Friday, September 29, 2006

Where are they now: Thomas Lenard

Where Are They Now...Thomas Lenard

Telcomm shill Thomas Lenard popped up on my radar again last night with a short opinion piece in C|Net news promoting the Cable industry line on "cablecards"--devices which would enable real competition in the settop cable box market and eliminate that monthly digital box fee on your cable bill. No one should be surprised to find that Lenard opines in favor of corporate control of the boxes in your home.

Readers with a long memory will recall Lenard as one the panel on the Cox/BellSouth faux "academic" forum (analysis, report) that was one of the incumbent corporations first serious tries at disinformation and FUD here in Lafyette. In it Lenard joined his fellow industry-funded experts to downplay the possibility of a successful public fiber build going so far as to claim there had been no successful municipal telecom utilities anywhere. He also supported the odd--and demonstrably false--claim that competition in the cable industry had never forced down way of making competition from municipalities seem useless. Suffice it to say that the event, and Lenard's participation in it, was far from academically disinterested.

Lenard, and the incumbent-funded Progress and Freedom Foundation of which he is a "senior fellow," popped up again when Lenard told Wired that "case studies," including one of Lafayette's fiber system, had shown the muni fiber didn't work. What case study you might ask? Since there could be no case study of a system not yet built your puzzlement would be appropriate. Such is the quality of the invented research that Lenard and his foundation indulge themselves in.

There's a whole industry of faux academic "pay for play" researchers out there that are deliberately polluting the conversation. What's encouraging is that the commenters at C|Net are on to him. A few years ago that wouldn't have been the case. Today he gets roasted and his connection to PFF and its industry-funded research are highlighted by regular readers. (Would that the editors of C|Net been similarly discerning.)

Tuesday, September 19, 2006

Be Careful What You Wish For

"Broussard businesses keen on going wireless" reads the title of an article posted to the web and running in the Broussard-Youngsville weekly supplement to the Advertiser. The article documents the benefit this would bring to Broussard's Main Street businesses.

"Be careful what you wish for, lest it come true" is a wise old cautionary saying that Mayor Langlinais and the citizens of Broussard need to consider.

They're asking for a whole heap of trouble.

I'm all for Broussard (and Lafayette! and Duson!) getting a cheap wireless system for the use of its citizens. But, you always have to be careful when what you wish for is illegal. Care is especially needed when large and powerful corporations have made your desires illegal for the express purpose of protecting their profits. You can bet they'll defend their laws.

Here's what happened just up the road from Broussard when Lafayette decided that it wanted to build a fiber-optic network that the incumbents, Cox and BellSouth, refused to build: Cox and BellSouth set out to make their desires illegal.

Some history for the residents of Brousssard that may not have followed the little war in Lafayette very closely: The incumbents went to the legislature with a proposed law that would have made Lafayette's plan impossible. After the governor threatened a veto of any law the parties couldn't agree to a confused and internally contradictory law known as the "Local Government Fair Competition Act" passed. It was a bad compromise, one to which Lafayette, in retrospect, should never have agreed. The law, and a subsequent amendment which made it worse, imposes all but prohibitive conditions on the creation of such a utility. Other clauses make it unnecessarily expensive to run and still others deliberately try to increase the chance the new business will have to default by creating artificial barriers to loan repayments that no private business has to put up with.

That law prohibits Broussard from just opening up a system its citizens have already paid for to public use if it offers them anything more than 200K of speed. Broussard cannot legally offer broadband service. So if the people of the city wish for a service that is not outdated and inadequate from the first day it is offered they'll have to go through the whole rigamorale of studies and hearings and a referendum vote--all the stuff they saw their larger brethren to the north going through last year.

And then when they succeed they can count on delaying tactics similar to the ones Lafayette is now going through.

And should they get through that they need to know that the costs of their system will still be inflated by a law that exists to prop up the profit of two large monopolies headquartered in Atlanta.

Frankly, one of the worst features of the "fair" Competition Act is that the small towns that will never be adequately served by the megacorporations will almost certainly not have the resources to get into the sort of legal and political battle that a larger city like Lafayette can manage. It's been hugely difficult for Lafayette--which has many times the resources of Broussard--to engage in the fight.

The (un)Fair Competition Act needs to be repealed. It's anti-competitive and anti-democratic. If the people and businesses of Broussard want something better for themselves they ought to go down to the legislature and demand repeal of a law that is designed to prevent them from helping themselves.

If you want wireless the battle-cry ought to be: Repeal!!!

Sunday, September 17, 2006

Sunday Thought: Reality Check

I've not posted a Sunday thought piece in a few weeks. --My apologies, been thinking about other, if related, things. But a paper came in this week that is rich enough that we all really ought to take a look at it and think about its implications. There's something for everyone in "Broadband Reality Check: The truth behind America's digital decline." It is published by the venerable Consumer's Union (publishers of the gold-standard, ad-free, Consumer Reports), The Consumer Federation, and the FreePress.

