WBS: The Path to Leadership

What's Being Said Dept.

They're talking about Lafayette's network in New Zealand. Or at least David Isenberg is. David visited recently and I am embarrassed to admit I haven't written about it. (Yet. I will.) I've written about Isenberg & the Internet and his F2C conference here before. For now let it suffice to say that he has the sort of stature in the field that people happily fly him across the globe in order to get his advice on what should come next in telecommunications policy. (For a well-written overview of the man, and a review of his speech hit the NZHerald.)

He went to New Zealand intending, apparently, to walk the Kiwis through a path toward internet leadership that included fare like "structural separation," and "unbundling local loops." But he ditched that complex policy message and decided that the real message should be:

"...let's face it, fiber, the all-optical network, is the end game."

His recommendation to New Zealand: Just go for it. And he thinks its pretty reasonable financially. He uses Vermont's rural and Lafayette's urban networks to run up an estimate for the cost of fibering up the whole nation. Here's what he said about Lafayette:

"In town, it costs a lot less. I visited Lafayette LA two weeks ago. Lafayette is a city of 110,000, or about 40,000 households. They're building a municipal fiber network to every house in the city, rich and poor, black and white, for about 300 million, or about $2000 a house at a 50% take-rate. If you factor in OPEX and everything else, their cost will be about $50 a month. They plan to charge $70, for TV, telephone and 100 Mbit/s Internet."

I think several of those numbers are off but the basic point remains true: It's not too costly for a determined community. And Isenberg's advice to the nation of New Zealand is to follow Lafayette's lead in building fiber to every home.

That's what I call good press. And sensible advice.

iProvo to go private

Long-time followers of Lafayette fiber will recall the supportive visits from Mayor Billings of Provo, Utah during our fiber fight. Sadly, Provo will be losing its publicly-owned network if the current plan goes through. If the city council approves the sale it will be bought by Broadweave and run as a closed, private network much like Cox, Comcast, Qwest, or AT&T. Broadweave has, to date, specialized in fiber networks in new, upscale, gated communities. The silver lining on this dark cloud is that the people of Provo seem to be getting off pretty much even financially. The purchaser, Broadweave, will being paying slightly more than bonded cost of the network. And, the people have a fiber-optic network in place that no private provider would have ever built. Of course this was not what the people of Provo hoped for: they wanted two things: to own their own system and to have a rich variety of providers running over the common infrastructure. In Provo, at least, these two desires turned out to be incompatible.

I'm sure the full story is more complex (and would be happy to be further enlightened) but from this edge of the continent it looks like the misgivings Mayor Billings voiced in Lafayette during one of his visits has proven all too wise. Back then he had a blunt response to a question comparing LUS's decision act as a utility and offer retail services directly and Provo's "open network" practice of instead relying on private retailers to market all the services that used the network's wholesale infrastructure. He said that Lafayette's model was the stronger one. Utah's legislature, however, had forbidden communities to offer retail services and so that option was not open to his city.

There is a story behind that state policy: Qwest--the Bell phone system for that region--had eyed Provo's acquisition of a local cable company and rushed to the state legislature to outlaw the very idea that the people should "compete" in the telecommunications business with their venerable monopoly. A last minute compromise to its law whose original intent was to simply outlaw all public competition was to allow cities to build networks but then to forbid them to run them as utilities--offering services themselves like water or electricity. Resourcefully, the communities made lemons into lemonade: the cities and their community activists found virtue in the "open" network idea that had been their last defense against a total ban and touted the advantages of increased competition and the lower prices and increased efficiency that would (surely) follow.

But Mayor Billings was right: it is the weaker model. It is never a good idea to allow your competitors to dictate your business plan. As history has repeatedly demonstrated there is a reason why all cable companies and all telephone companies have fought for vertically integrated networks and reserved its basic functions for themselves: it reliably pays the bill. The public wholesale and private retail model forces those that take the risk and do the work of building an expensive, sophisticated network to rely on outside, private providers who have done neither to generate enough profit to pay for the network and to provide a nice profit for themselves. Having an extra profit-making business in the flow of cash necessarily, all things being equal, means charging higher prices. And, in Provo's case at least, it also meant that the reputation of the network depended upon the quality of service that the for-profit face of the network offered the community. The private firms, while surely good folks, simply did not have the experience or the resources necessary. The Provo network initially had trouble securing providers and only one out-of-town provider was found (HomeNet). It struggled, did (generously) a mediocre job, was unable to get the sorts of adoption rates that public telecom utilities in places like Burlington, VT or Bristol, VA have quickly and easily achieved. When it went bankrupt Provo was forced to quickly bring on board two new providers and simply gave each half of HomeNet's meager pie. Subscribers had no voice in who they went to and were frozen in place for a period of months while the new operators took over restructured services. Not surprisingly Provo's citizens who experienced this chaos started dropping off even as new users came on board. This "churn" lead to slow growth and limited the pool of customers available to the replacement providers further limiting their ability to improve their offerings.

