "competition."

But on prices, which is a nice hard measurable, Texans haven't gotten much of that competition thing. Since their "Consumer Choice" law came in their cable prices did not fall at any point and have actually risen substantially. Keep in mind that the Feds year after year issue findings that document that in those rare places where real head-to-head competition exists between cable companies the prices for cable are substantially cheaper—and AT&T (then BellSouth) showed those statistics to legislators two years ago. If real competition was going on you'd expect cheaper prices. It's just not true. If the law worked you'd expect cheaper prices.

But: Such laws don't work.

Lagniappe: Texas was first to the slaughter and our neighbor but, hey, these laws don't work in North Carolina either. And the telecos aren't even pretending to build out there.

But even if this lousy public policy could be justified, and even if these laws worked the truth is:

3) There's no need in Louisiana anyway
If AT&T is being truthful when it says that it just wants to quickly be able to get services to the poor, suffering little people of Louisiana (without having to actually talk to any of them) then you'd expect that they'd be thrilled to have an easy, quick way to bring almost all of the people of the state under a quick and easy franchise. And the fact is that this law won't speed up much of anything....

AT&T has made it perfectly clear that it isn't about to roll this out to everyone that has an AT&T telephone in their home. That would be too expensive. In fact they plan to serve, mostly what they call "high value" customers. And to serve as few as possible of their "low value" ones. That's what they tell their investors, and lying about investments can get you put in jail, while lying to legislators...well, that's a sport in Louisiana.

All in all they plan to serve, eventually, about 50% of all their current customers...In individual states that are rich and densely populated that number will be substantially higher. But in poorer, rural states like Louisiana you can count on it being lower. They just don't want to bother and when they have to be honest about this they say so.

So let's generously say that they plan to serve maybe 40% of Louisiana.

Which 40%? Well the "wealthy cities" a reasonable person might guess. Densely packed, relatively wealthy cities are where major buildouts are occuring.

But, and here is the real kicker: Those cities aren't available in Lousiana. New Orleans, Baton Rouge, Shreveport, Alexandria, and Lake Charles are all "old home rule charter" cities. The legislature can't force any such law on them. Lafayette was also included in the exempted cities in the 06 law and you can expect our legislators to work for that again. Even if they don't succeed this time (and I'd be surprised if they don't) AT&T would be foolish to spend a small fortune to beef up its network so it could remain the least powerful network in Lafayette. (Both LUS and Cox will have much more capable networks than the one that AT&T hopes to upgrade to.) So the big cities of Louisiana, comprising 35-40% of the population will live in places where AT&T will have to deal with local governments anyway.

In fact Baton Rouge has already negotiated a franchise agreement already. (And did so surprisingly quickly and apparently painlessly...see the bottom of the linked post.)

That 35-40% of the population is most of where AT&T will want to build anyway. And the LMA has put together a simple model franchise, it has gotten over a 100 of the remaining cities and towns to invite "cable competition" from their telephone company and to promise a quick and easy deal. That's a pretty credible invitation, if you ask me. I can't imagine the local councilman, alderman, or police juror who could manage to be reelected if he was seen blocking competition for the local cable company!



No, there is no real need to run over the rights of local communities to accomplish the goals a state-wide franchise is supposed to serve. AT&T doesn't need and probably won't use state-wide franchises--just as it hasn't used them in rural, relatively poor North Carolina.

But perhaps, as in North Carolina, the cable companies will benefit. Though the North Carolina legislators were assured that municipalities would not loose revenue, they did--they retained only about 62% of their former income from the lease of their land to cable companies as cable opted out of their contractual obligations to local communities and adopted the "good deal" offered by the legislators' law—a law that was supposedly passed to encourage the telecos to offer new, cheaper services which, in fact, they have not. That didn't work. No competition. Higher prices. Loss of local income. But the Legislators got the warm satisfaction of having been patted on the back by the big boys at AT&T.

North Carolina's legislators were played for fools. And their people were the ones who suffered. I'd hate to see Louisiana follow that path.

