Monday, January 30, 2006

"Japan, Soon to Be Fiber Broadband Nation"

Here's an interesting tidbit from Japan: The country, one of the most wired in the world, (the US is barely in the top 20 any more) is solidly in the midst of a shift to fiber to the home (FTTH) as the preferred method for bringing broadband into the home.

Figues reprinted in Om Malik's site show that as the market expands the major share change is from ADSL to Fiber To The Home (FTTH). Like most of Asia (and for that matter, the world) the predominant broadband delivery tool has been some form of DSL pivoted by the telecoms. (Our peculiar regulatory history has a lot to do with cable being a contender here.) Until recently DSL had upwards of 3/4s of the market but that has fallen dramatically to 2/3rds in the last year.

Malik says:
Japanese trends could prove to be very telling: while ADSL can be a good interim solution, fiber might be the better long term bet. (Hat Tip, Dirk van der Woude)
What's interesting about this is that as the market matures it is using xDSL as a stepping stone to develop the market for and to fund the shift to FTTH. But that stepping stone won't be available in the US. Advanced DSL (ADSL, VDSL) has barely started in the US and has nothing approaching the penetrartion rates (and hence the income potential) of Asian systems. The fiber to the node plans advocated by ATT and BellSouth are intended to be the same sort of stepping stone process we see in Japan--building out fiber closer to the home, then eventually replacing copper all the way to the home with fiber.

But they've had this plan for literally decades and it simply is not working. DSL sales are not producing the incentive to build out a real national network. Every Telco has been driven to offer simple DSL as the cheaper alternative to the Cableco offerings. Simple DSL doesn't have the capacity to build up the market and at fire-sale prices with relatively low penetration it can't supply the income to fund the shift to fully modern systems.

Verizon, seeing the handwriting on the wall, has abandoned the futile hope represented by using DSL as a stepping stone and is trying to leap into the future by bypassing the fiber to the node/DSL plans that ATT & BellSouth are forced to stick with due to their relative poverty. It remains to be seen whether even market-leader Verizon can succeed and the market has been reacting harshly recently to the continued drain that the fiber build represents.

Why does bootstrapping work in other countries but not here? A good question. An important one. One I'll reflect on in a later post. But a hint: We've so fragmented our market that no one company exists that can afford a to build a ubiquitous, national, broadband network. That's not the fault of regulation, but the fault a band of politicians that thought they could legislate away the facts of economics. Our falling status in broadband is the clearest sign that they were wrong. And wrong to try. More later.

Friday, January 27, 2006

US poised to drop out of top 20, Slovenia surges

You may recall much moaning and gnashing of teeth when the US--where the internet was invented--fell to 16th in broadband penetration. Latest reports peg the US at 19th and still dropping. With Slovenia's growth outpacing ours you'll get to see us dropped to 20 by an Eastern European country that didn't exist a dozen years ago.

Those incumbent guys--they keep up with the Jone's, don't they?

(Source: telecompaper Via WebSiteOptimization)

New Orleans Bids for Semi-Sovereignty on Telecom

Steve Sabludowsky has gone public with legislation that the City of New Orleans will try to get considered in the upcoming Special Session of the Louisiana Legislature that would open the way for any municipality or parish to provide wireless telecom services for its citizens.

You can request a copy of the law from Steve by going here.

The measure comes in the wake of the nationally-publicized spat between New Orleans and BellSouth over the city's provision of free access to its public safety wireless network to the general public in the Crescent City. In a typical huff, BellSouth Louisiana top dog Bill Oliver withdrew an offer from the company to donate one of its Katrina-ruined buildings in New Orleans to the city for use as a police headquarters. Some deal! BellSouth would have gotten probably gotten a significant tax break for the donation and the city would have been stuck with the bill for refurbishing the building.

I've known about this idea for a couple of weeks and actually tried to talk Steve (and through him, New Orleans) out of this approach when he called me about earlier this month. Having read his explanation, read the bill and talked to him again last night, I'm convinced that this is a well-intentioned but misguided bill that has little chance of ever becoming law.

Let me explain.

The impulse behind this bill is absolutely correct. Local governments need to reclaim the right to community sovereignty that were taken away by the so-called Municipal Fair Competition Act of 2004. That act began its life as an attempt by BellSouth to bar municipalities from any telecom infrastructure or service delivery. It emerged shortly after LUS announced that it was considering building a fiber to the premises project in its service area (mostly the city of Lafayette) in Lafayette Parish.

Thanks to intervention from Governor Blanco, negotiations ensued between the incumbents (phone, cable companies and their trade groups) and the public network folks (LUS, the Louisiana Municipal Association, the Police Jury Association of Louisiana) and the representatives of the various parties.

As in most compromises, both sides came away with parts of what they wanted and some things they did not want.

Lafayette and LUS did not do quite as well in the negotiations as they originally thought. That has been borne out by the string of legal actions BellSouth has launched against the project since the law was passed. As a result of that, Lafayette and LUS have said they want to repeal the Fair Competition Act. The core issue here is that BellSouth never intended for the law to be a true compromise and worked to insert provisions in the law that provided them a platform from which to launch legal attacks against the LUS project and others that might come down the pike.

With this attempt to carve out a wireless exception to the Municipal Fair Competition Act, New Orleans is poised to repeat the mistake that Lafayette has since learned it made in dealing with BellSouth in the legislative process. The company will work under the guise of compromise, but will all the while be working to insert provisions that will undermine whatever compromise the appear to be a party to.

It's called acting in bad faith.

It is the company's documented track record with Lafayette. It will be they modus operandi in any dealings with this proposed "exception". That is, the knife used to attempt to carve out the apparent exception will then be used against local governments that try to use the law to deploy the kinds of services described in it.

There are significant hurdles to be cleared before the bill can be considered in the Special Session, not the least of which is getting it either included in the call for the session or declared germane to the call the the legislative leadership.

Significant challenges will arise in the legislative process itself. The Louisiana Legislature is like a field office for BellSouth when it's in session. The company has a small army of registered lobbyists there (about as large as the group of lobbyists representing the entire gambling industry!). Those lobbyists have long-standing personal relationships with legislators who know "the phone company" but not much about technology; as a result, they can get provisions inserted or removed from the bill (or hijack the entire bill) at just about any spot in the legislative process.

Another political question is whether the Orleans Parish delegation will back the Nagin administration on this effort. New Orleans politics is historically fractuous and new pressures and fissures have emerged in the wake of Katrina and in advance of upcoming municipal elections.

Finally, to support the kind of robust wireless network the bill envisions in a densely populated urban area is going to require a very robust terrestrial infrastructure (like fiber) otherwise, the speeds will drop to near-dial-up levels. The law, as I read it, would leave the Municipal Fair Competition Act in effect over such infrastructure, raising the question of where the local governments would get the infrastructure to support the wireless network.

Rather than leave local governments exposed to a guaranteed prolonged and expensive fight in the courts over the meaning of "is" in such legislation, the correct remedy is to removing the power of phone and cable companies to set any terms on how local governments can respond to the bandwidth needs of their communities.

The Municipal Fair Competition Act gave those companies power over local communities that they did not have prior to passage of that act. The problem is the power they have, not over the infrastructure or modality over which that power extends. New Orleans wants wireless. Lafayette wants fiber. Other communities might like to be able to do one or the other or both. Why should they have to in any way jump through hoops designed by the incumbent network owners in order to do that?

Carving a "wireless exception" is a half-measure that would leave the core problem in place: at least one bad actor incumbent having control over the infrastructure destiny of communities. Instead, let's go for the full restoration of community rights and work together to repeal the Municipal Fair Competition Act.

Thursday, January 26, 2006

The Boudin Link

Occasionally, and especially during the Mardi Gras Season, I post something that's a bit of fun about our unique corner of the world. Put this post in that category. If you're a local fan you'll find it invaluable; if you're a sympathetic visitor it should give you a little taste of our local culture's entanglement with food. (Another taste? See King Cake)

The Boudin Link is a great web site that I ran across for the first time recently. It'll never win an award for eye candy (I should talk) but it's got great reviews of local boudin haunts for lovers the unusual sausage and very healthy guestbook where you can argue with the site-owners' judgments and suggest places for them to review.