As we succinctly say down here: "Not good."

Or at least not good for the community. It suited Qwest fine, I am sure. Their state law worked. Just more slowly than they might have originally hoped.

A community-owned network needs to be a utility. It needs to be run on the same stable, sensible, local basis that other community networks are run. When the community can see that it is their network, can see the lower prices and superior service that come with a utility orientation it quickly gains subscribers — as it has in Bristol and Burlington. iProvo's troubles are a case study in the worst that can happen when a community-owned network loses that connection to its community.

I am increasingly glad that Lafayette has not gotten caught in this trap. As bad as the (un)Fair Competition Act is at least it did not force us to put an artificial barrier between our network and our citizens.

For more on this story see the short articles in the Salt Lake paper, the Provo paper and the post at the Free Utopia blog. No doubt there will be fuller stories when the morning paper comes out. (Free Utopia also posted an excellent set of suggestions to iProvo recently...that is really worth the read. It's too bad Provo didn't act on them.)

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

It's working in Virginia...& Tennessee

It has been a while since we've checked in with Bristol, Virginia's Fiber To The Home (FTTH) Network. Telephony Online provides another encouraging update.

Followers of Lafayette's saga will recall Bristol as the city that the "academic" astroturf organizations and Cox/BellSouth supporters tried to portray Bristol Virginia Utilities (BVU) as a failure in order to discourage Lafayette's citizens from considering building our own network. It was always a crock but the system has recently become such a roaring success that opponents of municipal networks have had to start simply ignoring it. But it's not about to go away. BVU's success has inspired its across-the-border sister, Bristol, Tennessee to do the same. The projects, located in economically struggling Appalachia, have brought much needed jobs to the community, saved their citizens money, and kept local dollars from draining out of the rural communities.

The story "Fiber beat still pulses at Bristol" is well-structured and I recommend reading the whole article. Here are some highlights that are sure to hearten muni fiber supporters:

On BVU's home town success:

BVU has fought major regulatory battles along the way, at one point suing the state of Virginia and helping to push through a new state law. The company has faced its own critics down, including local telco Embarq, which claimed BVU was cross-subsidizing its telecom services with its electric and water revenues...

“We had two very good success stories that happened with Northrop Grumman and CGI, which brought in 700 new jobs with average salaries of $50,000,” said Wes Rosenbalm, president and CEO of BVU. “The average salary here is $24,000 to $27,000. And we have a couple other deals we are looking at internally.”

On the consumer side, BVU has a 65% penetration rate for its triple-play services inside the city of Bristol...

On neighboring Bristol, Tennessee's following suit:

The Bristol, Tenn., City Council urged BTES to get into cable after it saw how BVU was selling cable service at lower rates than Charter Communications, the primary local cable operator, Browder said. After going through the process of becoming a CLEC, BTES added voice service.

“The local cable company, Charter, lowered prices in Bristol, Va., after BVU started competing with them, but they wouldn’t lower prices in Bristol, Tenn., so the city council sent us a petition,” Browder said....

“Right now, today we have almost 25% penetration, but we have areas where we have been out there a little longer that we have over 50% penetration,” he said. “We are quickly bringing up the distribution system. We have now passed 27,000 homes. The original plan was to pass 20,000 in four years. We are hooking people up as fast as we want to, based on the fact that we want to serve every customer really well. If we did some advertising, we could bring in a lot more customers in a hurry.”

On nifty-keeno services:

Both offer high-definition TV — Browder says the Tennessee side has more channels — and digital video recorders. BVU offers caller ID on the television via Integra 5 technology, and in February it announced on-demand video from Cisco Systems, to be available by July...

“A huge piece for us is what we can do with the electric system; we can read meters,” Browder said. “They do automatic power outage reporting, and it automatically reports to our dispatch. When we very first started, we had a lightning storm. Thirty-four customers were out; two were on fiber. We knew it right away. A lineman went and fixed it before we got the phone calls.”

“With this system, they can buy $50 of electricity, and when it goes off, it quits. It’s been a great service to this particular group of people that need that. Also we have 14,000 water heaters in one area that we cycle off during peak times to save electricity. We can move that to very off-peak time by monitoring them and leave them off much longer times. If temperature drops we can turn that one back on.”

The line the hacks in astroturf organizations have always promoted was that municipalities could never get an effective network built or run it well. Bristol should put a stake through the heart of that nonsense. Here's to hoping Lafayette will will help finish that line of "reasoning" entirely.

Has Lafayette Found its de Tocqueville?

It seems that Lafayette, the city that honors the Marquis de Lafayette, might well have found its de Tocqueville in Geoff Daily.