The paper ruthlessly lays out the facts: the US is falling rapidly behind other nations in broadband penetration, available speed, and price. This gap is not closing but is rather expanding. We continue to lose ground. It methodically dissects the the usual excuses of the incumbents and their apologists--population density and "regulation" offer no excuse for the incumbents poor performance vis-a-vis the rest of the developed world. (In fact the lack of appropriate regulation is part of our problem.)

This is clearly due, the author's unflinchingly point out, to the raw fact of duopoly control of the market--with large segments of that market an effective monopoly. They put to rest any wistful thinking that "third way" and "alternate platforms" like satellite, wireless, and broadband over powerline provide any real competition for the wireline duopoly. That segment is a minuscule percentage of the market and its market share is not growing but actually getting smaller. No technological white knight is in prospect. (Lest there be any doubt about this point: the FCC is currently bringing its auction of prime wireless real estate (spectrum) to a close. The incumbent telecoms--the baby Bell phone companies, their wireless arms, and a new consortium combining the major cable companies and the formerly independent Sprint--appear to have purchased control of the vast majority of that "new" spectrum. If you think corporate wireless 3G and 4G is going to give us any pricing relief--well, I can only say your dreams are pleasant. Letting the current incompetent monopolies buy up any hope of future competition is one of the most astonishingly bad bits of public policy this nation has seen.)

The study goes on to flay the FCC's absurd definition of broadband (200 K!b) and its method of counting broadband penetration. If even one person is a zip code is offered broadband that exceeds the silly speed then all the people in the zip are counted as "having access" to broadband. This particular ploy is used to great effect by our own BellSouth who tells our legislature that almost the whole state has access to broadband using FCC figures. This is because they count all those areas where they might could (should anyone know to ask) provide broadband right next to their local switch in a rural area. They concede, when asked, that they don't really offer that to the public....but they could. --Amazingly self-serving book keeping. And the FCC aids and abets their deception.

One bit that particularly interested me was the discussion of the digital divide. The digital divide still exists and is a persistent feature of the telecomm landscape. The major dividing lines remain between rural and urban and between wealthy and poor. They document that it is not the cost of computers that keeps poorer people out of the valuable buying and selling markets of the internet but the ongoing high cost of internet service. This is a point we've made repeatedly on these pages but it remains true: LUS' prices and the real wireline competition it will bring will do more to bridge the digital divide in Lafayette than any other single project.

The study is well worth your study...take a look. And spend a little time thinking about how to get out of the tough place we've gotten ourselves into.

Friday, September 15, 2006

Doug Menefee finds a fun one

Doug Menefee has found something fun. He says a friend sends it our way...

Click on the image for a larger version. Pass it on. We all need a smile or even a guffaw. Thanks Doug!

Advertiser Editorial Supports Fiber

An Advertiser editorial yesterday added one more line to your list of community support for LUS and the city on the fiber optic appeal. This comes as no surprise since the Advertiser (in the end) supported the project editorially and has expressed frustration with the lawsuits before.

If you missed it take a look at the online version. It's a readable discussion of why and how this issue is of interests beyond the borders of the city of Lafayette.

"People want broadband service by local provider"

In what is at least partially a response to Tim Supple's recent guest editorial a letter in today's Advertiser lays out a clean set of reasons for not handing over Lafayette's investment and potential income to private companies who have been unwilling to build this infrastructure for themselves:
I disagree with the claim that folks don't care who provides their fiber services, or that we should provide an "open infrastructure" to allow Cox and BellSouth to further profit from taxpayer dollars...
Both Cox and Bellsouth have truckloads of cash to build their own fiber systems. They don't, because they don't have to. They'd rather wait around and force us to spend our tax dollars, then waltz in and demand access to our network, to offer the same service they are now unwilling to provide.
This is but a preview of the sort of reaction that I suspect would be widespread if the city tried to change over to a "public/private" deal from the setup the people approved. I have to say that I share this reservation. I didn't work for a municipal network in order to make it easier for outsiders to take more profit out of this community.

Consider this: Were an "open systems" scenario in place I wouldn't expect Cox and BellSouth to participate--at first. But we are rapidly moving toward a Downloadable Television (DV) alternative that will radically alter their current business model.

Just this week Apple started selling major movies on iTunes. Pay close attention to this move; it has an interesting and important history behind it. Apple revolutionized the "album" market--by destroying it. People now talk in terms of owning songs, not albums. Much of what is offered on iTunes these days has never been on an album and doesn't resemble songs that could have made it to market in the days that a few big record companies controlled the channel to our ears. Every little band that wants to can post it best songs to iTunes and more and more do so. Or you can download podcasts and video podcasts. Or audio books. Or a buncha other hard-to-describe bits of alternative media. The album market is dying and the the companies that sat astride the narrow channel that controlled distribution are facing a bleak future.

