Saturday, December 30, 2006

AT&T buys BellSouth; Net Neutrality Conditions

AT&T will be our new telecom overlords.

AT&T's (nee SBC) purchase of BellSouth was made certain yesterday when the FCC's Democratic commissioners forced Net Neutrality, wireless data competition, and other conditions on AT&T in exchange for allowing its combination to go through.

Expect a new name on your phone bills. (And a new funder for anti-Lafayette lawsuits--AT&T/SBC has, if anything, a worse history than BellSouth in regard to such legal tactics.) The name of our new phone overlords is the biggest news for Lafayette in the event. For the rest of the country the news is quite different. Says Columbia's Tim Wu on the website says:
To the lay reader the AT&T merger agreement may appear highly technical. It is, however, a milestone, and may even be remembered as an important moment in Internet history. Most notable is the agreement's striking inclusion of the first strong Network Neutrality language yet seen in any broadband regulatory device.
As hopeful as that is it should be noted that this Net Neutrality requirement is mainly establishes a precedent. Congress will have to act if the internet is to be protected from the sorts packet prioritizing charges that the CEO of AT&T has promised.

Yesterday's conditional approval by the FCC was the last step in what had once looked like a completely unconditional approval by Federal authorities. Most disconcerting to many was the unconditional approval by the Justice Department--charged with enforcing anti-trust laws--of a merger that will make AT&T the largest telecom company by far. The LATimes reports that:
AT&T would end up managing more than a third of the nation's land lines and dominating local service in California and 21 other states. It would hold 23% of the broadband Internet market, leave nearly 95% of the offices in major cities without real choice in service and run the nation's largest cellular carrier, Cingular Wireless.
AT&T's political might already is unrivaled in its sphere. In the last eight years, it has contributed more to federal politicians and spent more on lobbying than the entire cable and satellite TV industries combined — and more than any communications, media or technology company, according to the Center for Public Integrity.
It's no surprise, then, that AT&T generally gets what it wants. What made a difference this time was a combination of last November's sweep of Congress by the Democrats and a conflict of interest by the deciding Republican member of the FCC that resulted in his not casting a vote. Deadlocked for months while the FCC chair, Martin, maneuvered to allow the Republican with the conflict of interest a special dispensation to vote. When he was finally allowed to do so he decided that--allowed or no--he'd be better off not voting. That decision was no doubt influenced by blunt language from incoming Congressional leaders to the effect that he really shouldn't be looking for, or accepting, a special dispensation. When he finally refused outright to vote on this matter AT&T moved quickly to accept the compromise we see today.

They're several more conditions beyond the net neutrality question. The FCC also imposed temporary pricing controls on inexpensive DSL and on the sorts of lines AT&T's competitors use for backhaul.

Also significant for people in the BellSouth footprint was the requirement that BellSouth divest itself of all, all, of its 2.5 gig spectrum. That might turn out to be more important than it appears on the surface as it will mean that around here the new AT&T won't own that significant chunk of the wireless spectrum. That divestiture is the most secure and permanent promotion of competition in the order.

Thursday, December 28, 2006

"Tech dreams become reality"

In today's article "Tech dreams become reality" the Advertiser initiates a series on the local economy with a piece that touts technology as the basis for future growth—and portray's Lafayette as having a leg up on most communities.

The story focuses on LONI, LITE, and the Fiber To The Home projects. The first two of those made significant progress during '06. LONI, the Louisiana Optical Networking Intitiative, links projects in Louisiana to each other and to the next generation internet. That project became a substantial reality this year. LITE, the Louisiana Immersive Technologies Enterprise, opened for business this year and its advanced visualization resources promise a wealth of spin-off projects.

UL's role in the technological life of Lafayette is underplayed—in this story and more generally—while ZEKE, the new supercomputer, is mentioned in the sidebar and as one more valuable tech resource, the really valuable resource the university offers is simply the intellectual center that any university represents. Lafayette's tech nexus offers advanced computation, networking, and modeling resources. But for those to be valuable they must be used. And for them to be valuable to Lafayette in a substantial way they need to be used by people in Lafayette. By far the largest body of folks eager to apply cutting edge tools to their life's work lies in academia. We need to make better use of that more generalized resource. (see "background remarks" below)

Unlike LITE and LONI Lafayette's Fiber to the Home Project (LaFTTH?), hung up in lawsuits designed to delay it, didn't make significant progress in 2006. The current lawsuit is in its final appeal in the Louisiana Supreme Court. If Lafayette can get what it wants out of this decision there is nothing else to stop the bond sale and subsequent construction of the system. From Keith Thibodeaux, Lafayette CIO:
"We're at the point now where there's going to be a decision. It's hard to get excited about something when it's hung up in the courts for months and months. But certainly a lot of people have not lost the fire and the desire for what it could mean," he said.
Thibodeaux said fiber-to-the-home is the last link needed to make the city's technology future really take off.
I'd go considerably further than that....the project is the real differentiator and the real powerhouse for Lafayette's hopes of a technology-driven future. We must find a way to implement what the community has voted in. Neither LONI, nor LITE, nor the university are unique in and of themselves. In combination they are formidable but, frankly, benefit only a segment of the community and are not enough of a differentiator in and of themselves to remake our future. Fiber to the home, done right, will make a difference on every block in the city and potentially every street in the parish. It could put full access to LITE (and similar institutions around the world) and a 100 megs or more of connectivity to next generation internet through LONI or our own direct connects into every garage startup in Lafayette. At prices real people, not just big corporations, could afford. The value of any technology, and especially any communication technology, lies in its widespread use and the things people learn to do with it that its originators didn't imagine. (The internet is considerably more than a nuclear-hardened communications system for controlling NORAD....or even passing bits of academic research back and forth.)

Fiber to the home and what Lafayette's people are encouraged and allowed to do with it are the true key to a tech future for Lafayette. Everything else represents valuable but temporary buisines advantages. FTTH is a permanent structural difference. Eyes on the prize folks.

[timeout for background remarks]
I've talked with enough folks here in Lafayette to know that in tech business circles there is a feeling that innovation arises in business and that academics, with a special emphasis on UL's academics, are dubious partners. That is simply not true and the attitude gets in the way of the sorts of collaboration that are possible--and I think crucial to the tech business community's own success. With apologies to the business community, academics are much more likely to pursue new tools than are the business community. Researchers are rewarded for simple risk-taking if the endeavor doesn't fail obviously and dramatically and appears to have some downstream hope of success. Business folk are looking for immediate payoffs and are punished unmercifully for deferring immediate success for dubious long term payoffs. This structural difference between business people and academics make university people the canary in the mine for business--they are able to take risks and experience failures that more risk-averse businessman simply cannot afford. Lafayette business ignores and excludes its academic resources at a terrible risk to itself.

It is true that academics are hard to understand and do not necessarily act in predictable ways...or at least not in ways the business community finds easy to predict. Truth is they simply do not care much about the sorts of motivations that drive business people. Success is measured differently in the intellectual community and while academics generally understand the difference (being in the minority in our larger culture) business people generally do not and tend to be unwilling to respect what their academic "partners" do to become successful in the university world. The usual business solution is to ally solely with those in the university whose motivations are most "entrepreneurial." This is a mistake in that it forfeits much of the value making alliances with academics.

Long story short: Encouraging academics to make creative use of these resources for their research and service projects is the quickest path to both full usage of the resources and the development of models of technology use that work for Lafayette. I'm not sure that Lafayette's tech business community gets it.

[/background remarks]

Wednesday, December 27, 2006

"Justices let LUS add brief in case"

The Advocate's Kevin Blanchard has a story in this morning's paper that reviews the latest in the LUS Fiber to the home lawsuit—the court accepted additional written arguments from LUS. From the article:

The brief expounds on points of law raised in questions by justices when they heard the case Nov. 28.

“Due to the diverse and extensive questioning from the Court during our oral arguments, we felt it was in the best interest of Lafayette citizens that we further explain the merits of LUS’ Fiber-to-the-Home initiative,” city-parish attorney Pat Ottinger said..."
This story emphasizes questions from the judges that focused on the consequences of accepting the plaintiff's argument that all loans are prohibited. That interpretation, Lafayette and at least some of the judges thought, made the law absurd—it would effectively prohibit building the project at all. That's not what the law says its purpose is. (As I've mentioned before this is one of those situations in which the meaning of a law is supposed to be found in part by eliminating those interpretations which would defeat the law's clearly stated purposes.)

Keep those candles lit...we need the right outcome on this one.