You can do your bit to help by calling your legislators and urging them to oppose SB 422.

The LMA says it well:

There’s ample time between now and April 23 to speak to your Senators about this harmful legislation. If your Senator is on the Commerce Committee, please contact him or her to discuss the measure. The Senate Commerce Committee’s members are – Sens. Duplessis (chair), Crowe (vice chair), Alario, Nick Gautreaux, Marionneaux, Michot, and Scalise. The Senate switchboard is (225) 342-2040.

Lafayette residents, in particular should note that Michot is our senator and Gautreaux is one of the Acadiana caucus senators. Both should hear your plea. While you're at it also oppose HB 869 by Rep. Arnold and HB 1009 by Rep. Ellington. Arnold's bill focuses narrowly on giving control of local property to corporations. Ellington is a special case: this house member was term limited out of the senate where he was the guy who signed his name to the (un)Fair Competition Act that would have prevented Lafayette from building its fiber network had it passed in the form that Ellington submitted. To see him carrying AT&T's water by introducing the house version of this franchise bill is completely in character.

WBS: "Why Lafayette Can Be That Shining City on the Hill"

What's Being Said Department

Geoff Daily over at AppRising has posted a remarkable article, "Lafayette Can Be That Shining City on the Hill." It's remarkable for the sympathy and insight that he shows. Enough so that you really ought to go read the whole piece. Go on, I meant it...

But I do want to preserve here the opening and closing bits of the post and briefly comment.

Opening 'graph:

During my week in Lafayette a message I attempted to leave behind is that building a full fiber network isn’t enough; it’s as, if not more, important to focus on getting the community engaged with the use of broadband.

Closing:

Lafayette is a unique and special community that I can’t wait to continue exploring, but for now I’ll end this coverage with the following charge to the people of Lafayette:

Your community is poised to take a bold step into the 21st century.

But your investment in a new network means nothing if no one uses it.

Your community can become that shining city on the hill for fiber and the use of broadband.

But only if you leverage the strength of your history, culture, and people to make the most of what’s possible.

If done right, Lafayette can guarantee its economic prosperity for the next 100 years.

But it’s going to take hard work to do so, not just building the network but getting the community ready to use it.

Cajuns know that through hard work great things can be achieved.

So set the goal to be great, make the commitment to do what it takes, and anything is possible.

Geoff is exactly right on these points and we'd do well to heed his call.

My small quibble is that by characterizing our place as Cajun he misses the parallel histories of the French, Creoles and Americains in this small area and the role of that admixture in building the unique place for which he clearly holds affection. A trip to some Zydeco haunts and more thorough introduction to the flavors and implications of gumbo can await a return visit.

Humor: Cox, Eatel, & LUS

Kevin Blanchard does his usual exemplary job of capturing the little ironies and quirks that make following the news so interesting.

In this morning's story on yesterday's big TechSouth Governor's award luncheon he covers the highlights of the event. If you'd like to find out more about the technology behind LITE and how BP uses in oil exploration the story is a great starting point. Our own Ramesh Kolluru comes in for well-deserved praise as well.

But if, like me, you're starved for a little knowing smile skip down to the end and read the bit about EATEL winning its Governor's award for best "Technology Company of the Year."

And just so you don't have to even click for your smile:

Gonzales-based EATEL was presented the Technology Company of the Year for its phone, cable and high-speed Internet service delivered over an entirely fiber-optic network.

EATEL President Robert Burgess thanked Cox Communications — a major sponsor of TechSouth — for its “formidable” competition.

“Because of (Cox’s) size, capability and market strength they force us to be at the top of our game every day,” Burgess said.

That competition has “helped” EATEL succeed, Burgess said.

Burgess than made a joking reference to Lafayette Utilities System’s fiber-optic based telecommunications service, expected to start up early next year — also in competition with Cox — saying he’s sure LUS would appreciate some help.