It is not hard to predict that something very similar will happen with TV channels and the broadcast/cable model of video. DT is coming and TV will die. Expect, as with the "album" market, the new distribution system to spawn more and different sorts of video, some of which you pay the producers for directly and some of which are free. If you've not check in to things like youTube and various sites providing channels streams (for example BBC or al Jazeera) do so. You'll see the face of the emerging alternative to the TV model.

Companies like Cox that depend upon controlling your access to "channels" will have to adapt or die.

When that day comes the new services will depend upon intermittent access to huge bandwidth and easy IP-based integration into a plethora of other new services that are unrestricted by carrier meddling. LUS, or rather LUS,' network will be in the catbird seat.

On that day Cox (and BellSouth) will be eager to take advantage of our network to provide lucrative high-end services that its own network cannot support. If we put ourselves in the position of in effect "subsidizing" that service what will they do with their low-end network in our town? They will surely use it to undercut the old-fashioned cable service that LUS will be offering to those folks who continue to want "TV." That market will continue to be essential in paying back the bonds for our fiber.

Lafayette would be providing a refuge for competitors that would subsidize their competition on the high end while giving them every incentive to engage in predatory pricing on the low end.

This does not make good business sense--or good public policy. Richard Thornton is right.

Matthew Eastin apologizes; Questions remain

Good for Matt: According to an Advocate story Matthew Eastin of lawsuit fame has apologized to the Mayor and the city for delaying the construction of the city's fiber-optic network:

About two weeks after stepping down from the communications bonds suit, Eastin wrote to Durel, saying he was not aware when the first suit was filed that “the city-parish would be pledging the monies in controversy for the fiber-optic project.”

“It was never my intention to delay the fiber-optic project,” Eastin wrote.

Without a lawsuit challenging the bonds, LUS officials have said, LUS could be proceeding on the project already.

“Once again, I ask you to accept this letter as a formal apology to you, personally, and to the citizens of the City of Lafayette for any delays I may have contributed to with regards to the fiber-optic project,” Eastin wrote.

That's pretty stand up. Matthew is to be congratulated.

Apologies are intended to put matters to rest and this one goes a fair distance toward doing that. His participation in these lawsuits delayed a project desired by the community and that delay has caused substantial financial loses to the community. An apology is appropriate--especially if the injury was unintended.

This article raises questions about the administration--why did it wait so long in replying to Eastin's apology and what about the earlier apology that the letter hints at?

But real questions remain to be answered by Eastin before his part in it can be laid to rest. Why did he join a suit at all if not to block the fiber project? (No one else had any doubts as to why these suits were brought.) Recall this is the second suit; an earlier very similar one failed. Was he unaware that blocking the bond issue was a part of both suits? Was it not apparent that merely bringing suit would block the fiber project? Eastin has apparently not resigned his role in the rates lawsuit that gives grounds for the lawsuit he has dropped. Why does he remain a part of the suit that gives grounds for the lawsuit if he no longer wants to stop LUS? What did his lawyers tell him about all this?

Most crucially: how was he recruited to the lawsuit? Did he pay for it? If not, WHO DID?

A full apology requires coming clean...The mayor has offered the traditional Acadian peace pipe: a sit down cup of coffee. He ought to take him up on that. And come clean with Durel and the people of Lafayette.

Wednesday, September 13, 2006

The Supreme Court Fight: Media Roundup

A series of articles have hit in the last two days concerning Lafayette's appeal to the Supreme Court and the Louisiana Municipal Association's friend of the court brief in favor of Lafayette's position. We noted an article in the Advertiser yesterday and today we find articles in the Advocate, the Independent, Bayou Buzz, a Lafayette press release, and (turning up in the search) a lagniappe reference to an earlier editorial calling for an end to all such delaying lawsuits.

The most interesting is Advocate's article. The news there is contained between the seems that the LCG and LUS have decided to go back to the trenches. A new battle line is being drawn and Lafayette's leadership seems to be hunkering down for a long fight. Early in the article we are told that Huval provided some of the information for the aticle in a meeting of the Advocate editorial board in Baton Rouge. Durel is on tour as well, according to the Indpendent's account. That almost certainly means that other major newspapers across the state are also being visited. That's not behavior that we've seen very often--it's a long way across the basin and the Mississippi.

More evidence for a renewed fight is in the argument that is laid out n the press release and recent stories: the story is that the third circuit's rulings, and by extension the lawsuits themselves, are doing damage to the state's bonding laws; not just to Lafayette. Once you take that position and gather up the allies necessary to support it there is little room for further compromise--which is probably why this approach was avoided earlier. That's good--compromise has worked out poorly for Lafayette; compromising with bullies just invites further abuse.Down that path lies repeal or partial repeal of the (un)Fair Competition Act.

Final evidence is a willingness to say the hard truths that have always accompanied the "fighting mode" of Durel and Huval. (Recall "greedy out of state corporations" and "gormandise?") Huval makes it plain that legislators who put the interests of corporations ahead of the interests of the people of the state can't expect the solicitous free ride we've seen before:

Another option would be to return to the Legislature in the spring and try to have the law amended, Huval said.