Monday, December 25, 2006

FCC "Ruffles Feathers"

TV Technology NewsBytes posts a refreshingly unrespectful recap of the FCC's recent order. This is the link to follow for an update with a bit of zing. A qoute from the National Association of Telecommunications Officers and Advisors, better know as NATAO, natch:
"Today, the FCC played Scrooge to local governments when they changed the agency from a regulatory to a legislative body," said Libby Beaty, executive director of NATOA. "Unfortunately, unlike Scrooge, it's highly unlikely the FCC will see the error of its way absent court or congressional intervention. We will look forward to providing them both opportunities."
And a bit from a dissenting Commissioner's remarks I've not seen elsewhere:

Shyeah, Commissioner Jonathan Adelstein kind of said in his unabridged statement, which is not posted online.

"I cannot support this order because the FCC is a regulatory agency, not a legislative body," he said. "In my years working on Capitol Hill, I learned enough to know that this is legislation disguised as regulation."

Hopefully this affair will serve notice that simply servicing the phone companies and loudly claiming it benefits the public will be meeting with more resistance than it did in the last 6-10 years. The FCC and Commissioner Martin would be well-served to recognize the new realities.

Saturday, December 23, 2006

Additional Arguments Accepted in Supreme Court Case

The Advertiser this morning carries a brief story reporting on a additional filings that Lafayette made in the Naquin bond case.

That post-oral argument filling is, as I understand it, unusual. There is no discussion of what points the city made, much less why this unusual step was taken. The closest the article comes to reporting on substance is a quote from Terry Huval:
"We wanted to provide them with some additional information to help them keep everything in perspective, since it is a complex matter."
Frustratingly uniformative.

Huval is also careful to warn that no one knows when the court will render a verdict.

All we can do is wait......

Friday, December 22, 2006

"FCC kills build-out requirements"

Ars Technica does it again. The tech site displays political savvy that is completely missing by traditional newsgathers like the NYTimes and the LATimes, to wit:
"But more importantly, the vote does away with most build-out requirements. Those requirements generally insist that companies offer service to all the residents in the town, rather than cherry-picking the profitable areas "
That's in reference to Wednesday's partisan FCC decision that handed the phone companies, but especially AT&T, what they couldn't win in Congress: Federal control of the local franchises. Wireline cable TV providers have paid for the right to use public property to get their lines to customers. The elimination of the community's ability to insist on full buildout in its boundaries in trade for the use of its property is, As Ars Technica insists, the most important issue.

The FCC's move remains murky since the Republican majority voted in the change without releasing the "details" to the public. There will be a 90 day "shot clock" on local negotiations. (What happens if they can't reach an agreement? The corporation is allowed to just take what it wants? It's not yet clear--but probably.) The order will not allow local communities to propose "unreasonable" buildout requirements. (Hmmn. What's unreasonable? Anything that the corporation won't agree to during that 90 day window? It's not yet clear--but probably.)

One thing that is clear is that municipalities and consumer groups are revving up to sue, claiming that the FCC doesn't have the authority to issue the sort of extra-legal change in policy. (BusinessWeek bemoans the upcoming era of litigation.) The incoming chair of the House Subcommittee on Telecommunications and the Internet, Ed Markey, has made it clear in a message remarked on in Ars Technica that he felt the FCC had overstepped its bounds by aiding the phone companies end run around Congress:
Markey worried that the FCC had upstaged Congress by taking the matter into its own hands after Congress failed to pass pending legislation on the topic earlier this year. "Overall, I believe the haste with which the Commission has acted may lead to problematic and unintended consequences," Markey went on to say. "In some instances, the Commission may be acting without clear legal authority." Markey then said that he looked forward to "reviewing today's decision and examining its implications for consumers, communities, and competition next year."
It's not over till its over...Congress has yet to weigh in. What you can do is write your Congresscritter and suggest that turning local property and local decision-making over to partisan federal bureaucrats was not the sort of thing they should be allowing to happen on their watch if they'd like to be re-elected.

Visit Boustany, Landrieu, and Vitter's web contact pages and write 'em a little note.

Wednesday, December 20, 2006

"Suburbs against the U(ni)verse"

Ars Technica is the surprising location of the absolutely best article I've yet to see on the video franchise issue. It discusses, in detail, the conflict between AT&T and suburban towns outside of Chicago. If you want to understand what is beneath the main media stories that present a "balanced" repetition of competing press releases this is the story to read first. --And since this conflict is coming to Louisiana and Lafayette you might want to set aside the time to develop a little background.

As has been true before our sister-in-arms city, Geneva, is giving us an advance view of trouble headed our way. Phil Peter and Annie Collins' experience with AT&T's tactics in Geneva during a fiber referendum that was beat back by push polling, a blizzard of misleading FUD motivated the "innoculation" tactics successfully used by Lafayette Coming Together in our own fight. We owe Geneva a lot...and it looks like they're out front again. When AT&T buys BellSouth we'll be dealing with exactly the same tactics here in Louisiana that the suburban towns near Chicago are dealing with today.

In a nutshell: AT&T claims that their new cable-work-alike Uverse video offerings are not really cable TV and so they don't have to mess with the video franchises that cable companies have to in order to offer cable TV services. This is there claim wherever they introduce the service--and it was their claim here in Louisiana during the last general session. But the suburbs of Chicago aren't buying it. Disturbed by the secretive deployment of new, large, and ugly DSLAM boxes to support the video offering and insistent that AT&T follow the same rules that cable companies have to follow and offer the service to everyone in their town if they want to use the towns rights-of-way, the towns have refused to allow the installation of the boxes that would support the service. AT&T has sued.

There are two ironies here-- First, the phone company now claims that its fiber upgrade is necessary to offering moderns services when it recently fought two attempts of the Tri-Cities to do do real fiber, calling it "unnecessary." Second, AT&T wants to deploy in parts of these relatively wealthy suburbs and not in Chicago at all right now as part of its larger cherry-picking plan. The objection to state-level plans such as the one suggested in Louisiana last year, was that we all thought that wealthy suburbs would get it and less profitable areas would be ignored. (Cravin's speech) AT&T's move in Illinois makes it clear that concern was valid. They are only preparing to deploy in wealthy areas like these Chicago suburbs. You'd think AT&T would agree to serve all of at least these sorts of communities. But they won't and the towns, with a relatively active and aware citizenry are not willing to approve cherry-picking within their privledged areas. If that proves generally true it could prove disasterous for AT&T 's business plan. (Hence the attempt to get the FCC to clear their path...see yesterday's post.)

Do take a look at the full text of the story and rest assured that we'll be faced with these issues ourselves soon enough.

(Don't miss the comments both at Ars Technica and at Slashdot where the story was referenced. Seeing intelligent, thoughtful commentary on news stories is really refreshing.)

It's great to see such a story on the web. Ars Technica has long been the premier place to get well-written articles on arcane technical issues. (It's the absolute best place to read up on user interface issues in new revisions of operating systems, for those that care.) But Ars Technica has begun applying its intense, exacting, methodical style of reporting to the social and political issues that touch upon the technical core that defines its readership.

We should all be grateful--it leads to well-written articles, which do not try to fit themselves into some sort of pre-defined length, and that are intended for a readership the author regards as competent. That alone is refreshing. But even more invigorating is the presumption of their technically-oriented authors that the point of exploring an issue is to come to some sort of reasoned, sensible conclusion. Modern reporting conventions lead to mushy stories that report both sides of any conflict as if there were no basis for actually chosing between the positions espoused by the different sides's press releases. That is seldom true--as we became aware of during Lafayettes fiber referendum. This suburbs article accurately recounts both sides--but doesn't hesitate to call one sides nonsense nonsense, if that is what is called for. For instance:
When asked about Wheaton and Geneva's six- and three-year time frames, AT&T's Rob Biederman responsed, "Requiring new competitors to build their networks everywhere immediately will likely mean they cannot afford to build their networks anywhere." This is probably true, but is not what any of the people I spoke with were suggesting.
How refreshing! The author notices the little deceptive slide and doesn't hesitate to point it out to the reader. Standard reporters just repeat the misleading reply with poker-faced even-handedness. The reporter also doesn't hesitate to point out that much of the argument for "competition" is being made by organizations that are funded by the phone companies even while they present themselves as grassroots organizations.

Good stuff.

Tuesday, December 19, 2006

FCC Sides With Baby Bells: News & Action

The News:
There's been a rising tide of articles on the net, (e.g. B&C, Alliance) breaking out into major media over the last week (AP, Reuters) on the subject of the FCC chairman's attempt to end-run Congress on the subject of authorizing a federal regime to regulate local video franchises. He proposes to set a time limit on how long a locality can

The FCC Chairman, Kevin Martin, in the aftermath of the collapse of Senator Stevens' ("the internet is a series of tubes") attempt to overhaul telecom law in the last congress has come up with a novel idea: if the big business that the FCC exists to regulate can't get what they want from the representatives of the people, well, why not give it to them through the regulatory process?

Some Background:
The idea of the FCC doing an end run on Congress is by itself an astonishing exhibition of partisan arrogance and an overweening will to bureaucratic power.