“We’ve had more than enough assistance,” Burgess said, drawing laughter from the audience, which included LUS and Cox officials.

“Please, any attention you give to us, please give it to (LUS),” Burgess said.

What Kevin does not have to say out loud is that lead sponsor Cox (with its name on every piece of promotion and occupying the suite of booths spanning the entrance to the affair) has recently been locked in an unusually public and expensive battle with EATEL. Cox is offering a super special that amounts to a 12 month 50% discount on its triple play package (with HBO!) but is only advertising it in the small area south of Baton Rouge where local telco EATEL is eating market share with the same FTTH technology for which they were receiving the technology award.

That's rich.

EATEL, as faithful readers of this blog will know, responded by taking out a series of full-page ads in the Lafayette Daily Advertiser which promoted, in vivid red and black, the deal in Lafayette as well. Louisiana law forces Cox to make the deal available throughout its service area but does not force it to promote it as evenly. So EATEL stepped up to "help" Cox out. So, on EATEL's account the two companies are engaged in an exchange of "favors." (That's rich, too.) After an initial confusion among Cox's operators, who initially denied the price reduction was available in Lafayette, the company trimmed its sails and made the best of a bad matter by allowing Lafayette residents in on the deal. Lafayette is a much larger market than East Ascension parish and extending the deal to Lafayette surely makes the attempt quash little EATEL with long-term price specials MUCH more expensive.

(Wanna know how you can get in on the deal? As a little fillup you'll be using a unified technology whose protocols will be similar to LUS' even if the capacity of LUS underlying infrastructure is vastly larger. After you get used to an all-IP household you can flip over to LUS' faster, locally-owned version. The Cox deal does not require a contract but is guaranteed for 12 months.)

/irk on/
As a little added fillip: Cox is sensitive on this matter—I wandered by the Cox booth at TechSouth (they give great floor prizes) and one of their booth guys struck up a conversation trying to encourage me to try Cox. I told him I already had cable and internet from them. He switched to urging me to try their VOIP. I couldn't resist at that point. I told him I was considering the "half-off" deal advertised in paper. ;-) He paled a little (though that might be my imagination) and said it was a good deal. As it is. But he then overreached by claiming that Cox had always intended to offer it to everyone. That it was only being "test-marketed" over there. Now that is just plain silly—and insulting. It was no accident that it was being offered in the only place in this market that Cox currently faces a local, FTTH-based competition. By all accounts EATEL is gaing substantial market share. I tried to point that out and that offering that large a reduction for 12 months had to be a bit more than a casual promotion. He countered by saying that Cox had done it elsewhere. I scoffed. He said he'd been working for Cox in Northern Virginia where they did the same. I doubt he expected anyone in little ole Lafayette to smile and point out that this proved my point about fiber competition—that is where Verizon's Fios FTTH network is going head to head with cablecos and is producing some of the highest speeds in the country. It's fiber taking market share, I said, that caused the long-term "specials" in both places. He wouldn't back off the company talking point that it was all just normal marketing and that it was just a coincidence that his company offered a 50% reduction in the one small place where they had fiber competition---and, oh yes, where they compete with fiber in Virginia. By the end I actually was insulted...Cox is, as EATEL says, a formidable competitor. They are shaping up to be the Verizon of cablecos—willing to really invest in the future of their network even at the cost of today's profits. That's both impressive and worthy. But their Achilles heal is their contempt for their communities, their customers, and even for individuals who walk up and talk to a representative at a trade fair. They need to learn how to be honest with folks. It'll go much further than hype, FUD and self-serving dishonesty.
/irk off/

Post Scriptum:
Blanchard is setting down his pen soon to go back to school and change professions. I, for one, will miss him and gently intelligent toss-off articles like this one.

The Bile Rises

Astonishing, Abusive — and in the cable industry they give prizes in "internal communications" (!) for this:

I Can Make a Difference!

Cox Communications, Inc.

