Sunday, July 30, 2006

Open Source & Making a New World

I've made a small habit out providing something thought-provoking for folks Sunday reflections.

The object-to-puzzle-over today is Doc Searls' latest bit on "Making a New World." It's a ramble, and if you're not familiar with the conversation its pretty hard to follow. It certainly doesn't make much in the way of concessions to eye candy--it's all text and links.

There are nifty parts; nuggets in them thar hills. For example:
  1. Nobody owns,
  2. Everybody can use, and
  3. Anybody can improve.
These are the principles behind the new network infrastructure. 1 & 2 are the principles behind all infrastructure. But #3 is something new under the sun; and it bears thinking about.

Another Example:

The case of Internet radio is instructive. The DMCA defined broadcasting on the Net as "performance", and digital copies as "perfect", regardless of their fidelity. It required "webcasters" to negotiate royalties with the recording industry, through a Copyright Arbitration Royalty Panel administered by the U.S. Copyright Office. Led by the Recording Industry Association of America (RIAA), the CARP instituted royalty requirements so labyrinthine, difficult and costly to webcasters that it effectively prevented the industry it purported to regulate. Had it been imposed on over-the-air broadcasting at the dawn of that industry, it would have strangled that baby in the cradle too.

One unintended consequence is podcasting. ...
Ok. Wow. Hadn't thought that through but he's probably right. Or at least podcasting has had a special day in the sun because of the absence of the equivalent of standard radio on the internet medium.

The nuggets are there. As a reader, you'll have to mine them. Working that vein is more effort than most writting; that I'll cheerfully admit.

But Searls is one of the grand old men of the internet and he's well worth being patient with. --He's currently the senior editor of the Linux Journal, was an author of the Cluetrain Manifesto, and is a major figure in the open source movement. If that doesn't mean much to you, don't worry--let's just say he's a "seminal thinker" whose influenced a lot of influential people and let it go at that.

He's pulling together a buncha strands in a not very explicit way. But at least one thing that is bubbling up in the stew is that there's a new world making out there and we're having a hard time making sense of that fact. He wants to help us out a bit in understanding what's going on but, since he mostly lives in that other world, he has a hard time communicating.

For his money Linux, open source, new business models...and more...are really symptoms and harbingers of that change. They share a particular way of understanding the world that might be called a "network logic" that recognizes how the building blocks of new has be open and in the public domain in order to become ubiquitous enough to really become a new infrastructure. Once that infrastructure is in place we can make value on top of it, because of it. But it won't work to profit off it directly by closing it up and making it proprietary.

The essay repays some slow reading and patient thought. When your grandkids want to know if it's really true that at one time people had to personally own(!) things like operating systems, digital storage, and applications in order to use them you'll want to be able to talk to them about how that once seemed sane, sensible, and indeed the only way to do things. This essay is a good start on understanding how and why that familiar, commonsensical model is falling apart and why much that is proprietary today has begun to shift solidly toward an open, free, infrastructure model.

Heads Up—Fiber Bond Appeal

The Advertiser issues a heads up on the Naquin-Eastin fiber appeal. Here's the gist of the story:
The only pending legal action that could halt the proposed Lafayette Utilities System fiber-to-the-home project will be heard Thursday.

The Third Circuit Court of Appeal is expected to hear an appeal filed by Lafayette residents Elizabeth Naquin and Matthew Eastin at 9:30 a.m. Thursday at 1000 Main St. in Lake Charles.

Eyes on the prize folks. This part of the delaying game is near an end.

Saturday, July 29, 2006

Conditions for AT&T/BS merger?

AT&T is set on acquiring BellSouth. Whitacre, AT&T's CEO, wants to rebuild the old AT&T monolith? And the FCC doesn't appear to have the will to block it? Well at least require the public service that goes with granting a class of monopoly.

That's the peevish suggestion of Dave Burstein of DSL prime.