Martin is suggesting that the FCC take up the failed phone company effort to create a federal video franchising regime and meet their demands through purely regulatory channels. Such a program would replace the current system where the owners of the local owners of the rights of way (usually municipalities) negotiate non-exclusive "franchises" to use that property with cable companies. Phone companies hoping to roll out a video product desire this simply because they want the ability to "compete" with established cable companies on unequal terms. Long time readers will recognize "video franchising" as a battle which the phone companies have been waging at every level of government. (examples: 1, 2, 3) In the process citizen interests in real competition and local control are lost. In Louisiana a bill to move franchising power to the state level was vetoed after intense opposition from local government and citizen's groups (including Lafayette Coming Together and this blog). Readers will have also seen posts on Steven's federal version of the same bad idea which was opposed by a wide range of pro-consumer groups.

The objections are both structural and practical: Taking local control of local property and turning it over to either state or federal government in order to serve the interests of a single major phone company in each region of the country is, on its face, an unconscienceable use of power. It is a taking of the property rights of local communities, one of the few remaining income sources local governments have, and turning that over to huge monopolies that have no sympathy for local interests. That is a structural mistake of the first order and should be enough to defeat the idea without further discussion. (The utter lack of "conservative" opposition to this "taking" is a index of how unreflectively subjugated the movement has become to anything big business wants.) Political practicality, at least at a local level, mitigates against the phone companies ideas as well. Local politicians will rightly never agree to the basic demand the phone companies are making: to use public land to serve only the mot profitable parts of the community. The key and crucial issue on which the phone companies have been unwilling to compromise is what the feds call "build-out requirements." The media in general have yet to quite figure this one out, and some stories neglect to mention it. But the one overriding reason the phone companies have for eliminating local control is the requirement of local communities that, in exchange for using local property owned by all the people, the phone companies ought to serve all the people. In various places the phone company has been willing to compromise on every other issue from costs to services provided, to additional PEG channels for local use. It has never been willing to compromise on restricted service. Universal public service in exchange for the use of public resources has been the deal made by both the phone companies and the cable companies from the beginning of their history. The phone companies want to break this compact in order to gain a competitive advantage over their entrenched cable opponents. (For a fuller explanation of how this works see "Sharks.")

In normal circumstances there'd be no question but that such a suggestion from the bureaucrat in charge of executing (not making) public policy would be deemed inappropriate and slapped down hard. Especially if it followed the legislatures failure to endorse the same concept. But these have not been normal times. The previous Congress, already going down in history as a prime example of a "do-nothing" body, had developed a sly (we'd say canille) form of making sure that its large corporate special interests would get what they wanted without our Congressment needing to dirty their hands. All that was required was to gut regulatory agencies, replacing long-term servants with new, partisan leadership whose mandate was clearly political: to simply refuse to actually do the regulation and oversight of the buisness community for which their departments existed and which the law requires. With the bureaucracy remaking federal policy by fiat the Congress was relieved of the uncomfortable necessity to actually change the law in order to change Federal policy.

Nifty eh?

Seen in that light the FCC chairman's willingness to substitute bureaucratic action for new laws is not so surprising. It just a continuation of business as usual.

Trouble is that was the way the previous Congress worked. The new one might well not appreciate having Martin substitute his idea of what best benefits the phone companies for Federal law. It is already objecting Martin's attempts to get an ethics exception which would allow one of the Republican members of the FCC to vote with Martin to allow the AT&T/BellSouth merger to go through without any conditions. Congresional leadership has written Martin letters suggesting that wouldn't be a good idea and have made noises about holding hearings on the merger. So far Martin has wisely declined to defy the Congress.

But this latest game suggests he really doesn't quite get it yet.

Take Action:
Acadiana Open Channel (AOC) head Ed Bowie recognizes the threat the FCC poses to local public access channels like AOC. Those channels are provided for in the local franchising agreements which Martin would like restrict. While local folks understand the value of local programming--particularly in unique cultural situations like those that exist in Lafayette. it is doubtful that distant Federal bureaucrats can be counted on to protect our interests.

The FCC's suggestion would put local programing and local universal service at risk merely to serve the a few companies like BellSouth. At this point the only people the FCC is likely to listen to is our congresscritters.

Ed suggests in a recent email that you participate in the Alliance for Community Media's web-based protest. He also provides links to the Boustany, Landrieu, and Vitter's web contact pages. A letter posted from your representatives own sites would probably be even more effective than using the Alliances form.

These folks are supposed to represent us. Let 'em know how you feel...and let 'em know that you expect the new Congress to loose the "do nothing" ways of its predecessor.

Friday, December 15, 2006

BellSouth-AT&T Merger Good for America?

A friend of LafayetteProFiber from California recently forwarded the link to a post on that dealt with the AT&T-BellSouth merger. (Thanks, Jeff!) BellSouth and AT&T have claimed that their merger is in the public interest--basically reasoning that bigger is better. Isenberg remarks on a filing by Sumit Majumdar in the FCC review of the merger that contests AT&T's position that the merger is good for the country. Majumder qoutes AT&T as claiming:
the merger will solidify and secure the nation’s status as a world leader in telecommunications and that it will strengthen national security. And we have shown that all of these benefits will be realized without any cognizable harm to competition
That is just nuts. How a major telecom consolidation benefits national security or can be not harmful to competition runs up against common sense. Eliminating a major competitor by absorbing their entire base has got to be, on the face of it, anti-competitive. That is so nuts that mostly nobody feels obliged to contest the obviously self-serving claims of the companies involved. Majumdar is not so sangine...he actually does the hard work of demonstrating that in the past such mergers have emphatically not benefited the public. But Majumdar goes further: he, in his academic way, claims that the evidence indicates the real reason for consolidation is to gain raw market power--that is to achieve a monopoly status that will allow the company to make larger profits without any of the benefits to the public that accompany price increases in truly competitive situations. That's the gist of the challenge in the following paragraph:
We have started with the expectation that if market power acquisition was, indeed,
not the motivation for the mergers we would see no changes in relative cash flows that were
generated by revenues. On the other hand, we would observe significant cost declines and
significant improvements in measures of technological progressiveness. If market power was
the true motivation, then we would observe enhancements n relative cash flows that were
enerated by revenues reflecting the exercise of market power due possibly to price
increases. We would also observe no efficiency gains. Neither would we observe any improvements in measures of technological progressiveness.
The evidence shows that it is increased market power, (e.g. increasing levels of monopoly power) that is the real effect of telecommunications mergers.
Our comprehensive analysis, which is the only empirical evidence on the question
that we are aware of, in which we have used several performance measures and stringent
statistical procedures, has revealed that mergers have not created the expected synergy
effects. Mergers have led to possibly increased market power. What has increased for the firms have been their ability to generate relatively higher revenues. No sales volume growth
is noted; hence the revenue increases are due to likely price increases. No cost efficiency
gains are noted at all. In fact, the most important measures of operational performance have
deteriorated in the post merger period. Under investment of technology, especially
broadband, is observed following merger activities. Expectations that mergers will lead to
increased investments and up gradation of the communications infrastructure, and for
technological progressiveness of the US telecommunications infrastructure, have been
vitiated. (emphases mine)
In short the AT&T merger with BellSouth is only likely to be good for the new, more powerful AT&T--not because the larger body is more efficient or more innovative (Majumdar's research indicates otherwise), but because the larger entity, operating in a less competitive field has "revenue increases [that] are due to likely price increases" unaccompanied by service improvements.

So we here in Lafayette should not expect the benefits of efficiency, better service or a more innovative company to emerge from the AT&T/BellSouth merger the current administration is so eager to complete.

On the historical evidence, all we can expect are price increases.

Tuesday, December 12, 2006

AT&T's Explosive Growth (coming to a BellSouth DSLAM near you?)

Light Reading magazine has an interesting article about a recent explosion in an AT&T DSLAM cabinet (you know, the big boxes where their fiber to the neighborhood will connect with their copper to the home?).

Here are a few key paragraphs:
AT&T Inc. (NYSE: T - message board) is still searching for the real killer of its Houston DSLAM cabinet, which exploded back in late October, flattening an old man's fence and sending shrapnel hurtling as far away as 50 feet down the street. (See AT&T Investigates DSLAM Explosion.)

"We continue to thoroughly investigate the possible causes of the incident, but it's still too early to speculate on the outcome of our testing," writes an AT&T spokesman, in a reply to Light Reading's inquiries.

