Friday, June 17, 2005

"BellSouth, Cox join fiber talks"

If I read this article in the Advocate correctly the administration is taking a pretty smart line with BellSouth and Cox's latest "proposals" for a partnership on LUS' fiber optic project. A few quotes and then a few comments: partnership is likely without a successful "yes" vote July 16 on LUS' plan to borrow up to $125 million to enter the business, Durel said.

"The No. 1 objective is still the election," Durel said. "If we lose the election, we don't get another phone call (from BellSouth and Cox)..."

"The substance was much more significant this time," Durel said. "It didn't all revolve around 'you can't do it, you can't afford it and you don't need it.' "

Instead, both companies said they'd "like to be a part" of the LUS plan, Durel said...

Durel said he believes both companies may have realized that people in Lafayette support LUS' plan and that partnering could be beneficial to both parties.

"I think they recognize that our vote is looking pretty good," Durel said. "This train is about to get moving..."

But a potential future partner needs to "act like a partner," Durel said.

It would go a long way for one or both of the companies to "stand up together" with LUS and endorse a "yes" vote, Durel said.

"It would be easier to work with them," he said.

As I opined yesterday, I think history ought to be our guide in interpreting this overture from Cox and BellSouth. The last time it looked like the crucial decision in the council was about to be made in favor of the plan the incumbents trotted out a plan that simply reasserted their publicly announced technology plan. Nothing particularly special was offered to Lafayette except vague promises of faster delivery of that technology and maybe some special "trials" in here. (An article in today's Advertiser suggests that this may be the pattern again today.)

But what is interesting about the above series of comments is that it suggests that Durel has decided how to play this game to the advantage of the referendum. If you are for LUS providing the services you should vote for the referendum. If you are for a partnership, you should vote for the referendum. If your secret hope is that the private providers will just step up to the plate and offer to Lafayette what Lafayette so clearly desires, you should vote for the referendum. It's being played as a sign (and it is) that the incumbents recognize that as things stand now Lafayette will win in the referendum. So if you want to stick with the winner, vote for the referendum.

And, of course, quite prettily Durel has shifted the ground from their feel-good "making an offer" (however faux) to their backing up their spoken intentions to be "good partners" with the challenge of actually supporting what the city desires. If you want to be a partner, it would be a lot easier if you weren't fighting the project you pretend to want to partner with tooth and nail. There is an earthy phrase: put up or shut up.

But the bottom line has to be that the modern infrastructure, all of it, has to be owned and controlled by the people of Lafayette. That is what the fight has been over and that is what we must be left with, whatever sort of deal BellSouth may wish to cut to improve what is shaping up to be their third-best position in Lafayette. The people of Lafayette must be left with a framework that increases competition, not one which merely cuts the city in on the current duopoly deal.


GumboFilé said...

This doesn't change my view, but I must admit that the political advantage on this point goes to LUS. I must also admit that, though I still oppose it, a partnership would be preferable to an LUS telecom utility. That being said, I have little hope that a partnership will be achieved.

I still hope to make it to a Fiber Jam. How have they been going?


GumboFilé said...

ps, I don't think there is enough trust on either side to achieve such a partnership. dsh

John said...

Mr. Hays,

I think you are basically right about this. The bridges have been burned.

I doubt if there is any realistic way to bring Cox on board. Not only is the trust that makes a partnership feasible not there but the objective interests of the two parties are implacably at odds.

BellSouth, on the other hand, would be wise to rent bandwidth for its products on LUS fiber. It could trial all its next generation products here, where the available bandwidth would let it develop products a full 5-10 years in advance of its capacity elesewhere. Market testing such products in the only realistic market available could save them company-damaging mistakes down the road. Enough so that, were I them, I'd take the hit on my pride and simply become Lafayette's biggest wholesale provider. They might even hold onto some of their old phone lines if they did so.

I am only for a partnership which increases competition and maintains public ownership of the underlying natural monopoly infrastructure. That, for me, is what justifies the public movement into this area.

Anonymous said...

John: "I am only for a partnership which increases competition and maintains public ownership of the underlying natural monopoly infrastructure." I hope you will think about who you are sending that message to. I assume it is to Durel and Huval. To ensure what you want and make sure future administrations and LCG give you what you want, you will need 3 things:
1. dedicate the $125 mill to the fiber.
2. dedicate the in lieu tax to pay for the fiber.
3. open system to increase competition.

In my opinion, if these things are not done, the politicans and the corporations will come to common ground around the money. Some one will say, "why spend the bond money to build out redundant fiber, lets just make a deal with the guys that already have fiber". The choices will come down this; price war and losses for everybody, or cooperation and profits for everybody. The city will be able to borrow $125 mill through LUS and collect the in lieu tax, bell and cox will continue to dominate our market for services and hold out competition.

What did gumbo call it "unintened consequences"?

Anonymous said...

forgot to sign