De Tocqueville was the Frenchman who toured the newly sovereign nation and became our nation's most insightful commentator. He came to the new United States to survey its penal system and came away an an ardent fan of the new democracy. A product of his own culture and station in French culture his judgments on the way the new nation was growing were oft ambivalent but his insight into the reasons for the growing differences between the old world and the new world aborning were and remain influential. He turned an outsider's eye on something new and saw shapes emerging that were difficult for those participating to recognize. De Toqueville concluded that the free availability of enormous amounts of new land for every citizen —the frontier— made impossible the old world feudal relationship based on the nobility's ownership of the land and the tenant's dependent relationship. In the new world every yeoman could own his own land. And they did. The emerging culture of equality had much to recommend it; and, on de Toqueville's account, much about which to worry. He was concerned that equality might too often become mediocrity and overpower the natural nobility he attributed to the founding fathers. De Toqueville remained hopeful about the American experiment and kept an attentive eye on its development.

Daily came to Lafayette to see a new fiber-optic network. He has repeatedly published his notes on our experiment. He appears to have found something more than just a network--just as de Tocqueville found something more than just a penal system. He finds a community-owned network and attributes much to the culture of the area and the nobility of its leaders. And he Daily has an advantage de Toqueville never had: he may have missed the revolution but is in a position to see the launching of the new network from the beginning and to see if the potential of enormous amounts of new bandwidth has effects on our community that are analogous to the frontier in our nation's history. Like his predecessor, Daily, is already warning that our future is what we will make of it.

A sympathetic outsiders eye has come to Lafayette. That is a good thing, surely. It will be interesting to see if Daily proves as insightful about the cultural changes that follow as his predecessor.

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.

Cable Vs Fiber

It's the same all over department...

Cable companies across the country are having to deal with Verizon's FTTH network and are coming up short. In response to a real fiber network they are trotting out an advertising blitz claiming that they have a fiber network too. This is, of course, a blatant attempt to mislead. Verizon's advantage lies in the fact that it carries the fiber that every (every) carrier has in the backbone all the way, all the way to the home.

According to multichannel news the strategy is widespread:

[Verizon exec] Walls said cable providers confuse consumers with their claims to fiber architecture. As examples, he cited commercials from Cox Communications (an animated spot that asserts the phone companies are a decade behind Cox as far as fiber investment) and Cablevision Systems (the voiceover states that “they're” talking about fiber but “a lot of their network isn't”).

Cable's claims to a fiber network on par with that being built by Verizon is “like saying a Volkswagen and a [Rolls-Royce] are the same because they both have tires,” he said."

Now Verizon is suing...

Verizon Communications filed a federal lawsuit Wednesday against Time Warner Cable, alleging the cable operator’s TV ads make “blatantly false” statements about its FiOS services in an attempt to dissuade customers from switching.

It would be good if the courts would find that such advertising is an attempt to deceive the consumer and hence illegal. It is certainly nice that Verizon, with legions of legal staff to rival AT&T's, were to establish this for all the EATels and LUSs of the country.

Without such a finding expect the same sort of advertising here...in about 9 months.

"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....

Wireless Waking Up

Just a small moment in the maturity of broadband advocates: MuniWireless, Muniwireless is saying:

What I see in a lot of cities is that politicians are using “Wi-Fi for low income communities” as a cheap and easy way out of their real obligation, which is to take leadership for laying down a robust, open telecommunications infrastructure (based on fiber) that benefits everyone, not just low-income people. That’s harder to do, and certainly more politically risky, since that means going up against various communications incumbents that fund political campaigns, and pissing off people who have a stake in keeping things the way they are. (emphasis mine)

The context is Houston where a classic "free" municipal WiFi plan crashed and burned leaving Houston without the network it had contracted. Esme Vos at MuniWireless is distressed because the city isn't holding the private provider to the contract in a way that would meaningfully meet the goals of the contract.

That, in the end, necessarily means substantial fiber as now apparently even the most ardent of the muni wireless fans understand.

Good for her. And good for the movement. Maturity is a useful thing to have.

The 700mhz Spectrum Auction and you...National Edition

The 700 mhz spectrum auction closed last week and it is likely to be one of the most significant events you've never heard of and wouldn't normally care about if you did. Citizens should set aside a moment of silent sadness to mark the occasion. But national and local citizens will have different reasons to mark the day.

The FCC's 700 mhz auction sold off the last bits of really good spectrum that will be available for the foreseeable future. It was freed up by the Feds finally taking back spectrum from the television broadcast industry after forcing a reorganization of broadcast technology based on more efficient digital technologies. The reallocation of that spectrum held the last great hope for opening a powerful 3rd, wireless, connection into your home or business.