The spokesman says AT&T has assembled a strong forensic team and is working with "one of the world's top independent technical analysis firms" to gather evidence and probe the mysterious circumstances surrounding its broadband flambé. He adds that tests are time consuming and the company can't talk about the details of the investigation while it's ongoing.
Typically, the company first pointed the finger at others:
In the early going, AT&T said it would check on all the things that might have caused the explosion. AT&T in November said gas leaks, electrical issues, and vandalism were possible causes.
But, the problem might be related to some of the equipment used in the network itself:
A non-AT&T source close to the investigation says two causes are being vetted carefully these days. The first is a high-resistance short across the battery terminals inside the base of the cabinet. The second is a possible power supply problem with the Alcatel-Lucent (NYSE: ALU - message board) DSLAM housed in the cabinet.
Could this problem be bigger than Houston? It's possible:
AT&T apparently does know enough about the explosion's cause to say that the DSLAM cabinet caper is not a network-wide concern.
Officially, AT&T says they've got this under control. They are focused on accomplishing their mission of bringing their customers an over-priced, under-performing broadband experience worthy of 20th Century corporate concepts of connectivity:
"We remain confident in our plans to pass approximately 19 million living units by the end of 2008 as part of our initial deployment."
Get ready. The FCC's clamoring to approve the AT&T merger with BellSouth. The biggest change in Louisiana is going to be that many of BellSouth's former lobbyists are finding new jobs. Was that listed as a benefit of the proposed merger?

LONI Touuted as Film Industry Aid

Louisiana's statewide fiber optic network, LONI, is being touted as a way attract more film business dollars to Louisiana. The hope is that LONI can provide a high speed bridge that will allow fast, easy transfer of the huge amounts of video data generated by modern film making around the country so that films shot here could be practically reviewed and processed in other locations while filming was ongoing.

The LONI network connects state research institutions to the new national high-speed backbone, LambdaRail. The LambdaRail provides a testbed for implementing the latest techniques for moving huge amounts of data quickly over long distances.

LONI, which is still under development, already connects to Lafayette and the Louisiana Immersive Technologies Enterprise, LITE. (That's the last acronym for today, thank goodness.) Lafayette's ULL supercomputer, Zeke, will be linked up today:
Guice said the state's network will be online by mid-January. UL will connect its supercomputer Zeke to LONI at a ceremony at the Louisiana Immersive Technologies Center today.
Louisiana has been very successful in marketing itself a film location--chiefly by the mechanism of offering transferable tax credits for projects shot in Louisiana. Baton Rouge and Shreveport are current centers of activity; New Orleans has yet to come back after the storms. Offering film makers a real enhancement to their working conditions makes more sense in the long run than giving away tax dollars--building infrastructure is always a smarter way to attract business.

Apparently the state's fiber-optic infrastructure isn't too shabby:
"The state of Louisiana has the most robust and complex fiber-optics network in the country right now," said Les Guice, Louisiana Tech University's vice president for research and development. He said it could transmit data thousands of times faster than a typical high-speed Internet connection.
To be frank, I'm not sure the claim that Louisiana has the "most" robust and complex system is true--other states are doing their own version of LONI and some of those are online already. But what does seem to be the case is that Louisiana is in the top tier of states nationwide. And that could be a very good thing, not just for the film industry but for any industry that moves a lot of data.

Of course, getting the data onto LONI will still be the issue. Taking full advantage of anything like the full speed of LONI or the LamdaRail will mean that a dedicated, special purpose, high speed fiber optic link to the premises. A "fast" Cox cable connection or even a dedicated T-1 from the phone company won't begin to fill the bill. We're talking a major expense and one that for many locations will not be available at any price. That "last mile" connection will limit the use and value of the LONI bandwidth pretty radically; most companies won't be able to get to it very practically.

The solution to the expense of a dedicated, special purpose, high speed fiber optic link to the premises is, as you may have guessed, a cheap, ubiquitous, general purpose high speed network that is available wherever the company wants to shoot a scene.

A network like the one the LUS fiber optic plan will provide Lafayette; the future center of film production in Louisiana.

(You did see that coming, didn't you?)

Saturday, December 09, 2006

Query...Cox Outages?

Over the last 5 days to a week I've experienced intermittent outages and slowdowns in my Cox service.

Have you?

Until yesterday evening I thought the issue was local, involving either my connection or my aging modem. But then I talked to Mike, my partner on this site, and discovered that he had the same symptoms: Service just goes dead, or gets so slow that even email downloads may not complete, and then comes back. The outages didn't last for hours but for several days service was all but unusable. All without any discernable cause. (Cox has been up steadily since yestereday evening for me, but I'm not trusting it.)

I've talked to Cox service several times and had a very helpful fella out to adjust line strength. Nothing helped. And no mention was made of wider problems. Both Mike and I live just off the Johnson/Louisiana Corridor no more than a mile or so from ULL.

What has been other's experience over the last week or so?

Wednesday, December 06, 2006

GAO: FCC Policies Producing Anti-Competitive Broadband

"The Government Accountability Office (GAO) released a report Thursday suggesting that the Federal Communications Commission (FCC) 's deregulation of business-class high-speed data business hasn't led to increased competition and lower prices in many markets."
That's what Light Reading says about a recent report by the independent investigatory arm of the federal government.

The Gist
The issue at hand is that 6 percent or fewer of potentially lucrative, commercial buildings in densely populated areas that could be sold large amounts of bandwidth actually have anything that looks even vaugely like competition. The GAO is say that the FCC's methods for determining when competition exists lead it to "deregulate" --remove price caps-- when effective competition does not, in fact, exist.

The best evidence that the GAO is right, and the FCC wrong, is that prices ar actually rising faster and higher in those areas where competition and deregulation has occurred than in those where regulation has remained in place and there is evidence that in those areas competition has actually decreased since deregulation occured.

The implication is that the FCC's actions, whatever its intent, is strengthening monopolies and that prices are rising as a result.

The Technical Problem: Method
The GAO report "FCC Needs to Improve Its Ability to Monitor and Determine the Extent of Competition in Dedicated Access Services" only says, as the title indicates, the FCC methods for determining when enough competition has set in to allow "deregulation" to begin is wrong. It yields a false belief that competition exists and provides a poor basis for removing protections that once held down prices to ones that produced only a fair profit. Decisions made on this basis are exposing businesses to monopoly pricing.

The Basic Problem: Ideology
But the FCC's mistake is not merely a technical one: it is ideological; it is faith-based, not reality-based. The FCC has, since the Clinton administration, been populated by those that hold, as an article of faith, that monopolies don't exist unless they are created by the government. Believing this, they think that the solution to all problems caused by monopolies is deregulation.

They are wrong.

This finding is merely the latest in a long series of authoritive independent reports and common-sense observation that show that FCC policies based in their free market faith actually support monopolies rather than open them to competition. The trouble with this faith is, religious certainty aside, deregulation only works when regulation is hindering what would otherwise be a competitive marketplace.

What no one at the FCC (and too few special interest-dependent legislators) wants to admit is that not all markets are competitive. Some are natural monopolies. In a natural monopoly situation giving the monopoly free reign by deregulation inevitably worsens the problem. The FCC's misplaced faith has exposed us all to more, rather than less, monopolization.

Uncritical Free-Market Faith leads to Monopolies
The best evidence that the FCC's faith has failed the test of reality is the "new" AT&T. The reconsolidation of AT&T -- capturing BellSouth is the latest piece -- is being allowed by the FCC on the premise to disallow it would be to somehow regulate a free market entity. Trouble is, neither AT&T nor BellSouth are free-market companies. They don't currently have effective competition in their regional markets and their consolidation does nothing to ameliorate local monopoly abuses. It does create a long-haul data market with fewer players dominated by AT&T and Verizon. Those companies can use their local dominance to favor carriage on their own long haul systems and create competitive disadvantages for both long haul and local competitors--like LUS.

The field is littered with other, nearly as striking, examples of how the FCC's faith has lead it away from it public service purpose. Deregulation pushed competitors like EATel out of the resale local phone market and has not resulted in better services--instead it has lead to higher prices with no real alternatives for local wireline service. We've discussed cable prices earlier: the FCC declines to regulate these monopolies on the basis that they have do have satellite competition. But another GAO study shows that satellite competition that has not substantially effected cable prices--meaning that wireline cable is a separate market.

On the basis of the evidence we should be beginning to conclude that at least wireline (copper or fiber optics) telecommunications is a natural monopoly and, given that cold hard fact, that it should be regulated as such or converted into a public utility.

Until the FCC loses its naive faith in free market solutions to natural monopoly markets the best local communities can do is to start their on public telecommunications utilities. Like LUS' proposed telecomm utility.

Tuesday, December 05, 2006

AT&T [BellSouth} Denies it Needs FTTH

AT&T, BellSouth's buyer, is continuing to refuse widespread suggestions that it should abandon its copper-based DSL strategy and move to a Fiber To The Home (FTTH) strategy, according to a Reuters report.

"Our view at this point is that we're not going to have go 'fiber to the home.' We're pleased with the bandwidth that we're seeing over copper," Chief Financial Officer Richard Lindner told a Credit Suisse conference.

"On average, at this point, we're producing about 25 megabits (per second). But in many many locations, we're producing substantially more than that."