Some Background:
Boudin (aka boudin blanc) is a great cajun-creole rice and meat sausage that is unique to Louisiana. (Francophiles may be reminded of French boudin blanc sausage. Clear that association away. No relationship except for the casing.) You can drive down any road in the parishes locally labeled "Acadiana" and likely find some local meat market/boucherie, fast food place, convenience store, or local grocery selling long pieces of the soft links. The most common, and authentic, way to eat the dish is to grab a couple of links, wrapped in butcher paper for lunch, get a beverage, sit in your vehicle in parking lot, and chow down before heading back out to work. Good. Hearty. Cheap. Typically the links have been sitting in or just above a hot water bath so you've got to be careful that juices stay in the butcher paper you've carefully arranged around your link. If over the noon hour there aren't two guys in trucks trying to get their fingers clean there's something a little better in a 10 mile radius. People have their favorites, and argue about meat quality, how much liver should be included, the firmness of the rice, proportions of rice to meat, and the all-important questions of spicing and vegetative add-ins. Such issues divide families and can make necessary trips to two meat markets before family gatherings.

Preferences about these matters is intensely local, the people who buy at the neighborhood store have things to say about about "their" product and the local butcher is wise to add spice and percentages of green onion tops as local opinion dictates.

There are, of course, more upscale versions, and newer byproducts like fried boudin balls and boudin in puff pastry that take our local culinary obsessions to places disdained by the old school. (Not, given how lately rice came to our culinary traditions, is that school so old...but what appeared on momma's table or daddy's dashboard defines tradition after all.) There's even a boudin fast food chain. Smoking the links is popular but considered, well, a little effete since it produces a product whose juice stays in the casing and doesn't run down past your cuffs to the elbows if you're an inexpert eater. The taste makes up for the fastidiousness in many people's minds. (Bear in mind that saying a food is messy is not a pejorative in the world of Louisiana's culinary traditions. We favor eating crawfish by a method which involves snapping open the shells of creatures hot from boiling water. It's a process which insures widely dispersed droplets of highly seasoned water and wet elbows for all but the most dexterous and fastidious eaters.)

Like most ethnic dishes boudin originated as a cheap way to produce a tasty, filing dish and was later elevated to its status as a signature dish of the community. Its cousain, blood boudin (aka boudin rouge in contrast to boudin blanc) used to be available on Main St. in Broussard. I don't know where you could get it now. Nobody knows where the dish originated or how it developed the now-traditional water holding bath and butcher paper presentation.

The Boudin Link Site
What fans will like are the reviews and comments. Even if you can't get in your car and go visit just the read is worth it. The reviews are as homespun as the food itself.

Samples:
Check out the pink T-Boy's Slaughter House page. Don't miss the divine rays spilling over the unremarkable facade of the building. Rated A+. From the comments section:
Comments: If you find yourself in Mamou you should find T-Boys. Even if you don't have a reason to go to Mamou you should find one. Perhaps the simple fact that Mamou is the center of Cajun music is a good enough reason (check out Fred's lounge). Perhaps you want to see the most spectacular Mardi Gras run in the world. Perhaps you just want to go for a nice drive into the Cajun prairie land. Whatever the reason, T-Boys is worth the trip. Make sure to check out the GIANT boudin balls (2 for $1).
How 'bout Fremin's Food and Furniture? The name's not enough!? (Rated A) Well...from the ambiance section:
Ambiance: An amazing place in an amazing town. This is, quite possibly, the only place around where you can buy a link and a lamp at the same location: Fremin's effortlessly combines food and furnishings. You can also buy fireworks (in season) and giant color banners from a state-of-the-art banner-making printer. Yep. Fremin's has it all, including some great boudin and other outstanding prepared foods.
Our neighborhood shop, about three blocks away, is Bruce's You Need A Butcher. (Yet another great name.) In addition to good boudin and hand cut meat you can get huge sacks of rice if you want and some old-fashioned candies. The guy's give the links a B; I'd make it an A and I don't think its only neighborhood patriotism. They beat out all the competitors in a blind family taste-off a couple of years ago. A good link for folks whose preferences place more emphasis on the pork and seasoning than rice or liver. A good link to home-smoke because of the predominance of pork. The boudin link's description:
Presentation: Wrapped in a piece of butcher paper: juices leaking from the sides.
Casing: A decent, firm, and breakable casing.
Rice/Meat Ratio: More meat than rice.
Texture: Moist and juicy with ground and meaty pieces of pork. The filling is loose inside the casing.
Spices: Medium/Hot.
Lagniappe:
Here's "a little something extra" I picked up while putting together this post. Too good to pass up:

Wanna see the sausage being made? Actually, unlike politics, this doesn't look as bad as you'd think. At least not at Poche's (my favorite country meat mart and restaurant). Don't miss the robot arm that lifts up the stainless boudin cart overhead and dumps it in the big funnel: Making Boudin. (Doesn't work? Try another format.)

How about haiku-form poetry, in French, about Boudin (and Pepsi)? Really, I'm not fooling you, no: The Boudin Trail. (Anybody know where I can get the video mentioned here?)

Comments? Who's is best? Why? (I'm feeling a little like living dangerously today. But I know the risk I take; if you think local passion about BellSouth is running high you've got no idea how strongly people feel about their food.)

"LUS optimistic on bonds cost"

Kevin Blanchard over at the Advocate writes a follow-up on Huval's fiber project remarks at Tuesday's council. (Remarks reviewed here yesterday.) As we've come to expect, Kevin adds useful detail to the story. The story highlights the central issue raised by Williams: whether the recent court ruling, and the city's decision not to appeal effect the business plan. The simple answer: No.

The reporter apparently went back to Huval for detail as to why this is so; asking about the interest rates that Huval briefly alluded to in the council meeting. Here's the boiled down result:
In 2004, LUS issued a feasibility study that included a general overview of the communications business plan.

In the feasibility study, LUS factored in an interest rate of 5.5 percent.

Huval said LUS is likely looking at interest rates nearer 4.5 percent now -- higher than previously thought, but still cheaper than the "conservative" rate assumed in the original business plan.
That's the good news...the fear had been that a ruling which (nonsensically, I still believe) forced LUS to go through a legalistic jumping in and out of default every time it applies provisions of the (un)Fair Competition Act would hurt the price of the bonds. Apparently that's not as big an issue as it might have been:
The court’s ruling will require LUS to rewrite a portion of its bond ordinance that allowed revenue from the overall utilities system to be used to make debt payments on behalf of the new communications system without the new communications business going into default.

Without that mechanism, Huval said, the project carries a greater risk to the bond holders and could have driven up the interest rate the market would charge the start-up company.

But in talks with brokers about the new court-mandated approach, "that has not been a problem," Huval said.
Reading between the lines, it appears to me is that the city and LUS have been out there trying negotiate a rewrite that navigates between the the judge's ruling and the language most comfortable to the bonding community--and that after running some new wording past the bonding guys our team is confident that new language can be inserted that will minimize the damage BellSouth hoped to inflict.

The wheel continues to turn. I'm now eager to see those bonds sold.

---------------------

I'll be blunt here: I hope BellSouth will leave us alone this time. They need to. They are risking their future in this community. As it stands now they'll have to come to a franchising agreement with this community to sell video in Lafayette. The feds may not step in and save them from local franchising. And they are developing a constituency here that will stand adamantly opposed to their making the same move at the state level. BellSouth's actions are fostering an organized community across storm-ravaged South Louisiana that not only wants to repeal BellSouth's law but will also adamantly oppose the state legislature moving to state-wide franchising of video and further cutting local communities out of the control of their own future. This is one of those "Make my day" situations: There's a part of me (the state-wide citizen) that hopes that BellSouth will hand me what I need to expand that growing coalition by continuing to oppose the expressed will of the people. After all, last week's arrogance is useful. But being able to point to current malevolence is a better tool, I have discovered... Go ahead. Make my day.

Wednesday, January 25, 2006

Fiber Tidbits

A few fiber Tidbits have come across my 'puter's desktop and off my TiVo since yesterday. The TiVo supplies documentation on last night's interminable council meeting and I pulled a few remarks from The Indpendent's pre-state-of-the-City-Parish-address interview that related to the ongoing fiber fight.

The Council Meeting:
Williams had responsibility for an agenda item asking for information on the ongoing legal wrangling over Lafayette's fiber project. The item came up near the end of a 5 hour meeting. Williams seemed to want many of the responses in writing. Not much new...some fiber is being laid as part of an increasingly successful wholesale operation. Terry Huval said that fiber was rolling in support of that almost every day which would be a definite pick up in the pace. Of obvious concern is the question of whether the legal setback would force a raise in prices offered the public. Terry says it won't; that even with the delays interest rates, while rising, have yet to meet the amount projected in the business plan. A silver lining in the delay is that prices for fiber optic equipment has been falling as the market matures.