Opening up space for a new competitor was one of the stated goals of the sale. Instead Verizon and AT&T—by far the two largest telecommunications companies in the US each won most of a "block" of spectrum. The upside spin is that this will allow Verizon and AT&T to build faster more reliable networks. The downside complaint is the one I've already voiced: that does nothing to add new competitors to an already competitively anemic mix. This sale all but assures that AT&T and Verizon will be the dominant, largely unchallengeable national-level service providers of both wireline and wireless connectivity into future.

Part of the unhappy background to this sad tale is the finality of it. The federal government in the guise of the FCC has moved from treating spectrum as a "license" issued on behalf of the communities the licensees serve to a "property" that corporations (or at least the most wealthy ones) can buy. Because the public spectrum has been remade into private property the potential for reorganizing its use at a later time to better serve the public has largely ended with this sale. The irony is that the TV spectrum that was sold was only available because the FCC exerted its control over TV licenses to force (a bitterly resistant) broadcast industry to move to a more modern model of broadcast. The "new" spectrum will not be similarly regulated.

So...the national citizen can justifiably feel that it's sad that new competitors will not rise to challenge the oligopoly telecom market. Some had hoped that Google (which convinced the FCC to put a modest "open" condition on the block of spectrum that Verizon won) would actually buy up one of the blocks and put in what would amount to a wireless internet. A new network focused on IP data which would let you use any device to connect to it and which would be completely open. Google, it was hoped, would sell connectivity as a commodity and would eschew any attempts to build a content empire based on its control of the network. The imagined network would have been the very essence of what net neutrality advocates are hoping for. Such a network would have been very attractive one would have to think based on the bitter complaints about about the current providers and the almost universal affection for the openness of the internet. The success of a truly free entry point onto the network could have forced the current providers toward openness themselves, if only in self-defense.

We're not going to see such a network. And the record price that Verizon and AT&T paid for the spectrum is evidence of how much they feared that a neutral, open network might be successful. (The auction yielded almost twice what an optimistic Congress had hoped for.) The thin silver lining on the dark cloud of the spectrum auction is that Verizon, which has made gestures in the direction of net neutrality and which has said it would refuse to police the internet for content owners won the spectrum that was offered under the google-favored conditions. That makes it seem likely that Verizon will emerge as the preferred company for advocates of a more open internet. (Caveat: Verizon cooperated fully with the warrantless wiretapping that caused such an uproar, as did AT&T. There's no really "good" carrier, just a less bad one.)

To add insult to injury it looks like AT&T at least will have to go further in debt and eat into operational funds to pay for the ability to maintain its current business plan. That means that network upgrades, already put off as the new AT&T absorbed the debt of buying BellSouth and others, will be further delayed and since the business rationale for making the investment is, to my eye, focused on preventing new competition, the incentive for innovation will be minimized as well.

So, the hope for a new, powerful 3rd connection into the home to supplement the cable and phone duopoly has been thwarted. The incumbent phone companies have snatched up the best spectrum and there remains no block of spectrum that could be used to mount an alternate national network from scratch. This will minimize, and perhaps was meant to minimize competition and that will surely reduce innovation. Even worse, they've gone into such debt to buy the spectrum that little capital remains to do anything with it... That's the big picture and the national version of why you should care about, and shed a tear for, the unknown spectrum auction. Like many things, however, the local story may well be more interesting—and even more important to local readers. More on that in a subsequent post. Teaser: Cox, not AT&T, is the big player.



Langiappe: after drafting this up I found two smart analytical articles that I'd like to recommend to those wonkishly interested in this topic: Susan Crawford's detailed analysis of just why Verizon's win is even sadder than I have claimed and Harold Feld's take which is slightly more upbeat than my own. Lots of detail.

FCC Bans Landlord Control of Tenant Telecom

The FCC banned exclusive deals between telephone companies and landlords this week bringing phone companies into align with the policy it recently imposed on cable corporations. In Lafayette that means that companies like Cox and AT&T won't be allowed to keep competition out of the approximately 22% of the households in the city that live in apartments by buying off the landlord. (It's about 26% nationally.)

While little companies like LUS and EATEL benefit, rest assured that the new ruling is not intended to help them—and wouldn't be enacted if it only helped out new competitors. That's not the way our FCC actually works. The new ruling is actually intended to be consistent with the recently-enacted policy of outlawing the common practice of cable companies paying a handsome monthly fee to landlords for exclusive rights to "their" tenants.

The backstory is pretty simple: The FCC has been saying that it wants competition and, that in fact, competition is already robust in the telecom market. While we may argue with that, one area in which legacy regulations were clearly out of whack with the ideology of competition was in the area of apartment buildings and condominiums—in those situations landlords were allowed to strike exclusive (and hugely lucrative) deals with cable and phone companies for exclusive access to their tenants. In such situations the actual paying customer had no choices and saw no competition. Now that competition is supposed to be widespread, and the old exclusive monopolies supposedly broken up, the situation in apartment complexes and other "multiple tenant environments" like shopping centers and office buildings too glaringly contradicted the new narrative to ignore.