But telecommunications companies have a lot of pull in the Legislature, Huval said.

“There’s a lot of hunting camps and a lot of golf tournaments and a lot of campaign contributions,” Huval said.

Huval is right; big money and big corporations have far too much influence in our legislature and the first step toward fixing it is to say it out loud.

Let's hope the Supreme Court takes the case and returns a sensible ruling.

Tuesday, September 12, 2006

Broussard Contemplates Taking on (un)Fair Competition Act

In an article that appears only online and, apparently, in the weekly broadsheet the Advertiser publishes covering Youngsville and Broussard news Mayor Langlinais reveals that still-tentative plans provide city meter readers and police with a wifi connection could, even more tentatively, be expanded to provide residents with internet access.

While the first phase of the plan will cover the police, fire and municipal use, Langlinais said citywide Wi-Fi could be in Broussard's future.

He said it would be a wise choice, "especially if we charge a small fee and offer it as an additional utility."

That'd be a great thing (presuming they can get past the (un)Fair Competition Act)...but before we get too excited we'd be wise to realize that the first stage at least is nothing very new nor very challenging technically. Lafayette, for instance, already has a public safety net built on wifi that operates cameras and communications and, if I recollect correctly, the wireless connects in police laptops operate off such a system as well. The challenge of building a wireless network to serve a few fixed locations and a very small number of mobile users isn't all that difficult--such networks are common across the country. The network necessary to provide ubiquitous service for all comers is a vastly greater undertaking--and currently rare.

The problem, as we in Lafayette have laboriously learned, is having adequate bandwidth available. Providing the bandwidth for a very low bandwidth applications (most municipal usages would be simple text heavy transfer, the bandwidth equvalent of html email) to a small number of users can be done with a relatively small supporting pipe; especially since none of the bandwidth need travel outside the local system. But providing a large number of users the ability to do the more bandwidth intensive activities (like heavy surfing, video, and gaming) that "internet" users expect will require being able to aim a consistent half meg or better at each user. That means big pipe connections to feed the network and real costs to connect those users to the internet.

Long-time readers may recall seeing Langlinais' name in relation to municipal networks before--he supported Lafayette's entry into the municipal telecomm market from the begining and even wrote a fiery letter taking to task an incumbent employee opponent. He and other regional municipal mayors have been very direct in hoping that LUS would bring services to their town. Certainly LUS could open up a stand or two on the fiber that they run through Broussard to provide the schools with bandwidth and pipe the connectivity back to one of the large interconnects in Lafayette. (Lafayette stands at the intersection of a batch of fiber optics going North-South along the railroad track and I-49 and going East-West along I-10. Several interconnects occur in the city.) Gaining access to those interconnects and the competitive wholesale environment they represent would drive the cost of bandwidth to Broussard.

It will be interesting to see how this plays out...

One issue that Broussard will have to confront is that the (un)Fair Competition Act will prevent, as it prevented New Orleans after Katrina, from offering any useful speed to the public. I wonder how many other towns like Broussard are being prevented from providing a public service that no one else is offering--and gaining a revenue stream in these days of unfunded mandates? That law needs to be repealed. It's absurd to set up protected ranges for private corporations who've evidenced their bad faith and poor citizenship.

"Group intervenes in LUS suit"

The Advertiser this morning runs more complete coverage of they story they published to their website yesterday.

The bottom line is that the Louisiana Municipal Association (LMA) believes that the series of Third Circuit ruling that have blocked the deployment of Lafayette's fiber-optic network are not only wrong but dangerous to every other city in the state:

But LUS and LMA disagree, saying the ruling could negatively affect the ability of government entities to issue bonds in this post-hurricane time when publicly funded improvement projects are crucial.

"I think this is one case where it is obvious (that the court erred)," said Tom Ed McHugh, executive director of LMA. "If pledging money comes into question, the ability to do bond issues at the municipal level comes into question."

The attempt to make Lafayette's bonds risky and expensive by tweaking the meaning of the word "pledge" to disadvantage Lafayette inevitably effects all Louisiana bonding entities.

LUS Director Terry Huval said the Third Circuit ruling may affect local governments' abilities to even issue bonds.

"The bond holders and bond rating agencies may look at Louisiana municipal bonds as riskier as a result of this decision," Huval said.

It's worth noting that it is not just municipalities and parishes which would be effected. The state itself issues bonds as a standard measure. You have to wonder what the state thinks about paying more for its bonding authority, especially in this post-storm milieu. Surely they aren't so subservient to corporate interests that they'd fail to oppose something so clearly opposed to the interests of the people of this state. Surely.

It's worth repeating that both the Lafayette appeal and the LMA friend of the court brief attack the previous 3rd Circuit ruling as much as the current one. This lawsuit has, in effect, reopened the door on opposing the "compromise" that lead to the current bond ordinance. Rolling back that legal basis for that compromise could benefit the city...Naquin and the incumbents may well lose advantages they'd thought they gained.