Terry's remark that "new things have come out that will help us" was a tantalizing hint of good things to come. In context that was apparently referring to technical advances that could be used to increase the value of Lafayette's offering. There's been several technologies come to the forefront recently that Lafayette might be interested in, Quality of Service, Internet Protocol TV, and virtual network technologies have all firmed up in various ways. --I'm hoping for an announcement of 100 megs of insystem bandwidth when making connections between Lafayette citizens. --Consumers would still buy price tiers of 5, 10, 20, whatever megs but that speed would apply to the open internet, not local connections. (The digital divide document approved by the council endorsed this possibility if it were technically feasible.) This technique, pioneered to my knowledge by large university installations and Provo, Utah, would let everyone who bought any internet service from LUS, no matter how cheap, communicate with another at blazing speeds. The development and digital divide implications of such a move would be huge. It would be a introduce a real, structural change that would drive development of big broadband testbed applications for business to business use and for the normal consumers (as opposed to targeted at the wealthiest). Our public utility ensuring that every member of the public who uses public services could communicate on an equal footing has practical and symbolic value that would be hard to overstate in this uncomfortable moment of Lafayette's history.


The Independent Story:
The independent interview of Durel covers all the bases and I recommend clicking through for general civic reasons as well as fiber ones. But the material that might interest a reader of this blog are near the bottom where the interviewer (in bold) queries the mayor-president about fiber issues. Here's that section:
On the issue of fiber, it seems you've found a way to rewrite the local ordinance to address the appellate court's decision?

We're going to tweak it. We're not going to rewrite the whole thing. We're going to address just the areas that the appellate court addressed.

Does it affect the rate you'll charge customers?

The things that are most likely to change the rates are the constant legal battles we have with BellSouth and the potential of interest rates going up. I think the equipment and stuff like that are going down in price and not going up. The bond ordinance itself is not going to affect that.

At any point in this costly legal battle did you question the wisdom of LCG's legal team, since it had a hand in the very state law the 3rd Circuit court ultimately ruled our ordinance would be violating?

No. We did it for all the right reasons. Hindsight's 20/20. We got [BellSouth] to compromise because there was a law they introduced that completely banned municipalities from doing this. We were probably a little naive in thinking these people were sincere.

You've mentioned teaming with New Orleans, which installed a wireless network after the storm, to repeal the state law; are you still considering that?

I had breakfast with the legislators last week, and I told them this was one of the things that we need to introduce. Without that state law we'd already be giving people in Lafayette service.
What strikes me most are the remarks about naivete regarding compromises to the Local Government (un)Fair Competition act and the emerging movement to repeal it. As readers will know I'd love to see it repealed and these word from our elected leader are very welcome.

Tuesday, January 24, 2006

Cassard channeling John Mitchell?

Way back in the very early days of the Cox and BellSouth united opposition to the LUS fiber project (remember those bad old days?), local Cox honcho Gary Cassard appeared before the Lafayette Consolidated Government Council and delivered what I recall to be a threat.

The threat was that if Lafayette and LUS had the temerity to build out their own fiber network it might jeopardize significant new investments in Lafayette. Cassard specifically mentioned the fact that the LUS fiber project might imperil Cox's plans to build a new operations center in the Hub City.

Judging by the story in today's Daily Advertiser, that really wasn't Cassard talking. Turns out that the new Cox facility on Eraste Landry Road is coming after all — yes, despite the fact that voters have declared that they want a publicly financed fiber network connecting every home and office in the city.

Could it be that Cassard was not actually delivering a threat, but merely channeling felonious former U.S. Attorney General John Mitchell? It was Mitchell, President Nixon's attorney general, who soothed campaign supporters worried about liberal-sounding rhetoric coming out of the new administration with the famous phrase: "Watch what we do, not what we say."

Today's story is proof of Mitchell's maxim about what matters. Today Cox is building, not bluffing. Now, if they could only convince their erstwhile partners in the huff-n-bluff (BellSouth) to live life accordingly.

"Cox plans $10M expansion"

Cox has decided to consolidate its Acadiana services into a new 10 million dollar building on Eraste Landry according to a story in this morning's Advertiser.

That's a good sign for Lafayette and gives concrete assurance that Cox intends to stay and compete. As a consolidation it does not, unfortunately, mean new jobs (and may mean the loss of a few--a usual "benefit" of a consolidation move) but putting capital into a new building is a positive sign of Cox's commitment.

Sharp readers will note that the Advertiser's reporter Claire Taylor had to go to Sharon Kleinpeter for quotes on the news--Sharon works out of Baton Rouge and we heard from her very occasionally during the referendum. But until the first of the year we had our own PR contact here in Lafayette.

That change is the consequence of Cox absorbing Lafayette into it's Baton Rouge unit. Cox shed a large chunk of its subscriber base, mostly in rural areas, to pay for taking itself private and to upgrade some of the remaining systems. The largest unit put on the block was the former Middle America Division which included Lafayette. Cox decided to keep Lafayette (much to my sorrow) and attached it to the Baton Rouge unit which had been in another division. The story is unclear on how much of the former local administrative staff remains.

The change makes the combined Baton Rouge-Lafayette market a large one: 300,000 subscribers in total stretching from the Florida parishes across the basin to the six parish re Acadiana region for which Lafayette is a hub. An article in the Advocate last Tuesday said that made it Cox's seventh-largest market. Being a smaller part of a larger unit as opposed to the biggest part of a smaller unit is probably a wash for Lafayette. But it introduces special new difficulties for Cox vis-a-vis responding to Lafayette's fiber initiative. It was embarrassing to raise Baton Rouge's rates while leaving Lafayette's unchanged. That will only get much worse as the competitive atmosphere in Lafayette intensifies and Cox is forced to contemplate both actually lowering rates to meet LUS' prices and upgrading its service to meet the challenge of higher broadband speeds. Sharon Kleinpeter might well find it awkward to announce rate hikes in Baton Rouge while announcing rate reductions in Lafayette. Presumably they'll arrange to have those press conferences and "media availability opportunities" on different days.

Sunday, January 22, 2006

"BellSouth, Cox include local, concerned people"

Heather Deshotel says in a letter to the Advertiser that Bellsouth and Cox include local, concerned people. She's surely right. Unfortunately she's built her letter around a subtly different thesis: that BellSouth and Cox, by virtue of a few of their employees, should be regarded as local and concerned. That thesis is not true. Lafayette has had a graduate level introduction to just how disdainful the corporations BellSouth and Cox have been toward the citizens of Lafayette and how poor their citizenship is.

Most of her points I've already dealt with and I won't belabor them here except to say that it's a wild mischaracterization to say that LUS "broke the law" for believing in an interpretation of the law that its author, the other participants in negotiations (including apparently Cox who did NOT join BellSouth's lawsuit), and the PSC (who supported LUS' position in court) also believed correct.

One point I haven't covered recently, and should have, is the good news out of Bristol, Virginia. You'll recall that both the city and the fiber opposition made reference to Bristol. As the history has rolled out, the city's view has proven to be more accurate. (For a particularly dishonest use of the Bristol experience, see Lafayette Pro Fiber's post on the last-minute mailers that featured a doctored pull quote from the Bristol paper.) The opponents are no longer saying that Bristol has failed commercially; Bristol's retail success is now firmly established. Instead they are trying to attack Lafayette by saying Bristol hasn't brought commercial investment to its struggling corner of Appalachia. That might seem like a safe assertion about a new business--and the sort of nonsense we can expect to be said about Lafayette in the first two years of its operation. As unfair as this kind of demand is, in the case of Bristol it is also untrue. (Heather, and the folks she talks to, should have done the research.)

Bristol's fiber optic network has been credited (in a local story) by Southwest Virginia's US Representative with helping to attract 700 new jobs to a rural, coalfield county:

Bristol Virginia Utilities, which already has wired parts of Russell County, will complete the work along about 160 miles of roads, Boucher said... [U.S. Rep. Rick Boucher, D-9th.]

Fiber-optic service in Russell County was important in helping attract about 700 new jobs there this year, Boucher said.

"Extending and linking the Cumberland Plateau and Lenowisco fiber-optic backbones promises to provide even greater opportunities for new economic development and job creation throughout the coal-producing counties of our region," he said.