The real explanation is that the phone companies want into the hugely lucrative cable business and are happy to give up exclusive access to the declining wireline phone business to get guaranteed access to the quarter of the population that is most densely packed and very profitable to serve.

So this wasn't done to benefit consumers or new competitors—if that was the reason such medieval nonsense would have been forbidden years ago. But luckily for us all, the big phone companies want into a new business (besides the wireless one, I mean) and the FCC is happy to oblige again. But, mostly by accident, consumers and new competitors do benefit. So let's be happy for small favors done...and happy that at least in Lafayette the choices will include a real change for the better.

On Fiber in Europe (& Here)

Europe is pulling out in the race to fiber up and Holland and the Scandinavian countries are leading the way. A report from the European FTTH Council is stuffed with qoutables. Let's indulge:

The battle over the future of broadband will be fought in the streets and houses...

Fiber Rules:

There is also evidence that operators that are first with fibre find it easy to attract and retain customers. John Quist of the Dutch incumbent KPN described how 85 per cent of households covered by one municipal FTTH network in the Netherlands converted to paying customers.

"The cable companies and KPN and the other telcos were just wiped out," he said. Another Dutch municipal network, Neunen, claims 90 per cent take-up, while Sweden's ViaEuropa claims 78 per cent. One municipal operator said that its FTTH services were so appealing that it did not need to market them to the younger population, hence the coffee mornings for the older generation...

First little piggy to market wins...

The problem for conventional telecoms operators is that there is more at stake than just subscriber numbers. If one operator beats others to wiring a house or apartment block, it will have a monopoly on that infrastructure that will likely last decades. In order to serve these customers, other operators will have to rent capacity at least on their competitor's in-building wiring, even if they take the risk of laying their own fibre to those properties.

Municipal networks are scarfing the incumbent's lunch:

Municipal networks in particular pose a challenge to conventional operators. Driven largely by social rather than commercial motives, these publicly funded projects are spreading from Europe's northern states to its larger markets, having been sanctioned in France and Spain.

Reggefiber, the owner of the network Quist referred to, already has FTTH infrastructure covering 200,000, or nearly 3 per cent, of the Netherlands' 7.2 million homes and is expanding. One of its projects, Citynet, plans to eventually cover 450,000 homes in the capital, Amsterdam. Municipal networks in Sweden, meanwhile, pass more than 6 per cent of homes and counting...

Municipal networks in particular pose a challenge to conventional operators. Driven largely by social rather than commercial motives, these publicly funded projects are spreading from Europe's northern states to its larger markets, having been sanctioned in France and Spain...

Another advantage the municipal networks have over incumbents are their close links with communities. Organising town meetings, door-to-door sales and recruiting well-known local figures as ambassadors for their wares is not much of a stretch for them.

Who'd a thunk it?

Today's New York Times waxes worrisome about the lead the Scandinavians and the Dutch have amassed:

“We have four countries that are world leaders — Sweden, Denmark, the Netherlands and Finland,” said Viviane Reding, the European telecommunications commissioner. “We have eight countries which have higher penetration rates than the U.S. and Japan. We are not doing badly at all.”

Now in bone-wearying fashion the good gray lady of the New York Times doesn't ask HOW those countries pulled ahead. Even though it's apparent that the municipalities of the the Northern countries have been the engine. But the NYT in a fine fit of presumptive understanding knows it must be some new competitive scheme that the European regulators are cooking up. (The European Regulators are happy to tout that as the explanation.) But contemplated competitive regulation does NOT explain how the leading European countries got out front. The real explanation for the burst of energy from Europe is that the municipalities of the north were free to compete. And their stunning success has scared the rest of the European Union into action.

It'd be nice if Lafayette and few of its brethren could do the same for the United States.

FTTH satisfies consumers

Fiber T0 The Home is better than AT&T's Fiber To The Node....according to a Corning program manager for fiber networking:

In a survey of customer satisfaction, respondents ranked Verizon's Fios FTTH network highest in satisfaction with 96 percent of respondents satisfied with the service. By contrast, satellite-based services for DirecTV and Dish Network ranked at 89 and 82 percent respectively, and AT&T's fiber-to-the-node (FTTN) service was in line with several cable TV services that ranged from 70 to 73 percent.

Separately, among consumers who said they were not satisfied with their new FTTN service from AT&T, about 70 percent said the reason was it offered inferior video service compared with their previous supplier, presumably a satellite or cable TV carrier.

In addition, adoption rates of the AT&T service have slumped recently, while those of Verizon are on the rise. The percentage of homes passed by the AT&T network that chose the service has gone from about 10 percent to about 6 percent. By contrast, figures for Verizon are trending up from about 4 percent to about 15 percent.

"inferior video service" —ouch.