Baton Rouge, LA

In launching the Cox Advocacy Network (CAN), Cox Greater Louisiana saw a unique opportunity to motivate and educate employees about how elected officials affect their business on a personal level by using three tools " All-Employee Meetings, Voter Registration Drive and Email Campaign. Through the All-Employee Meetings, a huge audience learned about what CAN is, how it works and heard first-hand from legislators how effective it can be. Many employees were able to vote in 2007 elections that otherwise would not have been able to. Employees were kept well informed of legislative activity and election information. Lawmakers want to hear from their constituents, and employees learned "I CAN make a difference!"

So they line everybody up in a room an feed 'em the company line and try and turn citizens into Cox lobbyists.

They pay their real lobbyists much better.

They tried this silliness in Lafayette (both Cox and BS) and it didn't work — BellSouth's (now AT&T) compulsory meetings of Cingular employees were regarded with particular contempt by the "participants."

There is no such thing as a corporate citizen. And stuff like this makes it clear.

"AT&T, EBR approve TV deal"

Well, that was fast! The day before yesterday we noted here that AT&T through its astroturf subsidary TV4US had launched the public relations champaign to support its statewide video franchise law. This morning we see the first substantial political move in the upcoming battle. Baton Rouge has cut a deal with AT&T and so is taken off the board in an early first move of the chess pieces.

AT&T, according to the Advocate, has reached a franchise agreement with the East Baton Rouge City-Parish government to provide cable TV (aka "video services") in the parish. Follows a summary of what seems to be going on with the caveat that all I have to go on is the article...I can't find the ordinance or contract online as I would be able to in Lafayette—anyone have access?

AT&T will have the right to offer its new "U-verse" services (site, overview) in the parish for 5 percent of revenues to the general fund and .5% of revenues to support public, educational, and governmental channels (PEG channels). Presuming that turns out to be correct (and enforceable) its a good deal on two of the three major issues that any locale should consider: a fair price for the rental of public land and support for local media. Realizing any actual benefit from those two will depend on the third leg: the product being offered to a sizeable number of citizens. AT&T has long made it clear that they do not intend to offer this product to just anyone...instead they want to offer it chiefly to their "high value" customers and less than 5% of their "low-value" purchasers. (Fiber To The Rich, FTTR) If you figure out the implications of what they told investors back when this plan got underway they only intend to offer this product to about half of their current population base. Baton Rouge and other wealthy centers in generally cash-poor Louisiana might get U-Verse in rich neighborhoods but I'd be surprised if it went much into North Baton Rouge and Scotlandville. That might prove a difficult thing for Mayor Kip Holden to explain.

A bit of unease about the part AT&T was unwilling to promise might well, in turn, explain the secrecy with which this deal was constructed and the stealth with which it was executed. Holden received the council's blessing to negotiate on Wednesday with no (that's NO) discussion, and was able close and announce the deal on Thursday. The fix was in. (*) What didn't happen was any public discussion of the pros and cons of the deal offered by AT&T--discussion which might well have lead to uncomfortable demands that the city-parish require AT&T to actually serve the citizens whose property AT&T wants to use. Such a requirement is part of Cox's deal...but not, I have to strongly suspect, part of the deal with AT&T.

And, speaking of Cox, what about the cable companies? Where do they play in this game? A smart reporter will try and delve into that question. AT&T is using its extraordinary influence in the legislature to push two very bad video bills through the legislature. By comparison the cable companies have relatively little influence. What's curious is that Lafayette is the state's largest community to whom these bills will apply. Should Lafayette succeed, as she did two years ago, in getting herself excluded along with other older home rule communities the five largest metro areas of the state comprising the wealthiest 35-40% of the state's population will have to have local franchises anyway. Since no one (except deliberately naive legislators) actually believes that AT&T is going to provide video in rural regions the question has to be who will really benefit? One devious answer would have to be: the cable companies. They will be able to drop their local franchises with the communities that actually own the land they want to use, pick up a state franchise at a 30% discount in fees and NO local obligation to serve PEG channels. In other states like North Carolina where the phone company waged a bitter war to win the right to a state video franchise they didn't make use of it and filed few such requests. On the other hand their supposed cable opponents made out like bandits snatching up state franchises which allowed them to drop the more demanding local ones. The end result was no significant new competition, no price drops, and a huge drop in income to local municipalities.