Nobody claims that Bristol Virginia Utilities was solely responsible for that gain. It wasn't. And nobody will claim the same for LUS when similar results start to roll in. The local equivalent of LEDA and several regional technology groups supporting technology parks clearly had a hand in it. Still, the district's federal representative chose to single out BVU for praise. BVU's capacity, and willingness to step up to support local initiatives where the region's commercial providers apparently were not, ought to be noted by even folks from Scott. LUS will be, like BVU, a pro-active, local supporter of initiatives that boost Lafayette and Acadiana. We can't expect BellSouth or Cox to play that role--their interests lie solely in finding the maximum return for every dollar spent. LUS' interests, by contrast, lie in doing what's best for its community. That, at the root, is the difference between a local public utility and private, corporate providers like Cox and BellSouth.

And no amount of misdirection is going to change that basic equation.


Friday, January 20, 2006

Lawrence Lessig tears 'em a new one

Every so often you run into a piece that's so dense with good sense that you are hard-put to pull out appropriate teaser quotes. That's the way it is with Lawrence Lessig's recent tear on net neutrality. He vents his frustration with the sort of nonsense that tries to justify handing the internet over to the corporations that own the last mile wires by pretending that the internet succeeded because of its "unregulated" environment. 'Tain't so as Lessig points out:
...when the Internet first reached beyond research facilities to the masses, it did so on regulated lines — telephone lines. Had the telephone companies been free of the “heavy hand” of government regulation, it’s quite clear what they would have done — they would have killed it, just as they did when Paul Baran first proposed the idea in 1964. It was precisely because they were not free to kill it, because the “heavy hand[ed]” regulation required them to act neutrally, that the Internet was able to happen, and then flourish.

So Waltzman’s wrong about the Internet’s past. But he’s certainly right about what a mandated net neutrality requirement would be. It would certainly be a “complete step backward for the Internet” — back to the time when we were world leaders in Internet penetration, and competition kept prices low and services high.
Good stuff, and follow that link in the quoted text for a long, calm dissection of how the internet was born in government research and forethought and first thrived under mandatory "open access" rules. Also don't miss the classic little logical structure he builds at the end of his article. It's always a pleasure to see the door shut so firmly on nonsense.

Lessig takes, in my judgment, one small misstep: he makes the too-simple claim that it is broadband's nature as infrastructure that makes it an inappropriate place to rely on "markets." The market issue is more profoundly economic than that. Happily a writer on techdirt rises to the occasion:
That's rather simplified, but is mostly right. The issue isn't that it's infrastructure -- but that the infrastructure is a natural monopoly, where the effort to build more than one of the same style of infrastructure does more harm than good, and the value is only in having the same infrastructure reach far and wide (network effects).
That's just right...Markets are almost always the right solution for economic problems. But natural monopolies are the classic example of a situation where relying simply on markets is a recipe for disaster. It's not that "infrastructure" is a problem for competitive solutions, it is rather that we call some enterprises infrastructure and expect government construction or subsidy/regulation precisely because private providers can't economically provide a service which the community finds valuable because of its network effects. --The roads are a good example.

Thursday, January 19, 2006

"BellSouth bruised"

Ed Gubbins notices BellSouth's run of bad publicity. And it's all so charmingly self-made. Gubbins runs the whole list from non-existant growth policies to offending New Orleans and Lafayette, to becoming the poster boy for violating the principles of net neutrality.

If you want to catch up on how BellSouth has become the nation's corporate whipping boy the references are all here.

His conclusion: "If anyone is in need of an image makeover these days, it's BellSouth."

(Thanks to a reader for pointing to this one...)

Standing Up--Gene Flyte

Gene Flyte of Lafayette is angry at BellSouth...and wants to cut BellSouth out of any benefits of LUS' current fiber loops. I'm not sure that BellSouth makes much use of the fiber loop (though they would if they were half so smart as they think they are). It's certainly true that the days of "helping out" a "local" business by arranging backups and interconnects should be over with BellSouth who has conspicuously forfeited any right to be considered a good citizen of the community.

I've no doubt that BellSouth simply doesn't care about these matters but I do think they should know that resentful reactions like Gene's are common. Given the chance, the people of this community will be more than happy to leave BellSouth "out of the loop" whenever the opportunity offers. BellSouth should hope that its federal lobbying effort to exempt itself from the local franchise obligations that other video operators have always had will succeed. If it fails the people of Lafayette will be in no mood to cut BellSouth any kind of deal at all.

(A large part of the reason that BellSouth feels free to abuse local communities in ways that Cox hesitates to do is that Cox actually has to deal with local communities to be able to offer local service and BellSouth, exempted by federal law years ago, does not. Cox has been silent recently and, astute readers may have noticed that the council declined to bump up the 3% franchise fees it currently pays to anything like the 5% it could charge by federal statute. I suggest that Cox's silence and the council's forbearance are connected. And that BellSouth ought to have to deal with the same issues if they want to go into competition with Cox and LUS to offer video.)

Mr. Flyte also has a bone to pick with ULL for not stepping up to the plate on fiber. He's right. UL is a wonderful part of this community but they've given evidence, with the horse farm issue and with museum questions and, yes, with their inactivity on fiber, that they may have forgotten that that is true. I fear that the old boy network that Joey Durel attacked during last year's state of the city-parish address is at work here as they appear to be in the other situations that have embarrassed ULL recently. Old friends, old connections, past favors...they should go out the door when the good of the community is at stake.

Wednesday, January 18, 2006

Update: On the French FTTH rollout

TeleGeography Research has the most succinct summary of the newly announce French Telecom (FTT) FTTH plans:
Explaining the timing of the FTTH trial, FT said that while its existing copper-based DSL services were able to cope with existing demand for broadband access, in future fibre network alternatives would be needed to cope with increased access bandwidth requirements that will most likely render traditional technologies obsolete.
Om Malik, as always has an interesting analysis. A tidbit:
....this is an interesting development, given that France Telecom has always championed DSL. But now they feel that in the end fiber is better because the company wants to offer HDTV on multiple TVs, VoIP, online gaming and other services. ... it follows a similar path in Japan, where fiber is slowly spreading and gaining market share at DSL's expense. In the US, Verizon is using fiber to essentially replicate a cable TV infrastructure and layering some data on top of it. James Enck says German incumbent, Deutsche Telekom is planning to roll out a 50-city FTTC network as well. So far its been a DSL-driven broadband provider. I wonder if this could become an all familiar upgrade path: milk the copper as long as you can, and then switch to fiber?
Light Reading pushes a bit more information out there and calls on James Enck for an analysis of the competitive context wihin whch European fiber plans are placed. In part:

He notes that FT will be feeling the heat from Parisian FTTH startup CiteFibre , which is planning to provide triple play services across 100-Mbit/s connections, and from cable player Noos , which is conducting FTTH trials in the French capital.

Fiber is blooming across the world. Fast rollouts on this scale should produce whole new groups of proven and deployed (and hence inexpensive) hardware. It could work out well for Lafayette.

Coverage of Lafayette's decision not to Appeal

Overshadowed by the continuing fracas over naming a different street after Martin Luther King the media carry the story of Lafayette's decision not to proceed with an appeal of BellSouth's win at the appellate level.

I covered this pretty extensively last night after a visit to the council chamber. The Advocate and the Advertiser post stories that are nearly identical structurally but with a bit more in detail from the Advocate. The key issue that the Advocate gets that the Advertiser misses is cost: dropping the position LUS, the city, the lawmakers involved, and the PSC agreed was the right interpretation of the law will cost LUS and hence the ratepayers of Lafayette real money. (My response, as you might expect, highlights that hard consequence.)

KLFY also has an online short focusing on the issue. It repeats the incumbent talking point (attributing it clearly to the incumbents, I grant) that the "project stifles competition." I confess to grow weary with reporting that merely repeats the he said, she said list of statements from the two sides. Something so obviously false as the current near-monopoly owners objecting to a new competitor with the empty phrase that it would "stifle competition" really shouldn't pass muster with a reporter who is trying to inform the public.

Update: 1/18/06- 2:15: You can now get the original press release off LUS' site.

Tuesday, January 17, 2006

No Appeal: It's the jack, Jack

It's official, the city will not appeal the 3rd circuit ruling.

According to a press release at the city-parish council meeting LUS and the city have decided to bull ahead without further delay. The announcement says that the city-parish will seek a new ordinance that is in line with the 3rd circuit's interpretation of the Local Government (un)Fair Competition act.