So the FTTH service generates 7 to 14% more satisfied customers than satellite services and 23 to 26% more satisfied customers than cable or AT&T's new cable service. And as people are becoming more familiar with AT&T's service the phone company's ability to get new customers is actually dropping. (You expect a new service to become more popular as the good word spreads and people become more familiar with its availability and advantages. If that isn't happening it means that the bad word is spreading.)

It doesn't sound like there is much hope that AT&T, if it should every get to Lafayette, will offer much of an improvement over Cox. If I had any I'd be selling my AT&T stock.

There is a rumor out there that AT&T will make another try at statewide video franchising in the coming regular session of the legislature. The last time around only Kathleen Blanco's brave veto (at the behest of both rural and urban local governments) saved the state from giving away the farm on AT&T's promise of a fancy new service. The evidence is starting to come in that its a service that is so bad that nobody much wants it. I hope the legislatures this time through trouble themselves to look at the evidence of whether or not people really want this thing before they offend both the municipal association and the police juries.

If Verizon can get 96% approval for its new fiber offering, just think of how happy a utility with hometown chops and fiber can make you.
I want my LUS Fiber. Now.

Why Voting in Fiber Was Smart

Ok, every so often I see something that just snaps my head around. An "upbeat" report from Parks Associates, reported by Broadband Reports, demonstrates just how different my frame of reference has gotten. I think about the technical future differently from my compatriots.

This report is pleased to say that a bit more than 10% of the US population will have access to 10 Mbps of broadband by 2012.

This is regarded as good news.

Really.

That strikes me as crazy. Here in Lafayette 10 Mbps or so will be the least capable, el cheapo tier offered by LUS. Not the best. The least. Everyone...100% of the community...will have access to that kind of capacity. Within our own network we'll be able to communicate at 100 mbps at NO additional charge.

And the rest of the US is supposed to be happy at the idea that 10% will get access to 10 mbps by 2012?

There is a better way than waiting for the incumbents to do it for you. You can do it for yourself.

We figured that out on July 16th, 2005.

We made the right decision.

F2C: Highly Recommended

The 3rd Freedom To Connect Conference (F2C) is being held in Washington on March 1st and April lst.

I recommend it highly. Go get on board now. Prices go up March the 7th (this Friday!) I went to the inaugural meeting and am going again this year. A fascinating crew shows up and, like most good conferences the best takes place in the halls and over lunch-time hoagies — but unlike most the sessions are worth every penny. Smart people saying what they actually believe. Nothing is more invigorating—including that silly trip to Cancun you thought might be energizing.

F2C is the brainchild of David Isenberg, a funny, fiesty fellow of just the gadfly sort we approve of here at LPF. The idea is to get a bunch of smart committed people interested in sustaining our "Freedom To Connect" over modern networks together and let them go to it. (Isenberg has a more reasonable-sounding description, I think he's being politic.) This year the theme is "The NetHeads Come to Washington" and the contrast is implicitly between the beltway "bellheads" and the insurgents from the restless hinterlands. Isenberg is the "Original NetHead®;" he is the fellow who coined the approving phrase "the stupid network" to describe the architecture of the internet, which places processing "intelligence" at the edges of the network (i.e. at Google and at your 'puter) and to contrast it with the old Bell telephone network (where all the intelligence is in the switches and your phone is as dumb as a rock). You might be under the impression that Net Neutrality is a new issue. You'd be wrong--at least about the underlying philosophical differences involved. Those are as old as the internet itself. Check out the 1996 Wired screed that is the first reference I know of to "Netheads vs. Bellheads." The contrast between the two sides—right down to the core issues of money, control, and Quality Of Service vs. raw bandwidth have been on the table for years for those in the know. Isenberg gathers up those sorts of prescient folks. If you'd like to be a decade ahead of the curve you oughta consider the conference.

Take a look at the agenda. You'll find folks from all over the world (Amsterdam's FTTH guru Dirk van der Woude anyone?), industry stalwarts (like Ron Sege, head of Tropos that is supplying LUS' wireless network), all around brilliant types (Clay Shirky, Susan Crawford and almost anyone you care to pick off the list), legal eagles and advocates, (Jim Baller, Matt Stoller) and even the occasional local activist type (modesty forbids)...

It should be interesting.

Get a clue: if you can, go.

And if you can't click into the web stream; that's what I did last year and thoroughly enjoyed it.

Mr. Durel Goes to Washington — updated

Joey Durel presented Lafayette's case for municipal broadband to Washington this morning. He spoke today before the House Committee on Energy and Commerce. The committee hearing was in reference to a proposed new law called the "Wireless Consumer Protection and Community Broadband Empowerment Act." Most attention on the net and in trade news has focused on the first section of the bill which focuses on making wireless networks more consumer-friendly. Some articles have suggested that such a law would result in open, unlocked cell phones. The iPhone, for instance, couldn't be locked in to only AT&T. Others would force companies to provide more transparent and accurate information on coverage and terms. All that, of course, would be a great thing.

