Wednesday, November 10, 2004

Opponents and Incumbents Change Their Tune

One interesting tidbit that I haven't seen mentioned here or elsewhere is that Dawson, LUS' consultant, had new numbers for the lowest take rates that would prevent the system from losing money that were down to 21%. In fact, a lot of the presentation was devoted to impressing upon the council just how small the actual risk of the venture is. That didn't make for dramatic TV or interesting reading and so goes underreported but keeping in mind that the actual purpose of the meeting is useful: the idea, mandated by recent law, was to publicly assess the feasibility plan and decide whether or not to proceed on the basis of the business plan it describes. Financial tidbits like the break-even take rate are centrally important to making a judgment about the business plan.

If we focus on the financial risks and benefits the heart of the event lay in convincing the council and the public that the risk of failure is low and the chance of success high. From that point of view the event was a smashing success. The presentation was actually quite convincing that the upsides financially were great and the downside pretty minimal. But it is less the quality of the LUS presentation, effective though it was, than the response of the opponents that leads me say that LUS has won the battle of convincing the public that its plan can succeed.

An important thing that has gone unremarked is that last night, aside from BellSouth's Oliver's angry tirade, a new way of thinking about the issue emerged among opponents. Those who have been following the story will recall that the opponents have taken the condescending position that because LUS is a governmental agency it cannot, for that "reason" alone, hope to succeed against real "free enterprise" companies like Cox and BellSouth. This is faith-based, ideological reasoning and, as has been argued repeatedly on this site, runs head on into the reality of the market and LUS' history as an technically sophisticated, efficient, and popular public utility. Regardless, the opponents have consistently argued that they are generously saving the city from itself; they are simply trying to keep the city from engaging in the losing enterprise of competition.

That idea had vanished last night. The new ideologically-based line is that it would be awful if LUS succeeded. The ideologues no longer want to save us from ourselves. They want to save us from LUS' success. The worries focused on LUS' successful competition (that it might eliminate Cox and BellSouth!), on its reluctance to allow competition over its own lines for the successful services it intends to offer, and on the concern that somehow LUS' success would be unamerican. That's a huge change—and weak stuff. It's going to be hard to convince the public that they ought to fear LUS' success.

In its own way Oliver's tirade is another sort of confirmation that the ground has shifted to LUS. Oliver no longer is "reasonably" trying to save us from our own folly. He is now in full blown, burn the bridges, attack mode. He is claiming new weapons will emerge in the war to come and that BellSouth will compete aggressively, throwing everything they have into the fight. You can doubt, as we do here, that BellSouth will actually carry through with a fight that costs them more than words. But the reality of their difficult situation is not the subject of this post—the news is that rhetorically they have dropped most of their condescension and are treating LUS like the aggressive competitor it will be. BellSouth is treating LUS as someone you try and bluster and threaten into submission. And that, in its own way, is evidence that LUS has succeeded in convincing us all—pro or con on the construction of a municipal fiber optic network—that its feasibility study describes a business plan that can succeed.

In its own way Cox's absence is part of that same shift. It is famously hard to interpret absence but the most straightforward interpretation of Cox's no-show last night is that they felt they had nothing to gain by arguing with the feasibility study's methods or conclusions. My guess is that they judge this battle already lost and their contempt for the community runs so deep that they are no longer bothering to even address their objections to the people. I have no doubt, no one who has followed this could have any doubt, that Cox will continue to fight. But it is significant that they do not choose to even argue with the feasibility study.

The take-away message is this: Everyone agrees that LUS' fiber optic project is doable. That is no longer at issue. All that is left to decide is whether or not your interests are best served by allowing LUS to succeed.

The incumbents clearly have taken a position against allowing that success to mature. And ideologues agree, for their own reasons, that LUS success would be a bad thing for the ideas the hold.

But the real question is whether the council and the people think LUS should be allowed to succeed. In reality, I think that question has been answered as well.

I sure hope I am in one of the areas that gets fiber early. Where do I sign up?

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