On the balance I regret that...I don't like giving in to bullies and I think it will cost real jack to go along with what this set of bullies wants. But there is certainly a part of me that is jubilant: This insures the shortest possible wait for our fiber-optict system.

The city says:
After a careful review of all options , the City will accept the recent ruling of the 3rd Circuit Court of Appeal. the City believes tht to seeck review by the Louisana Supreme Court would likely delay the project for a longer time than if the bond ordinance were simply amended...
So delay is the reason given. Behind that is real doubt about when and even whether the State Supreme Court would take up the issue. As both a reporter or and a lawyer have troubled themselves to let me know the Supreme Court is under no obligation to take this bond question on an expedited basis. Apparently the found unconstitutional a law that would have required them to do so. So LUS could wait as much as a year to find out they weren't willing to hear the case at all. Court crowding, an endemic situation, has been made much worse by Katrina. I's still like to have seen an appeal--and don't see what's to stop BellSouth from threatening to appeal the next ordinance as well. But I have to say that the lack of an expidited process does make the decision not to appeal more understandable.

I've also had it suggested to me several times...and, oddly, only by lawyers, that trusting the courts of Louisiana where big corporate money is involved is not smart. I do feel obligated to report that one of the lawyers, while openly disdainful of the third circuit, thought the Supreme Court much more reliable. That concern no doubt played into a decision not to appeal as well.

While Delay and Distrust, and especially delay was influential I strongly suspect that another factor, while less visible, was equally important in producing the apparently odd decision not to appeal: Debt.

The press release alludes to this whe it says:
Over the past two years, telecommunications incumbent BellSouth has consistently blocked the fiber project through lawsuits, legislative action, and challenges to the Public Service Commission in an attempt to delay the timing of the bond funding that could drive the cost of the project up considerably...With the continued favorable intrest rate environment coupled with decreases in the price of fiber technology, our feasibility plan remains on target." claimed Lafayette Utilities System Terry Huval. (emphases mine)
A consistent theme of the Local Government Fair Competition Act is increasing the cost to the consumer of using LUS' services. The most efficient way to do this is to increas the debt load on LUS. And that is what the current lawsuit was aimed at. LUS and the city will accept conditions that will make the loans they take out more costly. During the time the city has been delayed by BellSouth and Cox the prime interest rate has risen from an historic low by more than 3 points; tax-exempt bond rates track prime rates for fundemental economic reasons. (Banks buy money from the treasury and resell it in the forms of loans to customers; the spread seems to have been from 3.5 pts to 5 points during the last decade.) Lafayette, as a direct consequence of incumbent obstructionism has missed the best bonding opportunity in more than a decade...bond prices are still good and, in fact, lower than the business plan anticipated but BellSouth and Cox's delaying tactics have cost each and every customer of LUS telecom money--just as the incumbents intended.

Now, more than ever we need to repeal the "Local Government (un)Fair Competition Act."

"City, county opposing Cox deregulation"

New Tricks: Cox asking FCC to "deregulate" in North Carolina. City and county claim that such deregulation will free Cox to charge poor and rural customers more than their neigbors have to pay says the man who oversees the cable company for the county:
Under deregulation, the company could charge "one neighborhood one price and another neighborhood another price," Lynch said. Poorer neighborhoods could see higher rates because homes there don't take advantage of Internet, digital cable and other services, he said.
Right now, of course, most city's contracts with cable companies require that they serve all and that they offer the same services at the same prices to all. That's the cable model in our country. And it's a LOCAL, not federal or state, requirement.

But BellSouth and the other Baby Bells (most noticeably Verizion and ATT in addition to BS) are lobbying the FCC (and statehouses) hard to escape the "cable model" and be allowed to use city property without having to agree to serve all in a community equally. This is mostly not about (as the Bells claim) the "onerous" task of negotiating with municipalities but about getting a competitive advantage over their chief potential competition: the cable companies. If the Bells are allowed to compete only for the most profitable neighborhoods while the cable companies are stuck with providing for all, it will add up to an enormous unfair advantage for the Bells. (Hmmn, the Bells seeking an unfair advantage, why does that seem familiar?)

This story suggests that the cable companies have begun thinking strategically--they can't dump infrastructure they've already built but they could demand that the feds allow them the same discriminatory "powers" they are poised to give the phone companies by exempting the cablecos as well as the telecos from local franchise agreements. That would neatly get them out of the Hobson's choice they correctly see the telecos as trying to force them to make: of either being forced to lower their prices to the point of nonprofitability across a whole community in order to compete in the most profitable segments (like our upscale River Ranch), or abandon the most profitable segments, allow the phone companies to beat them there and wait for the teleco's inexorable expansion into every profitable neighborhood.

That's the world we find ourselves in. It's another race to the bottom with consumers in general and the least wealthy of any community in particular taking the hit first and hardest.

Monday, January 16, 2006

BellSouth: 'We REALLY Don't Get This Internet Thing'

MarketWatch columnist Frank Barnako writes about BellSouth's continuing failure to comprehend what this Internet thing is all about. Although, there may be a subtle change in BellSouth's strategy emerging.

Barnako quotes BellSouth chief technology officer Bill Smith as saying the company has been talking to content providers who might have an interest in paying network providers like the phone and cable companies fees to ensure a better user experience. Here are relevant paragraphs:
"Higher usage for broadband services drives more costs that we have to recover," he said in a telephone interview.

He suggested that Apple Computer might be asked to pay a nickel or a dime to insure the complete and rapid transmission of a song via the Internet, which is being used for more and more content-intensive purposes. He cited Yahoo Inc.'s plans to stream reality TV shows as an example.

"It's the shipping business of the digital age," Smith said, arguing that consumers should welcome the pay-for-delivery concept.
Barnako mentions that Mark Cuban also backs the idea.

While having providers whose services rely on high-speed delivery of content pay some money to theoretically pay for the cost of network building might make some sense (depending on the amount charged and the impact that has on access to content on the part of consumers), this is a somewhat different tune from the ones that BellSouth and Verizon had been singing earlier.

In their earlier rendition of this song, the network owners (phone and cable companies) would have made deals with service providers that would have purchased their packets preferred treatment over those networks. That sort of walled-garden approach to Internet access (AOL on steroids as designed by a roomful of Bill Olivers) would fundamentally alter the Internet as we have come to know it.

Smith's comments indicate that the idea is still evolving. It's better than it was, but still problematic because of the way it would erect barriers to market entry for startups. For instance, how much more capital would, say, search engine startups have to raise in order to be afforded the same kind of access to customers that established companies like Google, Yahoo! and others would have bought for themselves?

The Internet has revolutionized business precisely because it lowered barriers to market entry. What the phone companies are proposing, even in this slightly revised version of 'pay to play', would blunt the innovation edge that the Internet has brought to business. It is a clear example of the interests of the phone and cable giants not matching up with the interests of other businesses and consumers.

The core issue here is that neither the phone nor the cable companies have enough money to build the networks that their customers want built. They've come to this realization only after shutting off competitive providers (that is, revenue sources) from their networks. Now that they have their networks all to themselves, they are back out looking for new revenue sources and have hit on the idea of making the content providers pay.

Brilliant! Except for the fact that in so doing, they propose turning the Internet into something resembling cable TV — 500 channels and nothing on! And, since the phone and cable companies fantasize about being content providers themselves, would that not put them in competition against they very content providers that they are looking to as, in effect, partners in these new network buildouts?

Ask the Competitive Local Exchange Carriers (CLECs) and independent Internet Service Providers (ISPs) about the track records of the phone and cable companies' ability to cooperate with their competitors! I'll save you the trouble: the phone and cable companies fought cooperation at every step until they finally drove all competitive content providers from their networks.

Another question that needs to be asked is this: What kind of say are the phone and cable companies willing to provide these content providers in the design and operation of these improved networks in exchange for their helping to fund those improvements?

Here, again, the record of the phone and cable companies to allow any outside input in the design and operation of their networks is relevant.

In the end, it's pretty certain that the phone and cable companies will view these content providers as they view their current customers: cash cows whose views are not relevant to the operation of their networks.

So, Mr. Smith tries to makes it sound all so reasonable. And it would be were it not for the fact that the history of his company and his industry so vividly written for all to see.