Trouble is that 25 megs on the average is just not enough. 25 megs is just about the basement for providing the services they hope to sell a household. They need to be able to say that they are getting that consistently and with few exceptions. That they are not able to speak that way may explain why AT&T's commercial launch of its U-Verse cable TV product is still restricted to sections of its home town, San Antonio.

AT&T has been criticized for not following the path laid down by Verizon which is building a FTTH network--at considerable expense but without any real limit on the capacity of the network to expand cheaply. In Lafyette, once LUS is in play and BellSouth's acquisition is final, AT&T's "new" network will be the least powerful one around.

Speaking of BellSouth's acquisition; the same article reports:

Lindner said he hoped the BellSouth merger would be approved at a U.S. meeting on December 20.

"Certainly, from our standpoint, it would be our hope that the merger would get approved and we can close and move on at that point," he said.

"That's certainly our goal... to have an approval on the 20th. If it does not happen on the 20th, potentially it could slip into January."

The days of your getting a BellSouth bill are probably numbered. But just don't expect that you'll be getting a better plan for the future when BellSouth gets swallowed up by AT&T.

Monday, December 04, 2006

Humanity Lobotomy : Net Neutrality

Here's a YouTube video (original link) that is noteworthy for making smart points about net neutrality—and for making them in the style and the medium that is being defended.

Probably the most interesting point is historical: Media, from printing to radio have often started out appearing to be naturally "democratic" media--enabling people who were previously unable to be heard to have a voice. But those media were eventually commercialized and turned into neutered creatures of a few large corporations that had a vested interest in shutting out real controversy. Think Gannett or ABC Radio... The author's point in telling the tale is, of course, that while it is hard to imagine the net looking much like traditional tightly controlled media that the same could have once been said about print media or radio. All it took to change that, particularly for radio was corporate greed and a few compliant legislators.

It's als nice to see the internet medium defended in the style of the net: On an open source, mash-up video. The majority of the video consists of clips repurposed from earlier works and author invites folks to rework his material as well.

Humanity Lobotomy - Second Draft

As Laigniappe: Denizens of Lafayette will take note of the extensive use of Bill Moyer's recent episode focusing on Net Neutrality--the same one which featured Lafayette's fiber fight as one of its key examples.

Thursday, November 30, 2006

More on LUS Appeal (updated)

(updated 12/1--the earlier, on-the-fly version was way too telegraphic. Apologies; that's what happens when you try and post quickly from a rest stop. :-) )

I missed an article from KATC on Tuesday's Oral arguments in the LUS Bond/Loan case in my recent reporting. It's interesting in that plantiff's lawyers are denying that they are paid directly by BellSouth, Cox, or anyone other than Naquin. Now that doesn't mean she isn't being paid nor that they don't know of connections but it is the first denial of any sort that we've heard.

On the topic whether the basic issues of the suit will get a better hearing before the Supreme Court than they did before the Third Circuit, City-parish Attorney Pat Ottinger is cited as saying:
"I think the justices understand. Based on the questions they were asking."
That's the impression the newspaper articles leave us with as well. They're asking how the plantiff's lawyers interpretation can make any sense at all. I find it pretty amazing that the lawyers reply is that the law is badly written--essentially admiting that the law, as they read it, doesn't make sense. That's an astonishingly weak defense when the accepted way to analyze of any law is to find the interpretation that does make internally consistent sense.

Even more interesting we get a qoute from Durel on the issues going forward regardless of the outcome of the court's deliberations. (Previous remarks have been attributed to LUS' Huval). He says:
"I think it if was good enough two years ago, a year and a half ago, for our citizens to vote 62 for 38 against, then it's worth looking at what the next possibilities are"
PS: Did you know that restops in Texas have WiFi? I didn't before this post. At least the one Hwy 90 rolling into San Antonio from the west does anway.

Fiber down Hwy 90

The pic at left was taken on the vast, dry plains of West Texas outside Marathon headed east. We were on US Hwy 90 (yes, the same Hwy 90 we call Evangeline Thruway) and I was struck by the fact that both sides of the road were lined with these odd markers for 100's of miles. The white stick with the orange cap is the standard marker for a buried fiber optic line. The label on this particular one marked it as having once belonged to MCI and some of those fibers surely make it to regeneration station near Lafayette's Amtrack station.

It was a weird sensation to see that connection to Lafayette in a surrounding that was so unlike South Louisiana.

It was also disconcerting to know that the region through which it ran saw no benefit from the fiber--patches of telephone service wires to the separate remote communities were clearly running out from microwave dishes near each town. Modern telecommunications is almost invisible for long stretches of rural America and this is one of our most isolated regions.

Wednesday, November 29, 2006

Lafayette's day in Court

Signing in late but with passion from the parking lot of the La Quinta Inn in Del Rio, Texas. (The road sign says "La Quinta is Spanish for high speed Internet.")

Well oral arguments were heard yesterday in the bond/loans case that is before the State Supreme Court. As has become the norm you can get versions from both the Advertiser and the Advocate. Both are interesting and both cite remarks from the judges that hold out hope that the court will seriously question whether the plaintiff's (and the 3rd Circuit's) positions make any sense in the context of a law that claims to make competition possible. From the Advertiser:

Justice Jeanette Knoll asked if Baudin's position would be the same if LUS secured a loan from a bank instead of its electric, water and sewer divisions.

He said it would not change because state law allows no loans once the bonds are issued.

"Would they ever be successful?" Knoll asked. "That scheme is self defeating."

"Ms. Naquin didn't draft this act," Baudin replied. BellSouth, the city and others participated in drafting the Local Government Fair Competition Act "and it was poorly drafted," he said.

From the Advocate:

Chief Judge Pascal Calogero Jr. asked about a provision of the law that prohibits LUS from cross-subsidizing its communications business with tax revenue or “below market-rate” loans.

“Doesn’t that mean it’s OK?” Calogero asked Baudin. “If they’re not below market rate?”

It is a basic point of legal interpretation that laws should be interpreted as though they were internally consistent and in service of the declared purposes. The Third Circuit, in my judgment violated this principle; it is apparent that the Supreme Court is at least asking the right questions.

While the Advocate sticks close to explicating the issues at hand the Adverstiser gives us a few little extras that usefully spice up the story. On the mysterious Ms. Naquin it reports:

At one point, the justices asked questions some Lafayette residents have been asking about the case.

"Who is your client?" Chief Justice Pascal Calogero Jr. asked Baudin, who replied Naquin.

"I thought it might be BellSouth," Calogero added.

Indeed, that's what lots of us think it might be. Though Cox could be the bad boy here as well, given the history of these suits. It seems very unlikely that Naquin and Eastin--as unlike a pair as you are likely to encounter--met and searched out a law firm across the basin to engage in lawsuits that benefit nobody but the incumbents without some sort of help. (Eastin has resigned this suit but remains involved, as far as I know, in another and has also refused to explain his actions or how he got involved.)

Monday, November 27, 2006

"LUS heads to La. high court"

Blogging from sunny Terlingua, Texas... When I got up this morning the cafe next door had their WiFi up and I was able to scan today's news back home. (Apologies for recent spotty posting, we haven't found campsites with "free high speed internet"---yet.)

Both the Advocate and the Advertiser have articles written in anticipation of tomorrow's oral arguments in the LUS bond case. Both have good reviews of the history of the legal conflict if you'd like to refresh you memory on the case.

The one point that I feel is signficant that neither paper covers is the attempt by LUS and its legal allies (the Lousiana Municipal Association and the Fiber to the Home Council have both issued friend of the court briefs) to overtun not just the last decision of the Louisiana Third Circuit but the one prior to that—the one LUS and the city chose not to appeal—as well. The Advocate article alludes to that situation:

A bond ordinance passed by the City-Parish Council sets up the rules LUS will follow to pay back the bond issue.

In that ordinance, LUS says that if it cannot make a bond payment with communications revenue — as required by the Fair Competition Act — the communications business would be shut down and the bond holders would be paid back with overall utilities revenue.

LUS argues that meets the legal definition of a “pledge” required by the Fair Competition Act
That definition of "pledge" is arguably not in the (un)Fair Competition Act. The bond ordinance in question was crafted to meet the requirements of a loss at the Third Circuit that overturned a previous bond ordinance which the city thought fulfilled the requirements of the Act. The city did not choose to appeal that decision; that decision which was criticized at the time for conceding too much. The arguments in the current appeal attack both this previous decision and the current one which it is based on that unappealed decision. Should Lafayette win in the Supreme Court and the Court accept its argument it will roll the status quo back to the state of affairs before the first Third Circuit loss.

Light a candle folks. A lot is riding on this one.