Somebody in North Carolina got taken.....and the grifters are on the prowl here



(*)Revealing tidbit: The wikipedia section on U-Verse vailability was updated to include Baton Rouge on the 25th, two days before Baton Rouge supposedly concluded the deal and one day before the city-parish council approved negotiations. Not surprisingly, the prescient anonymous editor who added Baton Rouge to the list of cities was operating from a "BellSouth" (now AT&T) URL. The fix was in....

"Cox Responds to EATEL Ad"

Sharon Kleinpeter of Cox tells the Independent that folks in Lafayette definitely can get the 75 dollar triple play deal (about half off!) as long as you don't currently have Cox phone service.

It's a good deal and the first sign of real price competition in Louisiana attributable to locally fostered competition.

Cox's Kleinpeter tries to finesse the question of whether they are targeting EATel with this promotion even while admitting that they are only advertising it in Ascension. The implication is that Cox just happens to be "testing" it in Ascension. Sure...it was entirely coincidental that the ONLY place that it was actively promoted was in the ONLY place where a local fiber to the home project was up and running and costing them market share. And it was only a coincidence that it was ONLY offered to folks who were switching phone service to Cox from a local phone company that recently started offering cable tv service over that fiber. Cox really shouldn't try to mislead people so transparently. It will make people outside of Lafayette think that Cox isn't honest about such things. (People inside Lafayette already know this.) Really, it shouldn't be embarrassing to actually admit to competing on price...regular companies have to do it all the time—and do it fairly.

The package a deal...and apparently there is no contract involved. Just a guarantee of the price for 12 months. It'll do till something better comes along.

(Thanks are due to EATEL for uncovering this and to the Independent for following up with such alacrity—the weekly had to ask "embarrassing" questions of a major regional advertiser. They did it, and are running the results, apparently without flinching. It should be noticed. Kudos.)

Is EATEL stealing Durel's Idea?

EATEL is making waves by taking out full page ads in the Lafayette Advertiser advocating that the citizens of Acadiana take an offer that Cox would rather offer only to EATEL's customers. There was another full page ad in Wednesday's Advertiser and, according to the Independent, radio spots should start soon.

It's a daring idea to spend your own money to promote your opponent's good deals.

But maybe not entirely original: the idea was first floated right here in Lafayette by our own Mayor Durel just before the fiber referendum:

Durel commented on the possibility that Cox Communications and BellSouth could cut rates by as much as $30 to keep customers.

"If they lower their rates that much, I'll take a full ad out in Baton Rouge and say, 'You, too, can have these rates,'�" Durel said. "I've talked to people around town, and if they can lower your rates by $30, what do you think they've been doing to you for 15 or 20 years?" (emphasis mine)

Indeed, that bears thinking about: either Cox can afford to take a 50% cut on its regular price and still turn a profit (in which case why are they charging you so outrageously now and pretending your price increases are all the fault of channel costs?) OR they are offering the promotion at below cost in order to drive EATEL out of the business (which would be a classic case of predatory pricing). You takes your pick. Neither says anything good about Cox. The Mayor had a real point back in '05. Take a look for yourself, the story can be scrounged up via the wayback machine. There's even a nostalgic BellSouth ad preserved on the page. The story brings back memories of the time and the fiery character of the Mayor.

Lagniappe Durel Nostalgia:

These "scare tactics," such as negative advertising, false information and promotion of current technology, are geared to create doubt, he said.

"They are desperately trying to defend a horse-and-buggy technology in a supersonic age,"

"It's a dream come true. I could hope for nothing more. It's a dream come true if there's a price war. Our citizens win."

Those were the days....