If you believe his pitch, I've got some rising Louisiana marsh land to sell you! ;-)

Black Ministry notices Bell Policy

Here's a piece I pulled up that seems appropriate for Martin Luther King Day: an editorial focusing on the discriminatory effects of recent decisions by the Bell companies. I've complained long and hard that the real value to the phone companies of eliminating the local franchise systems is to put the cable companies at a dramatic competitive disadvantage by letting the phone companies cream off the most lucrative customers.

What's relatively rare is to hear a black minister make the obvious points about the discriminatory effects of this policy so starkly. (There's a group in Chicago making the same complaint.)

Some of the good bits:

The giant telephone monopolies -- AT&T, Verizon, BellSouth and Qwest -- have launched an unprecedented push to effectively eliminate the only non-discrimination provision in federal law that prohibits redlining by any telecom company providing "video services." They ask legislators to bless a dubious business plan to bring their new TV services only to wealthy neighborhoods...

For the cable industry, that law has resulted in more than a $100 billion investment in new networks and today represents the closest thing we have to a universal broadband policy. Rural communities and inner cities are considered as important as the wealthy suburbs.

But the Bell telephone companies appear to have much meeker goals. With strange fervor, they are insisting that Congress and state legislatures exempt only the Bell telephone companies from the non-discrimination provisions...

As the late C. Delores Tucker, founder of the National Congress of Black Women, argued, it is the "(phone) monopolies that want to trample our civil rights traditions."

AT&T's proposal, for instance, is known as "Project Lightspeed." Months ago, its executives said that its bold new broadband service would be rolled out to 90 percent of its "high value" customers but only 5 percent of "low value" customers. Chaffing at what seemed to be an open admission of redlining, U.S. Rep. Ed Markey, whose subcommittee oversees telecom policy, accused the company of offering "Lightspeed for the well-off and 'snail-speed' for everyone else."

A point of clarification: This essay could lead the reader to think that what was happening is that a federal law was about to be overturned. But that is most emphatically not the case. What the Bells are angling for is new federal laws to be imposed that would forbid local governemnts from demanding that corporations who want to rent municipal property (rights of way, poles, etc.) treat all of their citizens equally.

That really ought to not be something that the feds are trying to prevent us from doing for ourselves. And thats' something we might feel a bit more acutely today.

"Hey, Baby Bells: Information Still Wants to Be Free"

Mike sends on a link to a nifty article in the New York Times: Hey, Baby Bells: Information Still Wants to Be Free. It's a good introduction to what's gone wrong with our telecommunications network from the standpoint of an informed Joe Consumer. Most folks who are up in arms (and up in arms we should be, let there be no doubt) about the current telecom betrayals in Washington or either tech geeks, or law geeks, or policy wonks. These guys are intense, driven, and cannot, for the life of them, see how anyone could not care as deeply about these matters as they do. (Yes, yes, I do count myself in that number. Apologies.) Of course, that's nuts. Telecom outrage is not a reasonable day-to-day angst for most folks. Like black coffee or bock beer; it's mostly an acquired taste.

What's nice about this article is how undriven it is, yet is still emphatic about what it is we should want and could have--if we'd all just wake up.

AT the top of my wish list for next year's Consumer Electronics Show is this: the introduction of broadband service across the country that is as up to date as that 103-inch flat-screen monitor just introduced by Panasonic. The digital lifestyle I see portrayed so alluringly in ads is not possible when the Internet plumbing in our homes is as pitiful as it is. The broadband carriers that we have today provide service that attains negative perfection: low speeds at high prices.

It gets worse. Now these same carriers - led by Verizon Communications and BellSouth - want to create entirely new categories of fees that risk destroying the anyone-can-publish culture of the Internet. And they are lobbying for legislative protection of their meddling with the Internet content that runs through their pipes. These are not good ideas.

That's about the shape of it. The guys that have put us in a pretty pickle are lobbying to make it worse--much worse. The internet is like the goose that laid the golden egg; it's a mysterious gift that's produced unanticipated wealth. That wealth seems to have sprung up mostly because anybody could trade anything with anybody --information and ideas not only want to be free; they only flourish when they are. The telecoms look at all this wealth (which they did nothing to create) flowing through pipes they own by a bit of peculiarly American history and seem to think that smothering the goose that laid the golden eggs is a good idea. It wasn't in the fairy tale and it won't be in our real world either.

The story goes on to document just how poorly we are doing vis-a-vis countries with an actual broadband policy. (100 megs for 25$? Japan. A Gig for 120? Sweden.) How much freedom to choose we've lost (Recall dialup ISPs, hundreds? Now our effective choices for the new broadband are 0, 1, and 2. Lafayette will join a vanishingly rare elite to have a paltry 3 choices.)

For the geekier among us this story reveals a new thing to worry about. Previously, we'd only had to worry that the providers (AOL, Google, Vonage, Netflix, etc.) would have to pay a surcharge they'd pass on to us to get decent service, and leave the public part of the net with only what's left over. We not have a bit more to worry about: exclusive provision. Where one company in each category is allowed to bid for not just decent service but the right to exclude its competitors. (This idea could only come from a monopoly like the Bells who gravitate to such things easily. Imagine: If you've got BellSouth you can only buy from NetFlix and get fast downloads. Or only search Google quickly, and Vonage? My guess is that they couldn't pay enough to make their service half so good as BellSouth's branded product. None of this is a joke, folks. It's happening now. And our good friend BellSouth is in the forefront:
In an interview, William L. Smith, the chief technology officer at BellSouth, described to me his company's trial offering in West Palm Beach, Fla., last year of a speedy download service for Movielink content. When asked whether BellSouth would offer its special service on an exclusive basis to a particular content site and agree to exclude the sponsor's rivals, he did not hesitate in treating the question as a matter of simply settling on the right price. The N.F.L. and Nascar strike exclusive distribution deals, he said. Why not network carriers?
Companies like Google and Yahoo and everyone from Adobe to Microsoft to Lawrence Lessing and Vince Cerf object. The battle is far from lost but winning will take an aroused public. And this article is a good one to think on and to share with friends.

Saturday, January 14, 2006

Disarm BellSouth!

Now here's a guest editorial I almost completely agree with (tongue firmly in cheek): Repeal act that gives BellSouth leverage to delay fiber plan. The author, John St. Julien, hits the nail on the head. I can do little better than to repeat it here. 500 some-odd words.
BellSouth has kept the people of Lafayette from building their own fiber-optic utility for long enough.

It's clear that the current providers, and especially BellSouth, haven't dealt fairly with our community. They've taken compromises we made to keep the project moving and used them to increase our costs and delay our project. We need to take away the weapon they're using. Demand repeal of the Local Government Fair Competition Act.

It's a matter of bad faith on the part of these companies, who can no longer be considered good citizens of our community. BellSouth and Cox refuse to build a fiber-optic system here, yet they're trying to block us from building one ourselves. They've used a string of ugly tactics: insulting push polls, a deceptive "academic conference," a threat to move the Cingular call center out of Lafayette and more.

The Local Government Fair Competition Act, which was sold to the city as a compromise that would allow our project to go forward with some restrictions, instead has been used to delay the project and raise the costs to citizens. To make matters worse, that law has crippled New Orleans' ability to use its own wireless network to aid her people following Katrina and it blocks other Louisiana communities from taking care of themselves as well.

BellSouth, and to a lesser extent recently Cox, tried to stop the project but failed in the legislature, in the city-parish council and - most importantly - before Lafayette's voters, 62 percent of whom approved the fiber project.

A company that respected our citizens would have stopped there and decided to compete rather than litigate. But BellSouth kept pushing, lobbying for more restrictions, losing before the Public Service Commission and losing several times in court. Most recently they won a verdict before the Court of Appeals.

This is not only a matter of allowing Lafayette to do as our citizens have voted to do; it's also a matter of hard cash. The act will artificially inflate LUS' prices by requiring LUS to set rates as if its costs were greater than they really are - pretending, for instance, to be renting its own property.

BellSouth's actions already have cost us more than $125,000 in legal fees. Rising bond rates make borrowing more expensive, and we're also losing the savings that competition would bring.

BellSouth's actions defy the spirit of the compromise that Lafayette made with BellSouth and others to put the act in place. BellSouth is using the act to defy our local vote. It hasn't served its purpose as compromise legislation that would allow a fair launch of a public utility. Instead, it's being used as a weapon to prevent us from building the system we voted on.

Lafayette's great advantage is that it's a real community where friends, relatives and colleagues discuss important issues. Plead our case. We've voted, and we shouldn't have to fight BellSouth to move forward.