Lagniappe: The Advertiser article closes with a teaser paragraph:

If the Louisiana Supreme Court upholds the Third Circuit decision, ruling against LUS, Huval said the options to be considered depend upon the specifics of the decision. The options may include revising the bond ordinance again, asking the state Legislature to repeal the Local Government Fair Competition Act or looking at other alternatives to proceeding with the project, alternatives that Huval declined to discuss.

I think it is pretty clear that the fight wouldn't be over even if Lafayette lost in Louisiana Supreme Court. These pages have long favored a vigorous, state-wide repeal fight and it appears that city is up for it. But I am most intrigued by the hints about "other alternatives." Hmmmnn.

Friday, November 24, 2006

Cox & the Need for Competition, Without Further Comment

I was going to write a small post based on an email I received from a friend recently. But the text of the email does the job without the need for further comment:
I'm at a client's when it happens, I call tech support, they tell me "big outage", OK. I had gotten my client's Cox bill just in case I was asked for any info and I had tech support transfer me over to sales so I could review their paltry 768/256 plan ($60 for that crappy level of service, not that the DSL business plans are any better).

So I'm talking to this guy Larry and he's blandly telling me the next jump up to 1.25/368 is $100. I say, "You know, things are going to be happening around here and your plans won't look so good." He says, "You're talking about LUS, right?" and I say yes, so he says ...

"We'll be competitive when we have to. We're in this business to make money."


Tuesday, November 21, 2006

"Cox 'push polling,' residents say"

Few in Lafayette will be surprised to hear that Cox has been accused of push polling in Arizona after our experience here.

Apparently the push polls there are designed to produce results that would be helpful to Cox's lobbying projects in the Arizona legislature. The (false) contrast the Cox poll promotes is between having more HD and on-demand channels by offering fewer public access channels. That's not a necessary choice at all and it's not being suggested elsewhere. Cox is suggesting that is the choice anyway--without mentioning the premium price of the one and the free quality of the public access channels. Cox will make a ton more money off the specialty services than in filling its contractual obligation to provide local access TV as a service to the community. But put that way its sounds greedy. So they try and get the public to say it for them by asking misleading questions.

The push poll also throws in a little gist for lobbying effort to reduce the maximum amount that cable companies can be charged for using the public rights of way.

Cox. Your friend in the digital age, right? Now you know why that animated cartoon character is draw to look so silly--he's gotta be a credible spokesperson for absurd ideas.

Monday, November 20, 2006

Wilson, North Carolina gets Fiber

The city of Wilson North Carolina has decided to build a fiber to the home network according to LocalTechWire. Lafayette citizens will find their reasoning familiar:
The City decided to deploy its own fiber network and then open it for use by businesses and citizens after private companies Time Warner Cable and Embarq said they would not provide fiber infrastructure, Freeman explained. Embarq provides telephone service across Wilson County. Time Warner is the city’s cable TV provider.

“We just can’t rely on other people to determine our destiny,” Freeman said.
The city's phone company, Embarq, is a small, local phone company piece spun off by Sprint-Nextel to satisfy regulators and as such doesn't have the resources to build a modern network. It, apparently, has decided to cooperate. Time-Warner, the cable company chooses not to comment. Lafayette's advice: watch out for the cable guy!

Saturday, November 18, 2006

Not Always Full Speed Ahead

To quote the great mid-Twentieth Century philosopher Gomer Pyle: "Surprise! Surprise! Surprise!"

The New York Times reported Saturday that consumers are having a difficult time figuring out what they are paying for bandwidth these days (at least, those consumers where there is genuine competition for bandwidth!).

Here's the gist of the article in a few short paragraphs:
In more densely populated areas, many Americans now have not only a choice of broadband providers but also a range of different speeds to pick from. As the options proliferate, consumer advocates say it is getting tougher for people to tell what service is best for them — and which packages promise more than they deliver.

Confusing matters, broadband lines are increasingly being bundled with television and phone services, making it difficult to determine how much the high-speed connection actually costs.

The offers, consumer advocates say, are not always straightforward. With few exceptions, they include language that says consumers will get “up to” a certain speed, typically expressed in megabits per second. (An MP3 song file that takes 12 minutes to download over a dial-up line would take 27 seconds on a 1.5-megabits-per-second broadband line, and 8 seconds on a 5-megabit connection.)

In many cases, consumer advocates and industry analysts said, customers do not get the maximum promised speed, or anywhere near it, from their cable and digital subscriber line connections. Instead, the phrase “up to” refers to speeds attainable under ideal conditions, like when a D.S.L. user is near the phone company’s central switching office.

“They don’t deliver what’s advertised, and it’s inherently deceptive,” said Dave Burstein, editor of DSL Prime, a newsletter that tracks the broadband industry. “ ‘Up to’ is a weasel term that should be taken out of the companies’ vocabulary.”

The companies argue that their marketing is not misleading because the speeds they promise can actually be reached.
I don't know what BellSouth is charging for DSL these days -- and I'm not interested.

I am, however, a Cox customer for video, voice and data. The speeds Cox delivers varies wildly here in my part of town and the modem needs an inordinate amount of resetting from time to time. I've tested the speeds using various 'connection speed' sites and don't ever recall getting any speed near the x-megabit speeds that come with the package (they say the speed's been updated recently, but I haven't noticed it).

So, for now — like a lot of folks across the country — we're all stuck paying premium prices for sporadically mediocre Internet speeds. Getting the LUS fiber project built would change all that, but we find ourselves at the mercy of courts.

Thursday, November 16, 2006

Fun and games

The actual title of the Advocate article is "Not all fun and games" but what fun is that? I'm afraid that characterization derives from a teacher making the nervous mistake of apologizing for his student's enjoying learning when it would be more appropriate to apologize for the prevalence of the everyday, normal, industrious, and boring class the guest probably expects.

The class in question is at ULL and the embarrassingly fun subject matter is video games. The story covers the relatively new video game concentration housed in the department of computer science. The article's core description:

The video-game concentration, first offered last year, has quickly gained in popularity and has about 40 majors, Etheredge said. “It’s attracting a lot of students,” he said. “It’s one of the few things that get students excited about college.”

Those who choose to pursue the program are required to take a broad range of classes: a foundation of computer science and math courses plus a video-game specific curriculum that includes electives in computer animation, creative writing, artificial intelligence, camera production and theater.

“Games bring together all of those,” said Timothy Roden, who teaches a class in three-dimensional game design
That sort of interdisciplinary work that leads to the "making" of real, even when virtual, things is the most exciting learning environments available at any university--and is the sort of experience that most students don't get a crack at until graduate school.

Lafayette is lucky to have a program like this available. Gaming, with its bandwidth expensive underactivity and graphics is one the drivers behind the demand for fiber-optic networks. With the promised 100 megs of insystem connectivity (all subscribers will be allowed to connect to each other at the full available capacity of the system) Lafayette will be a great place for new games to be developed and tested.

What the Democrats' Win Means for Lafayette Tech

c|net publishes a timely story on the effect of the Democrats' capture of the House and Senate on tech-related policies. The National Journal has a similar article focusing solely on telecom matters. (See also: Buisness 2.0) As you might expect the effect is mixed--favorable for many, unfavorable for others, and dependent on which part of the tech sector you occupy for yet another set. On most telecom topics of interest to the Lafayette community this change will likely prove a good thing both in the short and long term.

Short Term: Stevens' Telecom Bill
In the short term Senator Stevens' comprehensive Telecom bill is almost certainly dead. Stevens (he of "the internet is a series of tubes") had been unable to push a bill that catered extensively to corporate interests through the Senate after it hung up on the then-majority's refusal to include net neutrality provisions. He blamed the politics of the midterm election for its demise (normally party-line Republican votes apparently didn't want to stir up net activists against them right before an election).

Stevens had defiantly promised to take it up during the lame duck session when the will of the people wasn't such a troublesome factor. With the apparent death of that bill dies the threat that a major overhaul of telecom law will be possible without some measure of net neutrality. Gone as well is the threat of a national video franchise clause that would "federalize" local state and municipal rights of way by setting extensive conditions the freedom of local governments to write contracts controling their own property. The most onerous of those conditions would have been a ban on cities requiring corporations that want to use the people's property to serve all the people--not just the most profitable faction.

Both the net neutrality issue and the video franchise power grab would have had real effects on Lafayette's fiber build.

Net neutrality is, at its root, about allowing the few large corporate owners of the current networks to use their size and control of current networks to favor their own products and those that "partner" with them over those of their competitors. Data from Cox's propietary search engine would be given "packet priority" over Google's for instance and hence would work faster. That bad for users and the outcry has been enormous on that ground alone. But by the same token it would be bad for any small local provider of network services (like LUS or EATel) whose size and lack of vertical integration makes playing similar games with its customers impossible.