The incumbent providers in Lafayette are building themselves an deep hole. If the ugly opposition to Lafayette building an advanced network that the incumbents refused to build themselves wasn't enough to convince voters--and consumers--that BellSouth and Cox didn't play fair then perhaps the nastiness over New Orleans post-Katrina wifi system would. Or if the blatant attempt to steamroller the state with a Video Francise law that would have originally deprived (mostly small) localities of franchise fees wasn't enough to convince you that they had a complete disregard for anyone's interest other than their own well maybe making the French channel inaccessible in one of the few strongholds of French in this country and pulling the Weather Channel during hurricane season would.

If none of that convinced you that the incumbents are NOT good corporate citizens then maybe tinkering with the bonding authority of the state and every city in it in order to try and gain an unfair advantage over a single small city will.

This whole thing has gotten ludicrous and people's anger is both justified and palpable.

Update 11:00: If you'd like to get a look at the document filed by the LMA it can be found on the web at the inestimitable Jim Baller's site. The local authors speak surprisingly clearly and the resulting article is quite readable if a slow slog for the unititiated. There's even a little history lesson the evolution of the code, the economy, and their interaction! (This is the second time recently I've found legal documents on this arcane topic readable. If this keeps up I may have to change my opinion of lawyerly writting.)

Monday, September 11, 2006

"Louisiana Municipal Association joins fiber court fight"

The Louisiana Municipal Association (LMA) filed its friend of the court brief supporting Lafayette in the fiber fight Friday, according to a story that appeared on the Advertiser site this afternoon.

The LMA argues that the Third Circuit's decision is out of line with previous law and practice saying:
“Under Louisiana Law, a ‘pledge’ has always included the right to use a stream of cash to pay a credit or principal and interest as these come due,” LMA said in its court filing.
The brief contends that this has serious consequences, the decision,
if not corrected, could call into question virtually any local government’s ability to pledge money to repay bonds, officials say.
The attempt to run over Lafayette using legal bullying is turning out to have serious consequences for other communities. It's good to have an ally in this fight.

Sunday, September 10, 2006

"Can Cox be called our 'digital-age friends?'"

Anger over Cox's recent channel changes continues unabated. The most recent letter to the editor is particularly upset about the loss of the sole French-speaking channel from the lineup.

In a city where the Census Bureau data indicates that about 13% of the population speaks French in the home that's a good question. (The percentage of French speakers is bound to be much higher.) The talk I hear about town focuses on the fact that while the one French channel was moved off into the stratosphere of high numbers and high prices a major new service package of multiple channels and attractive programing was offered in Spanish (whose speakers are about 2% of the population). Preserving the unique heritage of the region would be hugely helped if there was a similar package in French.

Cox wants Lafayette to be more like Baton Rouge because it would be more convenient for them.

But the citizens of Lafayette aren't interested in being more like Baton Rouge.

Cox needs to wise up and actually serve the communities they are in rather than trying to make one size fit all. The days of their monopoly are numbered.

Saturday, September 09, 2006

"LUS: Municipal bonds at risk"

Kevin Blanchard at the Advocate has posted a worth-while read on the city's appeal to the Louisiana Supreme Court.

The crux of the story he tracks out is Lafayette's contention that the Third Circuit's ruling is dangerous to the municipal bonding process state-wide.
The appeals court decision that blocks Lafayette Utilities System from issuing telecommunications bonds backed by utilities revenue threatens all municipal bonds and should therefore be overturned, according to an LUS appeal filed Friday to the state Supreme Court.
That danger was a point that was raised after the previous lawsuit by BellSouth--the one that LUS/LCG chose not to appeal--and abandoning the lawsuit made some observers outside Lafayette very nervous on that account alone. As I mentioned in my post last night on this issue the Louisiana Municipal Association is expected to file a friend of the court brief in support of Lafayette that addresses their concern over the way the Third Circuit ruling undercuts existing municipal bond practices.

Blanchard does his usual exemplary job of explaining arcane matters. Give the article a read.

Lafayette Appeals to the Supreme Court

It's official: Lafayette filed its appeal of the third circuit court's recent decision to the supreme court Friday. They've filed both a writ of ceriorari requesting that the State Supreme Court reconsider the third circuit's decision and a request for an expedited hearing in accordance with state law.

It's the first appeal of any sort that Lafayette has filed since the fiber battle moved onto the legal stage. The underlying truth is that Lafayette doesn't want to be in court. It wants, desperately to be building the system the people authorized. It's the corporations and their agents that are happy to be in court -- or in the legislature or in regulatory hearings--anywhere but out in the streets actually competing. The stark contrast between the community's goal of "getting it built" and the incumbents goal "delay" plays out most noticeably in the way decisions to appeal a court's finding against you. The incumbents are, mostly, happy to lose--and lose they have on multiple lawsuits--for a loss means a chance to appeal and serves their ultimate goal of delay. For Lafayette a loss means choosing between accepting the delay the incumbents want and serving their ends in that way or deciding to revamp their plan to avoid the delay of appeal.