Let's get rid of the Local Government Fair Competition Act.

Contact your legislators, or get more information at www.lafayettecomingtogether.org/repeal.htm.

(John St. Julien is a member of Lafayette Coming Together, "a volunteer corps motivated by the vision of creating a better Lafayette by joining together to pursue common goals.")


Thursday, January 12, 2006

"Officials seek options after fiber-optic loss"

The Advocate posts a catch-up article on the current state of the BellSouth lawsuit. The article has a good clean explanation of the basics and is well worth the read. The issue du jour is whether or not Lafayette will appeal the third circuit's ruling overturning an earlier finding that LUS and the city were pursuing a legal course in their plan to issue bonds to fund the project.

The two factors are time and money. (Sounds like daily life, no?) It's all complicated by a slowly rising bond market.

On the Lafayette side you have conflicting desires to keep the costs low and to get the thing built as quickly as possible. On the BellSouth side you have the perfect mirror: they want to jack up the price customers of LUS pay and delay the thing as long as possible.

BellSouth has few conflicts (if you can ignore the ones that have to do with the community and customers' interests as easily as they do) Any lawsuit will delay the project and if they work hard at suing about things that will raise the cost of the project they might get lucky and lessen their exposure to competition. They are further cheered by the fact that the bond market is slowly rising making LUS project slightly more expensive each day.

Lafayette, on the other hand, has real conflicts. Its promise to the people involves building both cheaply and quickly...and the two are not always clearly aligned. Fighting the lawsuit further offers a good probability of giving the city the best rates when the bonds are sold, important because interest is easily the single largest line item on the bill. On the other hand giving in holds the promise of going to bond sale more quickly--before costs rise too much more. The decision fork for the city has three tines: 1) give in and get the best rate you can under unfavorable bonding conditions quickly. 2) Appeal and hope for a decision that is in your favor and hope the bond market doesn't wipe out any gain over #1 that accrue because of delay and 3) Appeal and accept the possibility that the appeal will be upheld and you will both have to sell under unfavorable conditions and into a higher bond market.

It's unappealing. And if BellSouth were honoring its commitments made in legislative compromises it wouldn't be happening. The PSC, tasked with deciding what the law means, agreed with LUS to the point of joining its suit. The author of the bill, a BellSouth partisan thinks these issues were dealt with in conference. The first trial court didn't think that fulfilling a pledge to pay had anything to do with going into default. BellSouth drew a good hand; it happens. But the game should never have been in play. And wouldn't have been with an honorable company. The solution is repeal of the (un)Fair Competition Act: complete and utter. The state and an out of state corporation should not be standing in our way and BellSouth has demonstrated that it cannot be trusted honor a good-faith attempt at compromise.

For my part, I think the city ought to pursue appeal. It can be expedited and should be. The money is a tossup...trying to predict markets is a fools game. What's solid about this is that caving in at this point will make it appear to the unreflective as if you were trying to get away with something in the first place--and giving in to bullies is simply never a good tactic. They know in the future that all they have to do is spook you. We should simply admit that we are in a fight with an unscrupulous opponent and go after them. --In the legislature, in the courts, and in the court of public opinion.

"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.

Wednesday, January 11, 2006

Standing Up--Richard Warren

Take a look at Richard Warren's letter in the Advertiser this morning. In an open letter to Duane Ackerman and the BellSouth board, he criticizes BellSouth's disrespect in ignoring the July 16th vote. He's right.

Monday, January 09, 2006

"Coming Soon to TV Land: The Internet, Actually"

The New York Times has an interesting article online about the future of TV in the age of the internet. It is scattershot and all over the map but well worth the (free) registration hassle. The setup:
What would a world with television coming through the Internet be like?

Instead of tuning into programs preset and determined by the broadcast network or cable or satellite TV provider, viewers would be able to search the Internet and choose from hundreds of thousands of programs sent to them from high-speed connections.

In the battle for the living room, cable, satellite, and increasingly, phone companies are trying to defend their turf by offering more choice through an array of content in video-on-demand programs.

While it is all over the map and you would serve yourself well to just go and read it through, two things in the article were keepers for me. First was the forthright admission that all the dreams hinge on more adequate bandwidth.

Proponents stress that the open- video Internet is still in its infancy and the battle may not be completely joined until a new generation of faster Internet connections reach the home. This is because to stream digital video requires about 1.5 megabits of bandwidth to send conventional NTSC video and from 6 to 8 megabits to send high-definition video.

Currently broadband data rates in the United States reach just 1.5 megabits or less, but those speeds are beginning to rise after years of delay as D.S.L. and cable companies upgrade their plant and equipment with fiber optic lines.

The second insight concerns the question of whether any one provider can compete with the richness of the net. The author, notes the eagerness of the current providers of cable, satellite and to some extent phone companies, to hang onto their priviledged positions as providers of video, by mimicking web characteristics like download and freedom of selection by using "video on demand" and similar features--sometimes over IP. The issue, he cogently points out, is whether they can control enough content lock customers into their provision as they clearly hope to do. That hope may be futile; it seems that history is on the side of the net:

But fending off the Internet's openness will be a struggle, one that the online companies themselves lost years ago.

At the onset of the dot-com era, large online service companies like AOL, Compuserve and MSN tried to lock customers into electronic walled gardens of digital information.

But it quickly became apparent that no single company could compete with the vast variety of information and entertainment sources provided on the Web.

The same phenomenon may well overtake traditional TV providers. Potentially, IPTV could replace the 100- or 500-channel world of the cable and satellite companies with millions of hybrid combinations that increasingly blend video, text from the Web, and even video-game-style interactivity.

Two things would seem to make our current situation different from the old AOL/MSN/Compuserve days: video is harder to produce than html and AOL et al. never owned the connection into your home.

What made the web more powerful than AOL or MSN was that millions of individuals and institutions decided to put up html content for free use. They posted pages. It wasn't always apparent that they would. MSN wasn't crazy to think that if they could corral enough publishers, authors, and designers it could offer a viable alternative that it could milk for huge returns. It was only the stubborn creativity of masses of people at homes, small businesses, and local institutions that thwarted the walled garden vision. For internet TV (what I prefer to call DV, downloadable video) to match that something very similar will have to happen with video production.

I don't see why it can't. Institutions like our own Acadiana Open Channel (AOC) exist everywhere in this country...places where a person without cash or expertise can go and learn how to do video. Perhaps even more importantly, I am typing on a laptop that comes bundled with programs like garageband for sophisticated music makeup and imovie which allows movie creation on a scale that would have been called professional just a few years ago. Could I do Star Wars? No. Good Morning, America? Yes. Not with the elan of professionals but a basic talk show with video "intake" segments is well within reach of many, many americans.

The other issue standing in the way of DV dreams is that AOL and MSN didn't own the connection into your home. In their dialup heyday the phone company did and had no vested interest in keeping you the consumer corralled. They were happy to undercut the "networks" and become your ISP. As was cable. Had AOL or Compuserve actually owned that last mile and if the FCC of the day had been amenable to killing the common carriage rules the corporate dream of a balkanized "gardens" of proprietary content that could be milked for endless revenue even while serving only a fraction of the people a fraction of the content that the real internet has become might well have been realized.

We'd all be poorer for it. And we should all be worried that with the cablecos and the phone companies being allowed to wear away at the principle of net neutrality the burst of creativity that the real internet occasioned will not be repeated with video. And we'll all get IPTV from one of the big guys instead of DV from every creator with modem.

Interesting times.

Paris Gets It (two ways)

Dirk van der Woude, Amsterdam's broadband maven, working with CityNet, writes with the news that Paris has decided to go for the gold. Not to be outdone by either San Francisco's wireless or Amsterdam's fiber (a story I have shamefully neglected) Paris has decided that noththing less than both will properly prepare the queen city of Europe for the future.

This is a story with a nice, neat, story line behind it.

An earlier missive from Dirk pointed to a French law that "organizes loopholes" in French and European Union law to encourage municipalities to build fiber optic networlks. That's similar in effect to the FeinbergLautenberg-McCain bill proposed here in the United States which would clear away obstacles to municipal participation in telecommunications. And serves notice that it's not only the Asian countries (mentioned in Saturday's post) that have developed rational, pro-active, broadband policies.

Apparently Paris is going to take advantage of those loopholes. In a story Dirk sends (in Bablefish translation) we can see the basic outline:
Paris City Hall launches into the very high speeds
NOUVELOBS.COM 05.01.06

The mayor of Paris would like to favor the development of the services of free access to internet by launching the construction of a city wide telecommunications
network.