The video franchise power grab would have allowed both Cox and BellSouth to only compete for the most profitable local consumers, leaving the lower margins on all those "low value" consumers to LUS. Since LUS will offer service all of its citzen-owners that would leave the small local corporation at an unfair disadvantage. (Citizens should take note: expect another go at this issue in the next state legislature. Only Blanco's veto of a state franchise bill with the same onerous build out provisions as the proposed federal law saved us last year.)

Intemediate Term: Regulatory Atmosphere and the AT&T-BellSouth merger
The regulatory bodies of the federal government wield an inordinate amount of practical power. In many areas Congress and the Courts have all but ceded practical law-making and interpretation of the law to regulatory bodies. The Federal Communications Commission (FCC) is one place where this has been especially noticeable. This is intensely political and in the absence of any countervailing Congressional oversight the pro-corporate, anti-regulatory assumptions of the Bush administration has controlled. The same laws that lead earlier regulatory bodies to successfully pursue breaking up AT&T are now interpreted to allow AT&T to gradually reconstitute itself. The bid to take over BellSouth is part of the shift.

Here's what c|net calls the "Bottom line:"

Some fear a supersize AT&T could jack up wholesale line-leasing rates it charges to smaller carriers--a cost that would ultimately be passed on to consumers.
The new AT&T will be most dangerous in the way that it reduces competition in the backbone, long haul business. Lafayette is lucky enough to lie at the intersection of an unusually rich set of fiber optic networks--extensive fiber from mulitiple providers runs down I-49, I-10, and the railroad tracking southeast to New Orleans providing multiple ways to reach the vastness of the internet. That's lucky because it will allow LUS to bargain aggressively for lower costs in a way that is not available to many communities. But even in our enviable position consolidation has meant fewer choices. The AT&T network will not be a practical choice for LUS when it buys BellSouth. Similarly but less dramatically the deal that Sprint-Nextel has entered into with the cable companies to provide cell phone services to a consortium that includes Cox likely removes it from the group of companies that are willing to bargin aggressively to win LUS's business. In the long run consolidation of the long lines means smaller companies and local communities will see less competition for their business...and, inevitably, their customers will pay higher prices for their connections than they would otherwise. Allowing the telephone companies to recombine into a few huge networks clearly has detrimental effects on competition--and frankly in any other regulatory regime before the one fostered by the current administration and its recent Congressional leadership it is doubtful that such consolidation would be allowed.

A prime complaint against the Republican Congress has been that it has not meant its constitutional obligations to provide oversight. While most who level that charge are thinking of no-bid contracts in Iraq and the gulf coast or the conduct of the Iraq occupation the concern is actually much larger. Regulatory bodies have also been allowed to go their own way without any Congressional oversight. Congressional hearings on so major a consolidation as the upcoming AT&T-BellSouth merger would have once been considered obligatory. An FCC board of commissioners that strayed very far from the law or the will of Congress found itself in very hot water. The incoming Democratic committee chairs are promising to renew Congressional oversight of the federal apparatus.

In the new atmosphere the FCC may find it wise and AT&T may find it politic to agree to net neutrality conditions on its merger that the Democratic minority on the FCC has demanded and AT&T has resisted. Too much resistance might well earn it a round of hearings that would be very uncomfortable for all concerned.

Long Term: Committee Chairmanships

Most of the longer term (2 year?) effects of the changing of the guard will be a result Democratic control of key committees. Committee chairmanships will be taken over by the former "ranking minority" members of both the House and the Senate. In addition, a number of those who lost their seats were among the strongest supporters of the corporate position on various telecom issues. (For instance the two close races whose loss gave the Democrats the senate were Sens. Conrad Burns of Montana and George Allen of Virginia. Both these men sat on Stevens' Commerce Committee and were ardent supporters of Stevens' bill.)

The new chairs have, by and large, a well-defined position and voting history on major telecom issues. They tend to be much more pro-consumer than the men they replace, a situation which aligns them more nearly with Lafayette on the issues important here.

In short, at least for the telecom and tech issues that most directly effect Lafayette, the shift in Washington doesn't look bad.

Tuesday, November 14, 2006

"LUS says court ‘tilted’ law against cities"

The Advocate headline says it all: "LUS says court ‘tilted’ law against cities." That's pretty much the whole story. Recent briefs filed with the Louisiana Supreme Cout argue that the third circuit has erred by taking a compromise and transforming it into a tool that the incumbents can use to block implementation of the plan the voters called for in July more than a year ago. That transformation involves ignoring the written intent of the law and the context in which it was passed. From the story:

This summer, the Louisiana 3rd Circuit Court of Appeal put a stop to LUS’ plans, saying the method that LUS planned to use to pay back up to $125 million in communications bonds violated the so-called Local Government Fair Competition Act.

That law was passed in 2004 at the behest of the telecommunications industry as a way to ensure a “level playing field” between privately owned and publicly owned communications businesses.

But the 3rd Circuit ignored the Legislature’s intent and is “interpreting the law so as to tilt the ‘level playing field’ against local governments,” LUS argues in a brief filed with the Louisiana Supreme Court.

Laws usually have preamble sections that establish the purpose of the law and detail its intended effects and the (un)Fair Act has an extensive section that lays that out. This section is often ignored as window dressing by lawyers and courts but has a serious and essential role in determining "intent." Legal interpretation is at least as difficult as every day interpretation--and determining what a sentence should be understood to mean often depends on hearing it with ear for the context and the intent of the speaker.

"Legislative intent" is the label given this legal principle but, as commonsensical as it may seem when that intent is written into the law, other theories of legal meaning that revolve around a literal reading of the text that is informed by nothing outside the text are often opposed to it. (If you see an echo of arguments over Biblical interpretation I'd say you are most likely seeing a similar pattern.) So, in the end, Lafayette's future may well come down to which camp on the arcane topic of theories of legal meaning a few men on the State Supreme Court belong.

As lagniappe:

As readers may recall these pages have always been adamantly of the opinion that the Local Government (un)Fair Competition Act is...unfair. It is bad for Lafayette and local governments that might want to follow in its footsteps. Mike Stagg, my partner here, went down and testified against it in the legislature when the official line was that this was a "good compromise." The Louisiana Supreme Court is the last hurrah for the interpretation that the law is reasonably understood as a fair compromise of any sort. Being right on this will be cold comfort. I'd much rather we were wrong.....

Wednesday, November 08, 2006

Clarksville, TN votes in Fiber; 72% vote Yes!

The Leaf Chronicle of Clarksville, Tennessee reports that the voters there voted in fiber by a 72 to 28 percent margin.

Clarksville voters overwhelmingly approved Clarksville Department of Electricity's bid to provide telecommunication services over a new fiber-optic network.

With the blessing of almost three-quarters of city voters, CDE in about six months will begin offering cable television and broadband Internet access over more than 700 miles of fiber-optic cable.

Interestingly apparently the city-owned electrical utility there, CDE, heavily emphasized the benefits to electricity customers of having a grid monitored by fiber. Those benefits were barely mentioned during the Lafayette fiber fight and certainly played no role in the eventual vote.

Clarksville's cable incumbent Charter and phone incumbent BellSouth did not impose an extensive battle on the community in the way they did in Lafayette. Charter is in real financial difficulties and BellSouth had its merger with AT&T on the table as this proposal spun up. That might have something to do with the relative lack of opposition. It might also be that BellSouth and the cableco's learned a lesson in Lafayette. I was contacted early in the campaign about helping with a battle there--but that battle apparently never really happened.

To my recollection this is the first fiber referendum to pass since Lafayette's -- recent muni broadband referenda have focused on wireless systems. But this should demonstrate that the appetite for real municipal broadband has not passed.

Welcome Aboard Clarksville!

Update 11:16--While noodling around the internet looking for info the Clarksville fiber network I ran into an interesting fact about Clarksville's plan: they're gonna run fiber to every home. Period. Wow.

The deal here is that they will be installing new "meters" to monitor electricity, eliminate meter readers, and provide the possibility of new services. These meters are also set up to provide phone, cable, and internet should the customer want to purchase those too. So their upfront costs will be greater but will presumably be borne at least in part by the electrical side of the utility--some part of the maintenance cost for the fiber will be borne by the electrical utility as well. For the record: more sophisticated monitoring and maintenance devices has long been a big issue with electrical utilities and the day of their arrival has been delayed often. The desire for such capacities has not been invented for the purposes of Clarksville--this was the idea behind the initial development of BPL--Broadband over Powerline, a perennial wannbe in the broadband races.

Clarksville's utility is so committed to the monitoring aspects that it is going to go ahead and build a fiber-optic monitoring system at a cost of about 72% of the total for a full telecom system even if the referendum fails. So the referendum becomes an issue of whether or not to put the system to use for the benefit of the citizens or or just use it monitor electricity--not whether or not the system will be built. The choice is between an 88 mill system with benefits and 73 mill (with interest) system without. Here's the way an article in the Leaf puts it:
Voters, then, technically will be making a $25 million decision as to whether CDE can offer telecommunication services in lieu of raising rates an estimated 3.5 percent to cover construction costs.
The political and fiscal advantages to taking this route are pretty obvious.