Until now Lafayette's leaders have chosen to end delays by conceding points and moving on. This worked and played out to our advantage with the referendum. The city and people of Lafayette won and the incumbents failed in their intent of stopping the project through forcing an election. The election confirmed the judgment of the folks we'd elected to do the job but also legitimated the project beyond all doubt.

But that hasn't worked out as well with the giving way on the legal issues concerning a pledge. We went back to the table and rewrote the bond issue the last time it was successfully appealed in the third circuit. That rewriting turned out to not satisfy the incumbents who sued anyway--but withdrew their suit after Lafayette agreed not to pursue a multipronged attack on (un)Fair Competition law. A lawsuit went forward anyway--one fueled by invisible sources and having only one mysteriously motivated Lafayette resident. Occams razor: the simplest explanation is that the incumbents are behind this one too. This time avoiding delay by giving way has not worked out for Lafayette. Nothing, in the end, was gained by giving up a decent shot in the post-Katrina legislature for rolling back that recent law that was preventing both New Orleans and Lafayette from moving ahead with ambitious projects.

This appeal is a good thing, I think. It is my hope that a lesson has been learned: Making deals requires that you have an honest person sitting across the table. If you don't there's no point in the pretense of deal-making.

The Writs:
The writs are actually interesting (for legal documents :-) ).

The request for an rapid hearing cites law but also cites the economic damage done Lafayette and Louisiana by delaying economic development in the wake of Katrina and Rita. The document claims that every .1% rise in interest rates cost the citizens of Lafayette 1.7 million dollars. Or 17 mill for every 1 %. (Your Friend in the Digital Age...Sure.)
... the importance of the fiber optics project to the citizens of the City of Lafayette – and, indeed, of the State of Louisiana – cannot be overstated. One of the purposes and objectives of the several lawsuits which have been filed to stop this project is delay. Delay in the issuance of the bonds necessarily means that interest rates will increase, thus increasing the ultimate cost of the project, with resultant higher costs to consumers. Under the current market conditions, it is widely feared that interest costs will continue to rise. In the instant case, an increase of even .1% in interest rates would result in an increase in interest costs of approximately $1.7 million over the life of this project.
The appeal itself interestingly goes back to the city's previous loss and asks the court to reconsider the concession the city made then. Back then the city decided not to contest a bit about "pledges" and wrote a new ordinance that adopted points the 3rd Circuit had called for. Now it asks the Supreme Court to reexamine that reasoning.
... the Third Circuit failed to recognize this well-established form of pledge. Instead, the Third Circuit required a “default” of the bonds secured by the pledge, prior to the creditor being able to use the stream of income. This decision will have an immediate and potentially devastating impact on Louisiana’s municipal bond market, creating market risk for bonds and threatening the very ability to issue bonds at reasonable rates. Necessarily, the effectuation of public projects utilizing revenue bonds will suffer.
I understand that the Louisiana Municipal Association will file a friend of the court brief in support of this point. More is at stake than Lafayette's project. The Third Circuit is writing new law.

The appeal is actually pretty readable if you want to get a sense of what the conflict is really about and what motivates the city. Even though there is a fair amount of structured repetition (apparently the forms must be followed) its well worth a patient read.

Thursday, September 07, 2006

Supple--"More of the Same"

"More of the same" was the catch phrase in two emails and a conversation I had this morning regarding Tim Supple's latest attempt to frustrate Lafayette's hope of building a fiber-optic network.

What's been most consistent about Tim's various positions on the issue of Lafayette's fiber plan is that he opposes whatever is on the table right now--and that he supports whatever would give BellSouth and Cox an immediate victory.

Supple's history is disturbingly easy to read. He came onto the scene backing a petition to force LUS and the city to bring the fiber initiative to a vote. During that time he wanted to claim neutrality on the fiber plan itself but was pushing for the same goal Cox and BellSouth had pursued in the legislature and in their public statements. He was fighting for a vote where the city would be unable to spend money to defend itself against incumbents who would have huge sums of money to spend in addition to owning the crucial cable medium. Understanding that it is not surprising how many of those "neutral" petitions were circulated. BellSouth did a lot of it by putting the petitions in the trucks of workers as they rolled out to install or repair service. Under pressure from both bad publicity and its union, BellSouth finally took those petitions off their trucks but no one would ever answer the question of how many of the signature the petition got were gathered by BellSouth workers. In the end Tim and the corporate petition backers weren't able to get the modest %15 of the voters called for by charter. A legal challenge to try and change the rules concerning how many signatures they'd need also failed.

