Tuesday, November 30, 2004

State Fiber: Let's Ask the Right Questions

Whew! The state's fiber assets make the front page of a daily newspaper in Louisiana run by it's largest news organization. A state senator from north Louisiana, in effect, exclaims "Shazaam! This could be a good thing!" And the Governor says the state is going to use this fiber — one day — after more study is done and after we figure out how to let BellSouth and other phone companies make money on the deal.

This is, on the whole, positive news. The only negative is that, it is clear from reading the story, that the boys from BellSouth and other phone companies have been 'working' governmental leaders in an effort to underplay the potential that this fiber offers our state.

The fact is that there is so much fiber in the ground in Louisiana, owned by companies that are within a hare's breath of bankruptcy court, that State Government could buy dark (unused) fiber along any of the many routes that criss cross the state at rates that would amount to little more than pennies on the dollars that it costs to construct those networks.

Among fiber, wireless technologies, and even satellite technologies (did you know that LPB owns a piece of a broadcast satellite in geosynchronous orbit?), there is no excuse for any Louisiana business, residence or public institution to be without broadband technology — and I'm not talking about residential grade DSL which is just an insult masquerading as bandwidth in the hands of phone companies.

About the only thing worse is to have ideology masquerading as public policy. That is precisely what is going on when the first concerns expressed are for the well-being of the phone companies, rather than for the businesses, residents and communities that could otherwise be served by the bandwidth that could be delivered via the fiber assets the state now owns and/or could cheaply purchase.

Why should the state be concerned about the fate of BellSouth? As the state's primary telecom contractor, BellSouth has seen to it that the Office of Telecommunications Management (OTM) operates as little more than a wholly-owned subsidiary of that company. OTM sells telephone service to other state agencies. According to a series of reports by the Legislative Fiscal Auditor, OTM does not have the analytical tools at its disposal to determine if they are being (or have been) properly billed for services for which they paid the telecom companies.

Why this was allowed to take place becomes clear when you realize that OTM is funded exclusively by the profits it makes off of services it sells other state agencies. That is, the more they are charged, the more they can charge their 'customers,' and the more money OTM, in turn, makes. What is missing from this arrangement is ANY incentive to control or otherwise check costs.

A basic rule of life is that the status quo exists for the benefit of some; the identity of those beneficiaries can sometimes become known when the status quo is questioned or attacked.

The state is spending somewhere in the range of $60 million a year right now on voice, data and video services. Just about every penny of that money is going into the coffers of BellSouth and other investor-owned phone companies.

There are technologists out there who will tell you (as they told me three years ago) that, using this state fiber and soft-switch technology, the state could cut about 35 to 40 percent from its existing telecommunications bill — ANNUALLY. That is, the state could save about $20 million per year on its telecom services bill if only it would recognize the value of its assets, use some new technologies, and act in the best interests of itself and the tax payers of the state.

Voice over Internet Protocol (VoIP) technology is at the core of this new telecom technology. As stories about increasing corporate adoption of VoIP technology show, not only are there straight dollar savings to be garnered, VoIP also delivers entirely new functionality and productivity to the desktop of users. So, thinking only in terms of the potential $20 million in annual savings vastly under estimates the potential impact of VoIP technology on the operation of state government. Not only could the state save money, but it could actually operate more efficiently.

I read somewhere recently that the state faces a $1 billion deficit about two years out from now. Gee! You would think that new cost-saving, productivity enhancing technologies such as VoIP would be getting a good look by state government.

You would be wrong.

The folks at OTM (that is, the folks who have the greatest stake in maintaining state government's telecom status quo) have actually gone out of their way to prevent the potential of VoIP from becoming known in state government. OTM helped kill a VoIP pilot project at McNeese State University a little more than two years ago at a time when universities in other states were just beginning to garner headlines for their VoIP network success stories. Thanks to the obstinacy of OTM and its leadership, for a couple of years there was not a single state VoIP project afoot in Louisiana. I have not checked recently; that may have changed. I doubt it.

OTM later went so far as to have VoIP equipment removed from the list of approved technologies on the state telecom equipment bid list.

This was no accident. These unnecessarily exorbitant telecom bills that continue to burden the state are the deliberate result of a state bureaucracy that placed its own interests — and those of its corporate patrons — ahead of the best interests of the state and state taxpayers.

A few years ago, back in the early days of Mike Foster's second term, the office of state Chief Information Officer (CIO) was created. A good man, Jim DuBos, was named to the post but decided he was financially secure enough that he did not have to put up with the smear campaigns that sometimes pass for legislative inquiries in our beloved state. So, he quit. The position, along with the Office of Information Technology, was created but it went unfilled for several critical months.

During that time, the office was transformed from that of being a "change agent" — as originally envisioned — to that of being a captive of the very bureaucracy it was designed to change. Opportunity squandered.

The office was ineffectually run during the remainder of Foster's second term and has remained vacant for most of this first year of the first term of Governor Blanco.

The problem is that with this matter now garnering some interest, there is no one within state government who can articulate the right questions that need to be asked by the Governor and by legislators interested in tapping the potential of these network assets (currently owned and others within easy reach).

And, if you can't ask the right questions, it is highly unlikely that you'll get good answers.

Three years ago, I was contracted by the Division of Administration to conduct a review of the state's fiber assets and outline the potential of those assets to state government. In the process of performing that work, I interviewed people at OTM about their operations and about the potential of the same state fiber assets that have now drawn the attention of the state's leaders.

I was told point blank by a network manager at OTM that he doubted that the fiber had any value to the state; that he could get bandwidth pretty cheaply from BellSouth through trunk lines.

This is precisely the thinking behind the decisions to kill the VoIP project at McNeese. This is the kind of thinking behind the removal of VoIP equipment from the state bid list. And it is precisely the thinking that insists on putting the interests of incumbent phone and cable companies ahead of the interests of the communities of this state.

The right questions to ask are: How can this technology infrastructure transform state government? How can this technology infrastructure transform the businesses and institutions in communities across the state? How can this infrastructure be used to bring new community and economic development opportunities to all areas of our state, particularly rural areas?

Those are the right questions to ask. If there is a role for private sector telecom companies to play, then let's give them the opportunity to identify that role and, if it is consistent with the answer to those first questions, let's let them play. But, putting their interests first requires putting the interests of the state and our communities further down the line — and that's exactly how we earned our reputation as an inefficient, technological backwater that we have lately been working so hard to shed!

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