The City hall of Paris announced the launch during the year 2006 of a tender for the
construction of a telecommunications network with very high debit(output) in the
whole of the capital.

In a communiqué, the City hall clarified that it would be about a network in optical fibres, faster than networks at present available ADSL. Besides, the mayor of Paris, Bertrand Delanoë, " wishes to favor the development by the operators of the services of free access to internet (normal debit(output)) and in the local telephony, notably in favour of the most modest Parisians ", we can read in the communiqué.

(above is a machine translation of article in Nouvel Observateur of 5-1-2006)

More articles (in French):

Machine translation French => English at http://babelfish.altavista.com/
You can also take a look at the pdf formatted communicque/Press Release provided by and with a translation from Dirk.

My interpretation is that the city of Paris, the largest city in Europe, anticipates building a very high speed fiber-optic system and hanging a "normal speed" (?) wireless network off that. Perfect! The hidden limit of most wireless systems is anemic backhaul. A fiber network would fix that. The wireless network at "normal" speeds would be free. (That's where the specification of normal gets interesting.) But even more: it's including local telephony for free. Now there is a concept.

I've suggested in the past the quintuple play: Cable, voice, wireline internet, usable wireless data, & wireless voice. The last two are made possible by a wireless network hung off a fiber one. The ultimate technology play is the synergy between ultra highspeed wireline and high speed wireless that would make entirely new levels of applications concievable. Paris looks to be trying to make that play. Making wireless data free and voice communications between citizens free as well is certain to make nearly every Parisian a user. Some will see that as a huge "profit" opportunity forgone. But they are thinking like our incumbent monopolies. Paris is thinking like a utility: it exists chiefly to benefit its citizens, not distant owners. Since wireless is relatively cheap to add to a fiber build and, locally at least, the fiber network will give you more badwidth than you can use just give away the wireless. That insures deep, almost universal penetration, makes it certain that new wireless technologies get developed with a French (not Californian, cough, cough) flair and sets in train as wide and unpredictable an array of benefits as did the doctrine of universal service in American telephony. (A tradition the world envies and which we, ironically, are about to give up.) The network effects of having a whole city use wireless freely (in all senses) is impossible to calculate. But its benefits will surely be larger than the minor cost to the city of Paris if it is built as part of the fiber rollout. (I and others have estimated that cost at aproximately 5%.)

Mark my words; if this comes to fruition it will mark the new "must meet" standard for world cities and drive the rate at which technological change is translated into culutral commonplace harder and faster than we've ever seen. In ten years we may look back on it as a landmark day.

I'd love to see Lafayette follow suit. Or get out front.

Update 1-10-06 AM:
Light Reading has story on this: Paris Plans FTTH Network It focuses solely on the FTTH aspect but does include some interesting tidbits about equipment makers (Lafayette buyers looking for equipment made cheaper by mass deployment take note) and the following quote:
Heavy Reading Senior Analyst Graham Finnie, who follows European broadband developments, says the news is of major significance. "This would be a much larger project than Amsterdam, potentially involving millions of homes," he says. "This news, on top of the Dutch project, should make every large city in Europe look at the potential of a municipal network, and consider whether they should be doing something similar..

"The companies that need to take the most notice are Europe's incumbent national operators. This should spur them on to look again at whether they need to revisit the whole fiber-to-the-home area," that many have deemed too costly to develop.

Translation from guarded business-speak to everyday language: These two FTTH projects demonstrate that in Europe, as in the US, patience with the incumbent providers has run out. If they want a role in the future they will have start rolling out FTTH or watch Europes largest cities--and most lucrative markets--go muni.

Sunday, January 08, 2006

"Bogged in the Bayou"

Broadband Reports has one of its shorts on the BellSouth appeal. As usual, what's interesting is the comments. Two things struck me: the overwhelmingly pro-Lafayette sentiment and how closely some people from places like Oregon or Illinois are following our fight. They know a lot about what's going on here. There are also a couple of Lafayette locals on the board...that's fun.

Saturday, January 07, 2006

Broadband and Federal Policy

From the Washington Monthly,

Well said:
"The countries surpassing the United States in broadband deployment did so by using a combination of public entities and private firms. The Japanese built their world-class system by ensuring “open access” to residential telephone lines, meaning competitors paid the same wholesale price to use the wires. The country is also establishing a super-fast, nationwide fiber system via a combination of tax breaks, debt guarantees and subsidies. But of particular note, the Japanese government also encouraged municipalities to build their own networks, especially in rural areas. Towns and villages willing to set up their own ultra-high-speed fiber networks received government subsidies covering approximately one-third of their costs.
Unfortunately, the United States has pursued the opposite policy. President Bush has called for “universal, affordable access for broadband technology by the year 2007,” and FCC Chairman Kevin Martin claims broadband deployment is his “highest priority.” But they have made no progress toward these goals; in fact, they have rewarded their corporate cronies for maintaining high prices, low speeds and lackluster innovation. Federal policies have not merely failed to correct our broadband problems, they have made them worse. Instead of encouraging competition, the FCC has allowed DSL providers and cable companies to shut out competitors by denying access to their lines. And whereas the Japanese government encourages individual towns to set up their own “Community Internet,” Washington has done nothing. Fourteen states in the United States now have laws on the books restricting cities and towns from building their own high-speed Internet networks. No wonder America is falling behind its Asian competitors."
Having set the stage the article goes on to call on my favorite evidence for the value of municipal broadband: the history of municipal electricity, and then finishes with a scathing review of the hypocrisy of the incumbent providers.

Well worth the read. Go get it.

FCC knocks telcos' secret plan to divide and bill the web

The Register covers the new FCC chairman's opposition to the Telco's plans to create a two-tiered internet--one for customers of customers who pay them off and one for customers of people that don't. The story has a special call-out for our friend BellSouth.

BellSouth is already negotiating with one movie download provider to take a cut of the $2 to $5 fee for each film delivered, according to the paper. By paying the fee, the unnamed movie delivery company would be able to guarantee the fastest possible downloads to consumers.

It's not a pretty scenario.

As the paper notes, the telecommunications companies have traditionally used a "best efforts" policy to move internet traffic as quickly as they can regardless of the type of data. Now, however, as increased broadband usage has made movie, music and other content services more feasible, the telcos want to cash in on the shift.

I've gone over this general topic thoroughly before so here's a (relatively) brief synopsis of how you'll experience what's called the net neutrality issue:

Companies who pay the incumbent providers (like BellSouth) for priority bandwidth get guaranteed bandwidth and everything else on the web gets what's left over. You already experience variable speeds as the service load varies. But right now, you are paying for and largely getting "best effort" -- nobody is prioritizing someone else's download and leaving you with what is left over. The current situation is uneven and irritating. But it is "fair." The corporations are acting in good faith. But BellSouth, as we've seen locally, isn't big on "fair." They and the other phone companies are fighting drop the "best effort" promise. If they succeed the slowdown you experience in the first days won't be terrible because it will be hard to notice the degradation in the connection you bought. But that won't last. As the pipe fills it will be more and more necessary for other providers to also pay off the owners of the last mile connection in order to give their customers a half-decent experience. As more and more companies give in the guaranteed pipe will eat up more and more of the available bandwidth will be taken up to meet the guarantee. Eventually there will be so little left over that the providers of voice or movies or google's search engine, (all mentioned by BellSouth as targets) and so on will have to pay or your download of their material will be too slow to wait for.

Who loses? The consumer and every small and startup company around. Who comes out even? The big providers who can afford to buy a cozy relationship with the Bells by passing on the cost to you. Who wins? Only the Bells. Do they keep every penny they charge you for your connection as they squeeze your suppliers and raise the costs of providing you the customer with services. Of course they do.

The best solution for the nation would be for the FCC to disallow such a radical and unfair change in the basic nature of the internet. --A principle called common carriage is fundamental to the way the net has always worked. Common carriage forbids discriminating against particular users or providers. I wish I was as confident as the Register that this is what Martin wants to affirm. As I read it he is only very carefully saying that he is against "blocking" sites--locking you and I out of sites belonging to voice competitors for instance. He hasn't said he is against prioritizing favored services. And that is what BellSouth and the other telcos are asking for.

The other, local, solution is to own the last mile pipes yourself so that no one can mess with you in this way. That's what we're trying to do here in Lafayette. The old-fashioned word is "independence."