Not missing a beat Supple joined the lawsuit BellSouth and Cox had initiated trying to force a vote through suing the city of Lafayette. He and his allies continued to intermittently claim neutrality on the question of the fiber build itself but their actions belied any claims of neutrality. As with the petition, it was clear that the immediate beneficiary was the incumbents and that Supple and fiber 411 were backing what the corporations most desired at the moment: a referendum which put all the advantages with them. That lawsuit failed at the first level but was reversed on appeal. The city decided to avoid the further delay and to lessen its potential disadvantage by adopting a referendum initiative under a different law than the one BellSouth was suing for. That mooted the BellSouth/Supple lawsuit, the referendum was held and BellSouth, Cox, the fiber 411 trio that Supple was one of lost. Resoundingly.

Immediately after the referendum was called fiber 411, which had regularly claimed that it had no purpose beyond pushing a vote on the issue "discovered" that the business plan was bad and didn't miss a beat in becoming the incumbent's only local allies. Press releases continued unabated. Only now they urged a "no" vote.

There were debates and letters and a couple of different bases for opposing the project--one of which was the current line about favoring an "open" network. But the pattern of history is very clear. Tim Supple's actions, as opposed to his words, have always worked to the immediate advantage of the incumbent corporations and to the disadvantage of Lafayette. The rationales have been high-minded but the effect has been unmistakeable--as has Tim's isolation from mainstream opinion in Lafayette.

Today's plan:
The current suggestion follows the pattern of earlier attempts to block the fiber plan's advance in that it appears to not be completely against fiber but would have the effect, if succcesful, of working to BellSouth and Cox's advantage. It's not a new idea--even for Tim-- and emerged during the openly anti-fiber phase of Supple's opposition to the fiber initiative.

Sweep away the hype about BellSouth's (un)Fair Competition Act and you'll see that today's essay suggests is that LUS abandon the plan the people voted for and put in place the one Tim prefers.

It's a bad idea.

For a guy that once hung his hat on respect for a vote of the people it a little strange to see Tim, after having done nothing during fights in the legislature, the state regulatory commission, and multiple lawsuits to voice any support for the plan the people of Lafayette voted for 62 to 38%, to find his voice only now. And to use that voice to suggest something the people never voted for--but which would further delay the approved plan and alter it so radically that we would be faced with starting over with something entirely new. Who would benefit if Tim succeeded. Not Lafayette--the same people who would have benefited from his petition, and from his lawsuit: BellSouth and Cox.

If backing a plan that the people voted for turns out to not be so important to Supple as it once seemed then you'd hope that his other big claim --that he was against the plan because it was a "bad business plan" that was "too risky"-- might explain his latest position. But that turns out not to be the case either. Under Supple's new plan the city would assume all or much of the fabled "risk" he feared of building a fiber network and then rely on private partners to make sure that the system made enough money to pay for itself. Only one thing is certain in such private-public partnerships: that the cost to the consumer would rise. LUS' big advantage through this all has been that it doesn't have to make its money back on the 3 to 4 year schedule that private businesses do. It was planning to stretch out its repay of start-up costs for 20 years. Services offered through private providers will simply be more costly. Any competition that might occur would be in the range above what LUS would need to make its payback. LUS doesn't need to charge any more than that, but must charge at least that much. Private providers profits must be added onto that fee.

Further, the track record of such public infrastructure/private providers hasn't proven stellar--in places where legal requirements force it on cities the big private companies refuse to use the network and the new "competitors" don't do a good job of keeping or promoting use. Fully public networks that are treated as a public utility have been much more reliably successful.

It's not particularly politically correct to notice it but LUS has already tried the public/private arrangement and it hasn't worked very well. LUS currently wholesales fiber optic connectivity around the city. While the project earns money and repays its construction costs prices at the retail level have been high, few providers have taken advantage of the possibility, and almost all those who are wholesaling LUS bandwidth are using its low prices to buffer its costs in providing very high-end expensive services to a very few large users. Tim Supple himself used to complain about the high costs and use it to unfairly imply that LUS' costs, not his providers profit margin, was high. (If he's now happily using fiber I'm guessing that position is defunct too.) The robust, cheap market in small-business bandwidth that LUS hoped private retailers would develop hasn't happened. The market has simply not risen to the occasion. Everyone is looking, instead for easy pickings. Investing 125 million of the people's money in order to provide self-seeking entrepreneurs with a cheap way to cherry-pick the high end is not a good use of the community's money--and not what people voted for.

It's a bad plan--and a weak business proposition to put the payback for an expensive capital investment in the hands of people who don't have any interest in paying back the capital and whose only interest in the system is to make short-term high-markup profits.

The ray of sunshine
Underneath this talk about an open network is the one bright spot--it edges closer to acknowledging the actual power of a dense Fiber to the Home (FTTH) network. By abandoning earlier claims that what the private providers are willing to give us is plenty good enough for Lafayette the opponents start to admit that we really do want and need a big bandwidth network in Lafayette--and that the public ought to own it. If we hadn't seen similar positions turn back into simple oppositions to any public plan at all I'd be encouraged. But, as the history shows, its hard to take the admission as very heart-felt.

