Tuesday, July 05, 2005

"Fiber-to-home benefits touted"

The tech-savvy in Lafayette can quickly recite the benefits of the proposed fiber to the home and business project: greater bandwidths, 100 megabits per second, faster upload and download speeds.

But, the fiber-to-the-home and business issue garners a less than enthusiastic response from those who may not understand what all the fuss is about or what's at stake.

As a pro-fiber partisan you have to like that lead. Today's Advertiser article focuses on some of the benefits claimed for fiber and sets it up in a loose he said/she said format. What makes this particular instance somewhat more interesting than the usual story in that genera is that there is a much richer chorus of voices. At least on the profiber side the diversity was striking, but even Cox managed to have one new "official spokesman" that I hadn't noticed before.

The story covers job, small business and home uses, and --my favorite--cost savings.

Recently the opponents have tried to make an issue, in various ways, of LUS's promise to dramatically lower rates by 20% when they enter the market. Where these objections even have any pretense of substance they rely on the ideas that telecom, and especially cable is a competive industry with reasonable, competition-based pricing. That just isn't so. Cable is an effective monopoly in 95% of its footprint. It's not (just) me that says so. And its not (just) a bevy of economists. It's the facts of the matter. Research shows that in that 5% of the country where there is competition between cable companies that prices average 17% lower than they do where there is one cable company. That 17% is monopoly profits...by definition: the margin of profit the industry takes that is beyond that which would be available if competition were in place.

So not only is a price drop in the 17% possible; it is practically inevitable. Let no one shed croccodile tears for the incumbents when LUS's presence forces them to lower their prices...those prices have been far too high for far to long. The delicious thing about this is that by getting out in front of the price slashing that was pretty much inevitable and dropping the price to a competitive one at one blow LUS does itself enormous marketing good. They give the people lower prices and the "others" are always struggling to meet LUS "deal."

In fact the LUS plan is already saving you money, and the article alludes to it:

Cox Communications recently announced it was raising rates in the Baton Rouge area because of higher programming and fuel costs. Cox spokesman Gene Regan told The Daily Advertiser in May the company has no plans in the near future to increase rates in the Lafayette or Acadiana area. Calls to Cox Friday to find out why rates will not be raised in Lafayette went unanswered.

It's no wonder that Cox doesn't want to talk about it. What they told Baton Rouge was that higher programming costs and higher gas prices had forced them to raise their rates. That sounds reasonable on the surface. Until you realize that Lafayette has the same gasoline and programming costs that Baton Rouge does. Why no raise here? The spector of competion.

It's already saving you money.


(Want more on the cable monopoly? I've got more. But so does the Consumer's Union.)

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