I'd think the downside aside from upfront costs would be that replacement costs and eventual telecom system upgrades would be more expensive than they would be otherwise. (If you've got a combo fax/printer/scanner you have to replace it all if the scanner goes down or if you decide that you need higher printer resolution.) But if the incremental cost of the monitoring module were small (and I expect it would be) and if it could be hung cheaply in a widely available commercial box that might not be a noticeable issue.

Well worth thinking on. Louisiana law does allow for shared costs.....and future muni fiber designers and their politcal backers might well want to consider the idea.

"Groups join Lafayette’s fight for fiber-optic plan"

There's a good article in today's Advocate that lays out, quite neatly, the history of the fiber fight in Lafayette. Blanchard, the Advocate's reporter on the story, provides the history as the backdrop to his discussion of the Fiber To the Home Council's (FTTH Council) friend of the court brief in support of LUS and the city of Lafayette.

Blanchard's analysis of the FTTH Council brief focuses on the loan structure of the Lafayette project. He notes that the so-called Fair Competition Act was supposed to provide a "level playing field but actually forced LUS to pay market-rate for loans from within the company that its private competitors would not have to pay for. But that (un)fair requirement is precisely what is under attack by the Naquin lawyers who want it eliminated in spite of plain language in the law that anticipated loans offered at fair market rate.

It is a twisty logic that the incumbents and their agents are arguing and it is astonishing that the 3rd circuit bought it.

We'll see the Naquin lawyers response on the 21st and oral arguments will be the 28th.

By the by, The article closes by expressing some doubt about the project:
During the delay caused by the lawsuit, interest rates have risen, but the cost of the technology has also fallen, giving officials hope that — with a favorable ruling — the communications project will still be financially feasible.
In truth, interest rates are still not above the level projected in the feasibility study. True, we'll be paying a lot more in interest than we would had the incumbents simply accepted the will of the people. There was a window of very low interest rates of which we should have been able to take advantage. But the current rates are no more than were originally anticipated. The silver lining is the rapidly falling cost of the sort of fiber-optic equipment that LUS is anticipating installing--due mostly to Verizion's large FTTH build in the US and to rapid FTTH deployment worldwide. As Laignaippe when our purchase is finally made we'll almost certainly get a higher base speed than the 100 megs we talked about during and immediately after the campaign—LUS will surely install the sort of equipment scheduled for the first upgrade several years out.

Saturday, November 04, 2006

"Election's Tally Holds Intrigue For AT&T Deal"

The prospect of BellSouth being bought out by AT&T has been a topic of discussion on these pages, much of it unhappy but resigned. Mostly this merger has been seen as a done deal--the prevailing regulatory atmosphere has been such that it was hard to imagine any merger that wouldn't be approved by the current administration with little concern for consumer concerns.

But in the last few days there has been chatter online about the FCC's inability to come to grips with the issue--the vote to approve the merger has been delayed three times. The problem is that the deciding vote, a recently appointed Republican, has recused himself from participation as a consequence of having recently worked with a company that has an interest in the outcome. The consequence is that the FCC has been deadlocked on a vote setting conditions for the merger with the Democrats on the panel holding out for conditions that would ensure that the reconstituted AT&T would not abuse its monopoly power to set high entry level charges and that it would adhere to the traditional common carrier rules--rules that enforce net neutrality. AT&T has balked at the latter condition. Scuttlebut had been that, given the overall climate, AT&T would get its way.

But that climate may be changing soon:

If Democrats gain control of the House or - though less likely - the Senate, that would change the regulatory climate for telecom mergers, analysts say.

"AT&T is taking somewhat of a risk (by holding out for the fewest conditions) in that potential success by the Democrats could embolden the opposition," Merrill Lynch analyst David Janazzo wrote in a note to clients.

If Democrats win the House, then in January they would take over the chairmanships of committees that oversee telecom regulation. Levin says congressional hearings then "wouldn't be fun" for AT&T.

That gives you one more thing to think about as the returns come in Tuesday night.

Friday, November 03, 2006

"Groups support LUS on network"

A second group has joined the Louisiana Municipal Association (LMA) in filling "friend of the court" briefs in support of Lafayette's fiber to the home plan. The Advocate this morning reports that the Fiber To The Home Council has joined the LMA, whose support had been previously announced.

Amicus curie briefs like these are important because they offer the court a broader and often more authoritative view on the issues brought before the bench. The current lineup offers points of view from the perspectives of the city, the state, and now the nation.

The new FTTH Council brief, I understand, was authored by Jim Baller. Baller is widely held to be the nation's most influential lawyer on the subject of broadband and has been a tireless supporter of the concept of municipal broadband. Baller has consistently promoted the idea of a national broadband policy--something few who follow the subject believes exists now--and holds that municipal broadband is an essential element in any practical plan to bring the US back to a competitive level of broadband speed and adoption. Baller was also involved in crafting the now infamous "Local Government (un)Fair Competition Act" and would certainly have a unique basis from which to explore the unanticipated consequences of the law that has been used to keep the fiber-optic network plan in court.

John Gallanger spoke to the paper on behalf of the LMA. I met him during the video franchise battle in Baton Rouge during the last legislative session and have respect for his obvious smarts. The LMA holds that the third circuits circuitous redefinition of bond law is dangerous to the bonding authority local governments have always enjoyed.

Point of personal privilege:

I look forward to giving these briefs a close read -- sometime after the election on November 7th. I'm supporting Mike Stagg for Congress....a candidate who actually understands these issues and showed his commitment to Lafayette's fiber plan in the clearest possible way: by assuming a leadership role in the fight to get it. Boustany was urged, repeatedly, to help co-sponsor a bill that would have provided federal protection for municipal broadband programs by forbidding the states to prohibit them or to author laws, like the (un)Fair Act, that effectively prohibit them. Mike's opponent has yet to utter discernable support for his home-town's most ambitious and embattled program, has voted against net neutrality, and just yesterday came up with a 25% score on C|Net's scorecard of votes in support of technology issues. That score put him in the bottom 5% of the house. From the point of view of a technology advocate he's not what a Lafayette that sees itself as a high-tech enclave needs.

Wednesday, November 01, 2006

Fiber plan saves Lafayette 2.5 Million?

The Advertiser online has a longish interview with Joey Durel. It's a bit odd in that it seems organized not around reporters questions but around redigested questions solicited from the papers "readers." If you've ever glanced at the tone the Advertiser has allowed to spring up around its online discussion forums you'll not be surprised at the unformed and vaguely hostile questions the process puts in Claire Taylor's mouth.

But what warrants mentioning the interview here is that deep into it Claire repeats a question about using money from LUS or the fiber project for roads. This, of course, is just dumb. That money is simply not available for anything else. (Elsewhere the same crew of questioners has made a big thing out of "dedicating" money.) This has been pointed out often and really is no longer reasonably viewed as an honest question.

What's interesting though is that Durel claims that even with expenses Lafayette is 2.5 million to the good on the fiber initiative. The idea is that the long delay between Cox rate raises in Lafayette--a delay no one else in the region experienced--can be attributed to not wanting to further offend Lafayette and fuel its already white-hot anger at the corporation while there was a chance the city might still back off.

That $2.5 million is an interesting number and pretty credible if you take into account just how much money Cox pulls out of the community every month. I'd dearly love to see the background figures on this.

Here's the interview segment that deals with fiber:
CT: Another said that hundreds if not million of taxes dollars have already been spent on the fiber project and planning and campaigning, fighting the legal battles, and the project still hasn't been built. Shouldn't that money been spent on roads instead?

JD: No. Let me state very clearly that money was not available for roads. As I stated earlier, in government, unlike you and me, if you have some money in savings, and you can't pay your house note this month you can take money out of your savings. In government, LUS has certain laws that regulate it. We can't just go to LUS and say you have some extra money. We want it. We can't go to the school board and say look you all have a property tax that you are getting a bunch of money and I know you have your needs, but I think we want the extra money this year. We can't go to LUS and just take money to build roads. It's against the law. What people don't realize is that the fiber project has saved this community, I just saw something in the last week or so, had saved the consumers in this community over $2.5 million.

CT: How's that?

JD: Because Baton Rouge received pricing increases on their cable that we did not receive.

CT: We did get increases.

JD: We got one recently. But they have gotten some before we did. But because we were talking about a fiber optic project we didn't have price increases. So in this community, we did some math, and found out we have saved this community $2.5 million, which is much more than we spent on legal fees. So I think it's money well spent. By the way, LUS hasn't caused the legal fees to be spent. People should not be mad at LUS for spending legal fees to try to do something great for this community. There are other people that that anger should be redirected at.