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.

2 comments:

Andre said...

I have just read Tim’s letter in the Advertiser and it literally dripped with disgusting self satisfaction. The fiber to home proposal has been an interesting thing to see play out. Many people have voiced many good points discussing the options and alternatives. I have talked with many people on both sides of the fence about the issue.

A wise man once said that it is by our actions we are known. Mr. Supple can say whatever he likes. His actions demonstrate that he has no interest in advancing fiber in Lafayette; Quite the contrary. Isn’t it curious how he somehow always ends up singing the tune of whatever will benefit the monopolies that are fighting this proposal?

It makes sense that Cox and Bell South fight fiber. Who would willingly give up a situation where your company commands prices for people that MUST use your services and just become one of several vendors that consumers can choose from? Fiber means a great loss of jobs and revenue for the two companies. No one in their right mind would just give up their job. But, it is plain to see that cable TV and wired single service telephone are heading the way of the barrel maker and the cobbler.

So, like the eighteenth century British textile workers, the Luddites, who destroyed factories that superseded hand woven fabrics, we see Cox and Bell South trying to preserve the “Bad Old Days” of consumers in a stranglehold. Eventually, everyone will have fiber or some equivalent.

The important questions are:

Does Lafayette do it now, or do we wait twenty years when the monopolies can’t hold back progress any more? Does Lafayette benefit from being on the bleeding edge of a national trend? Can a pro business, progressive city in Louisiana lead the Country? Do we allow a Luddite Crusade to circumvent the majority opinion of Lafayette parish?

It is better to ask intersting questions than to have all of the answers.

John said...

Well Said Andre....

I'd really like to get down to working with all those things we have dreamed of doing with fiber--having to turn our energy to constantly defending what should have already been secured is enormously frustrating.

I spend part of this afternoon talking with a graduate student who is trying to understand what will be possible for education and learning more generally when we have a cheap, big pipe in Lafayette with ever subscriber having equally big bandwidth inside the system. It's never been tried. He's excited.

Hell, I'M excited. But I can't begin to dream or sell it to my educational colleagues until it is secured.

So we soldier on. We can't begin to really plow and plan until the war is over.

Thanks Andre, for your part in the dreamng.