"What’s the Deal?" Cox & EATEL

The Independent picks up the EATEL ad in Sunday's Advertiser we reported on earlier. Reporter Nathan Stubbs gets on the phone and tries to get the half price deal Cox is publicizing only in Ascension and southern Livingston parishes. Initially he's given the runaround but after checking in with EATel's Communications Manager gets the secret password: "Special Promotion R-123" he is offered access to the deal.

More fun: the Independent reporter was able to bargain the price down further by not taking phone or HBO....though Cox is certainly not required to go that far in order to meet its legal obligations to offer promotions fairly throughout its area. It certainly seems logical to allow this base price to be the starting point if you want to add on channels or tiers at the regular price as one would normally do.

And, what's more Cox is claiming that you don't have to sign a yearly contract. That's nifty. The Cox phone rep tells the IND that they "don't do conracts" and a quick review of the local website seems to bear that out. But Cox certainly does demand contracts for special deals in other parts of the country and has here in the past. (A Cox attempt to tempt small businesses into a 3-year contract with a paltry 3% discount was especially noteworthy.) So it's interesting that they aren't doing that any longer in this locale—where LUS has, from the very beginning said it would not require any kind of contract. It sounds like pricing is not the only concession Cox is making to the specter of local competition.

For those of you out there that take advantage of this deal, remember who to thank: the little local fiber competition that could, EATEL and LUS. Nobody is getting a deal like this in New Orleans. Or in Los Angeles, for that matter.

EATEL Joins Fiber Fight

The fruits of competition...

That image to the left is a full page ad in the A section of today's Sunday Advertiser. Click on the image for a large, readable image...(caution, it's a big jpg.)

EATel's experience in their fight over in Ascension parish ought to inform ours. Clearly Cox "Greater Baton Rouge" is offering special deals only to EATel's customer base—possibly only to those that have threatened to move to the local, more powerful, fiber to the home alternative.

That, as EATel is pointing out in this ad, isn't fair pricing. You've got to offer the same deals to all. Otherwise you are engaging in a form of predatory pricing. —But you don't have to promote the great deal everywhere...On the other hand you do have to be willing to give it to anyone who asks for it.

So EATel is engaging in the wildly unusual act of promoting a great deal from its competition so you can ask for it. Cox can refuse, of course. If it does you should tell EATel who is surely preparing a lawsuit alleging unfair competition if this deal isn't offered fairly. Or Cox can honor the offer. Which would be hugely expensive if any number of people take it up outside of EATel's relatively small service area on the south rim of Baton Rouge.

It's a good deal. (And will cost Cox real revenue whenever and wherever it keeps this promise. It's evidence Cox is running scared.) But folks here in the city of Lafayette that are in the first build area would be best served to hold off. (IMHO) A better product is coming in nine months with hugely faster net speeds that will keep those dollars in local hands. (That 100 megs of intranet speed is going to make a whole lot of difference. I had two conversations at a party last night that revved me up on that score.) And even if localism and a superior product don't make your choice as easy as mine will be wait a little while anyway. --The closer LUS gets to launch the better the deals for Cox's standard alternative will become. This is only the first offering.

Folks outside Lafayette's first build should look into this. If Cox is going to push the bounds of fair competition with their small local competitors they shouldn't be allowed to do it secretly or cheaply. Fair Competition. That was what Cox wanted. They ought to be held to it. Call 'em and ask for the deal. What you want to do if they give you any guff is mention "Special Promotion R-123" — that detail is in the fine print at the bottom of the ad.


Cox was foolish to combine the Baton Rouge and Acadiana markets. Now they've got a two front battle on their hands and the contrast between little, local alternatives with a superior technology and the huge predatory out-of-state corporation with old technology will be inescapable.

Justathought: LUS should consider some coop advertising deal with EATel. I get the Baton Rouge Advocate and there's no similar EATel ad in it today.

Joey's Washington Talk

I've posted an (audio-only) "movie" of Durel's remarks at the House hearing on broadband and wireless networks to YouTube for your listening satisfaction.