But the primary interest of those of us in Lafayette, and the reason our Mayor showed up on capital hill, lies in the second part, Title II: Community Broadband Empowerment. That portion would prevent any state forbidding municipal networks—something that lobbyists have successfully promoted in a number of states...and something that they tried to do in Lousisiana where only Governor Blanco's clear signal that she'd veto anything that both sides couldn't agree to lead to a compromise that allowed Lafayette to proceed, though with significant unfair restrictions on its ability to compete. The gist:

No State or local government statute, regulation, or other legal requirement may prohibit, or have the effect of prohibiting, any public provider from providing advanced communications capability or service to any person or to any public or private entity.

Now that leaves significant wiggle room for endless litigation. (Lafayette knows well the danger of laws being used to simply delay a local project. We lost years going down that path.) Louisiana's (Un)Fair Competition Act significantly cripples the fiscal operation of any municipality in the state that wants to offer its citizens a cheaper, more competitive deal—large swaths of the law incongruously force the state regulators to raise (not lower, raise) the price they offer their citizen/customers based on expenses that municipalities do not have. (NO portion of the law sets an upper limit on prices....this is "regulation in the public interest" where the public's interest is scarcely served. Clearly no one thinks the citizen-owners will overcharge themselves. So all that is left is to protect is...the enormous corporations??? AT&T don't need to be protected from Lafayette, quite the opposite is true.) Sadly, Lafayette may prove that such laws, as unfair as they are, do not "prohibit, or have the effect of prohibiting" an exceptionally determined municipality. It would be unfair to the nation as a whole if Lafayette's unusual energy and determination had the effect of barring communities across the nation from safely following its lead.

A good federal law would not leave such large loopholes--states ought also to be prohibited from enacting laws that would make local communities labor under regulatory disadvantages that do not apply equally to their large, corporate competitors.

I didn't hear about the session until it was already underway but thanks to the miracles of the internet was able to tune in to session then. I missed Joey's initial remarks but captured most of the discussion that followed. That went as you might expect: Representatives reperesented the interests of their state (or corporation). The representative from California was worried that strong California consumer guarantees not be diluted--while the speaker from the industry clearly hoped it would be. The senator from AT&T's San Antonio hometown insisted that "government" had some unfair advantage—completely ignoring how crazy was the idea that Lafayette's little power/sewer/water utility could ever operate at anything other than a huge competitive disadvantage to the immense monolithic power of AT&T.

Joey acquitted himself well; insisting that we were doing for ourselves what corporations refused to do for us and had done so with the uniform support of local business and local bipartisan political endorsement. Not to mention an overwhelming vote of the people. That seemed hard for the opponents to respond to—as well it might. The contrast between someone whose first interest was his community and someone who was trying promote corporate interests instead was, I am sure, uncomfortable for the representatives who are hoping to prevent the passage of such a law.

Some fun sound bites:
Durel was talking about taking the fight all the way to the state supreme court. He commented:

"those were probably the best marketing dollar we could had ever spent. It was great publicity for us."

Now thats a bit of bravado. It might even be kinda true.

Several times Joey was challenged with some industry rhetoric—mostly about promises that the incumbents made or didn't make. Several times he answered:

"Smoke and mirrors."

That's the Joey we know and remember from the fiber fight. There was little such bluntness in the rest of the discussion.

Some of the questioners seemed to be suspicious of the very idea that the community might offer a product for less money than the amount they were paying to buy their service from private providers. Durel was ready for that one. He said that he'd tell them what he told his own community:

"You'll still be able to have less quality for more money."

And the room erupted into laughter.

NOTE: My thanks to the alert reader who pointed me to this event!

Update 10:20 PM: The archive for this meeting is already up. I'm happy since I missed the first of the live meeting. You can get the written version of Durel's remarks and stream or download an audio of the meeting. That's pretty impressive transparency...and a pretty nifty use of the internet to make government accessible. Durel's set-piece talk starts at 28 minutes. He deviates significantly--very significantly, it is almost a completely different speech from the written remarks and the spoken version is much more interesting, emphasizing keeping our children home, development, that we'll have peer to peer 100 megs for "free," and about the digital divide: "People on our system will be able surf the internet from their television, with a wireless keypad and a wireless mouse."

With tongue firmly in cheek Durel also said: "I hope 49 states outlaw doing what we are doing. Please send your technology companies to Lafayette and we'll welcome them with open arms and a gumbo."

Self-Reliant Lafayette

The Institute for Local Self-Reliance (ILSR) recently released "Municipal Broadband: Demystifying Wireless and Fiber-Optic Options" that should be on the bedside table of decision-makers and community activists in any locale that hopes to control its own communications future.