The real power of fiber networks:
What we still haven't come to grasps with as a community is that a fiber-optic network will be enormously powerful. It is that power that has united BellSouth and Cox; they at least understand that a publicly-owned fiber optic competitor is more terrifying in Lafayette than their largest private competitors. Lafayette's success in a pure form would break up their cozy monopoly-duopoly dance and put into play real competition across the entire range of telecommunications services. Prices would be lower and the fiber network, once installed, would have practically unlimited ability to expand. Future service expansion would only require an electronics upgrades. With LUS leading the way it is quite likely that other cities would see the advantage and follow suit. If enough communities did so it would be very hard for the private providers to come up with the capital to match them--and the capital markets would almost certainly not consider it a good investment; even if successful the payback would be too long for the bankers.

So the private corporations are right to fear a fiber optic network. They know quite well that the first fiber-optic network in any area will have a price and capacity advantage that will make it effectively unstoppable. In most cases an effective monopoly will be the result with the fiber network owner taking any connectivity business that it wants. Nobody likes a monopoly but fiber is coming, it will be dominant, and the only real question will be who owns and controls it.

We are lucky enough in Lafayette to have a choice: we are positioned to own our future. I don't think there is any real question of what the right decision for Lafayette would be: We shouldn't hand any part of that control over to anyone whose interest are no our own. Keeping it public will mean endless wrangles in the council but sticking with a public plan will yield a system whose only interest will be in serving its owners: the people of Lafayette.

Tuesday, September 05, 2006

"Cox changes are an attempt at extortion"

The letters complaining about Cox cable continue to roll in to the Advertiser. (A recent letter complained about slower-than-advertised internet speeds.) The latest is basic:
The recent "changes" brought forth by Cox Communications are nothing more than extortion-to a captive audience...

It's time we end this business' strong-arm tactics. Vote with your pocketbook!

Given that Cox continues to insist that the people of Acadiana never should have had those "extra" channels in the first place and continues to wave away local anger with the explanation that "people don't like change"--ignoring the idea that locals really are losing losing popular, long-standing stations that people feel are valuable-- it's easy to understand why people are frustrated.

Cox made this change for the money and for its operational convenience. Had they been willing to take a little less money and do a little more work there's no technical reason they couldn't have continued the old setup. That's hard for Cox to admit but, on the balance, being honest would be better for them in the long run; right now they are training their customers to not believe them. Or, of course, they could have tried actually sacrificing just a little to keep their customers happy.

But that would be the behavior of a company with enough competition to keep them honest.

And we don't have that. Yet.

Saturday, September 02, 2006

Larry Amy Still Wrong

Larry Amy is back at it again. Connoisseurs of the fiber fight will recall Amy's time on the stage during the anti-fiber fight. In a series of letters mostly found in the Independent Amy started out a simple ideological opponent of the plan (expressing the idea that fiber is good but private corporations should control it) but rapidly matured into a proponent of wireless who dismissed fiber as unexciting and embraced wireless as a cheaper alternative. Mike Stagg, a principle on these pages, responded in the Independent to the later-stage Amy claims about LUS' fiber plan. Readers who'd like a little refresher on that basic argument of fiber vs. wireless are referred back to Mike's essay.

The ongoing problem with Amy's various analyses is that he wants his reader to believe his opinion is based on technical rationales rather than his ideological position. There's nothing wrong with having ideologically-based judgments on political issues--unless those commitments lead you to misrepresent the evidence you place before the community.

In this case it is simply untrue that the chief problem with LUS' fiber that the business plan is not viable. The evidence is overwhelming that the fiber plan will be successful--not based on what its proponents say but on the level of panic displayed by BellSouth and Cox who have, at each and every turn, opposed the plan and when they failed taken action to delay the plan's implementation and have pursued laws, regulations, and lawsuits designed chiefly to drive up the costs to local citizens who purchase LUS' product. If you have any doubt as to the financial
viability of Lafayette's plan you have only to look at how the specter of competition from LUS has driven to blood-enemies into an alliance to oppose the express will of the community.

That's proof I think anyone not blinded by ideology could understand.

As to Amy's return to the theme of "wireless is the wave of the future:" he's missed the mark. Big Broadband is the wave of the future. Really big broadband at 100 meg to a gig or more. It will enable astonishingly cheap "downloadable" high definition "TV," telephony that you will hardly recognize as it integrates itself into all sorts of appliances and, most significantly for the present discussion, wireless mobility. It remains uncertain whether WiFi, WiMax, or some form of cellular 3G will dominate in that wireless space. What is certain is that if it is to be available to the whole community with even the bandwidth capacity of current wired services--say 5 or 6 megs--it will have to be funded by a dense fiber network.

We need to build the crucial technology, fiber, first. Wireless built on top of a real broadband network will be not only cheaper but vastly more useful.

The fiber fight, appears to be heating up again, at least in letters to the editor. It's worth noticing that the arguments against are the same that failed to convince Lafayette before the election.