The author is writing against the backdrop of St. Paul, Minnesota having recently pondered and decided to pursue building a fiber-optic network. The study makes the general case that proved a convincing argument in that twin city. It is no accident that such a useful general study grew out of the specific needs of a real community.

In my judgment Christopher Mitchell gets it exactly right: the big take-away is that communities can, and should, control their own communications destiny; no one else will do it for you:

Private network owners simply have different motivations from public network owners. Private companies are legally required to maximize profit for their shareholders. Public entities have a different mission; they are focused on maximizing social and economic benefit to the community. This distinction seems to have been lost in much of the discussion around municipal broadband systems.

That's as simple and direct a statement of the obvious as any long-term advocate of public ownership could hope for.

That, happily, is not the only thing Mitchell is right about:

As St. Paul found, fiber-optic wires form the communications foundation of the future. Fiber networks last for the long term while offering un-matched speeds and capacity.

And:

Fiber networks should not be considered an alternative to wireless networks. As noted previously, each solves different problems. Fiber networks can actually lower the cost of building a wireless network. Once the fiber network is completed, wireless nodes can be easily connected, offering considerably faster speeds than those without ubiquitous wired backhaul.

Wrapping it all up:

Fortunately, we already know the solution: wireless solves the mobility problem; fiber solves the speed and capacity problems; and public ownership offers a network built to benefit the community.

Those are the crucial points upon which an intelligent, well thought-out report is built. Having got the basics right Mitchell also demonstrates the ability to write well--explaining the critical differences between the technologies as well as he does the basic points of ownership and function. If you want to really understand the differences between wired and wireless architectures, and between cable, DSL, and Fiber delivery systems in terms that make it clear what those differences mean for the communities that use them, this is an almost uniquely useful text.

This well-done report should advance thinking in the area by making it nigh on impossible to ignore the basic case for public ownership—that only public ownership will lead to the public's interest being consistently served. It should, as well, clarify the proper role of fiber and wireless in building an advanced infrastructure for your community. As has been argued here repeatedly, fiber and wireless are both necessary but a robust fiber network is the foundation for a truly useful wireless network.

Small print; two caveats:

First: The question of the possible monopoly nature of wireline networks is not dealt with. Most discussion, and this one, implicitly assume that competition between different wireline networks can be stable in the long run and so the issue of WHO owns the network is one that is not, perhaps, pressing. --If the local provider proves unreliable or abusive it is assumed that we could provide competition later. I am not at all confident of that assumption, strongly suspect that wireline, and especially wireline fiber, is a natural monopoly and am fearful that there is but a small window for communities to gain control of their own future and avoid being subject to a monopoly run from a distant metropole with no real regard for local communities. Sounding the tocsin now is, I fear, necessary.

Secondly: I, for one, would like to see more discussion of the role of open and closed networks. ILSR comes down pretty simply on the side of open networks--while noting that its favorite example, the one of Burlington, Vt, is ambigous on this issue. Burlington endorses an open network theoretically but sells its own products at retail and has yet to actually have other firms selling retail service over its fiber. (Other than, of course, pure IP plays like Vonage telephony, which can ride any network.) This issue has been chewed over pretty thoroughly on this site and we've come to a pretty nuanced view—one which recognizes the value of real competition but doubts that public networks can survive if forced to compete at a structural disadvantage with private, vertically integrated incumbents. Examples of clearly successful municipal communications networks competing against established incumbents are easy to come by. Give people fast, low latency public fiber at a cheap price and we'll all abandon the retail, broadcast, POTS telephone provider fairly quickly--that is what's seen as the inevitable "IP migration." Voice service, is already moving in that direction quickly. Video will follow in any community as soon as there is a provider that will offer enough speed cheaply to move in that direction. But that is not in the interests of the established incumbents. And, as Mitchell correctly points out, only publicly owned enterprises would find it in the interests of their owners (the public) to allow or even encourage this migration. A fast, public fiber network like Lafayette's is the only visible realistic alternative short of a sea change at the Federal level.

But my quibbles are minor—asking any one study to address so many topics is surely unreasonable. Especially when what is before us is so astonishingly well done.

Highly Recommended


PS...an theIND blog post notes this is as a study which praises Lafayette and the choices we've made. True, we get two nicely favorable mentions. But they are only mentions. Wait until we're up and running.

Good for the Goose...Cox Sued

Recalling the old proverb, "What's sauce for the goose, is sauce for the gander:"

In a development that is sure to bring a wry smile to those of us who witnessed the legal tactics used to delay the start of Lafayette's fiber to the home project, Cable Digital News notes that Cox has now been sued over a service it wants to offer.

The gist is that Verizon is claiming that Cox's VOIP phone network infringes on its patents. Verizon has already won a high-profile case against net independent phone provider Vonage over its use of the same patent-protected technology.

Another proverb: "He who lives by the sword, dies by the sword."