Burnstein's point is that the public ought to get something out of allowing this enormous reconcentration of economic power. He thinks it should be DSL-like bandwidth at affordable, DSL-like prices. Burnstein points out that the Goliath could, at reasonable cost relative to its size, provide 90 percent of it's footprint with DSL or WiMax-at-DSL speeds and a satellite service to the rest. As he points out, this would only be making Whitacre make good on an old promise:
In 1999, Ed Whitacre promised 80 percent coverage with Project Pronto in 2002, and "all our customers" in the next few years after that, using whatever technology proved most effective. Instead, SBC stopped below 76 percent and refused to even reveal the number. If Kevin Martin has the backbone, 100 percent availability will be part of the coming AT&T/BellSouth merger. AT&T would huff and puff, but Martin faced them down before on UNE-P.
Serving us all with at least moderate bandwidth is not all so unlikely as it might appear at first blush, though Burnstein doesn't explain why: Doing so would be "merely" requiring universal coverage of a set of services that AT&T and BellSouth are already starting to deploy for their second and third tier markets--the ones, the size Lafayette and below, that won't get fiber. They'd be profitable businesses--just not as profitable as other ways the new giant might spend its money. (Yes, yes, I know--BellSouth won't be able to to compete in this market with merely DSL speeds. LUS changes the competitive situation in Lafayete. Both incumbents will have to expend more effort-and more bandwidth--if they intend to stay in this market.)

Beyond those questions, however, Bernstein claims there is a real issue anti-trust issue before the FCC and that affordable, universal, bandwidth in the 20 meg range is the remedy. He believes that when AT&T launches its "Uverse" video over IP service it will be deliberately preventing competitors from entering the market by refusing to sell customers enough bandwidth to allow them to purchase competing with video products. The idea is that the FCC can avoid a crisis
...this fall, when AT&T turns on their HD service and creates a prima facie antitrust violation. AT&T is blocking customers from all but six Mbps of the 20 to 25 Mbps Lightspeed connections. They refuse to sell higher speeds at reasonable or even unreasonable prices.
So his take on the issue of net neutrality focuses less on the threat of tiering and packet prioritization and more on the raw economic power that control of the last mile's bandwidth gives the incumbents in the emerging video over Internet Protocol market.
Not merely did Ed Whitacre and Randall Stephenson say they want a tollbooth, they are already telling reporters they will limit speeds with the result that live HD video can't challenge Lightspeed.
It's not just that AT&T/BS wants to put a toll road on the faster, more useable lanes of the internet highway. More crucially they also want to be the only trucking company with a useable off-ramp to your home.

Put that way, the antitrust charge makes a good bit of sense. And one remedy--the least intrusive remedy--would be to mandate that they sell you enough bandwidth to allow you to purchase competing products from some one else.

Wednesday, July 26, 2006

"US Drops to 20th in Broadband Penetration"


The US has dropped to 20th, down from 17th, in percentage of households served by broadband connections and is poised to drop off the chart. As abysmal as that ranking is, it actually understates the problem since "broadband" is loosely defined as anything faster than a 56k modem. US systems are relatively slow compared to our competitors on the world stage. South Korean and Japanese systems, for example, deliver significantly faster speed for fraction of our cost.

It's getting progressively harder to paint our cable and phone incumbents as anything other than incompetent. They've squandered a huge lead in infrastructure in the worlds wealthiest country.

(From Website Optimization via a link from Searls blog)

WBS: The Doc Searls Weblog

What's Being Said Dept.

It's nice to be noticed--and extremely gratifying to be noticed by someone who "gets" what you're trying to do. Doc Searls is one of the "silverbacks" of the web: a veteran who regularly gets quoted with respect. So I was gratified to run across the following citation. Searls is discussing his take on net neutrality and opining that the broad range of more traditional economic and political power wielded by the incumbents are of greater concern than the topical net neutrality debate. (I'd tend to agree, with the caveat that the net neutrality debate is fueled by concern over one, if only one, form of economic power.) The quote:
The far greater danger is the carriers lobbying and litigating to death both backbone carriers and local competitors. The former are businesses that merely transport bits (the ultimate commodity business, and by far the most "neutral" out there) The latter include local and regional wifi and fiber deployment efforts. Some are initiated by local governments. Some are not. All are citizen workarounds of unhelpful cable and telco duopolies. The carriers literally want these efforts to be made illegal. To them only phone and cable companies should be allowed to carry the Net.

Or so it seems to me, after reading up on what's happening behind the scenes, mostly at the state level. It's not pretty. For a peek, check this and other pieces at the Lafayette pro fiber blog. These are not liberal wackos. They're local citizens fighting to get what they want, with or without help from the local telco/cableco duopoly.
I think this is exactly right and the approach is what has motivated Lafayette Pro Fiber. Absent a national policy that really encourages broadband -- replete with peering agreements that don't favor the giants and support for local communities to get into broadband on their own--the real fight is in the last mile where monopoly or duopoly control by the incumbents gives them the power they need to push stuff like packet prioritization as a business strategy. As things stand that last mile fight is necessarily local. Wresting that control away from the carriers gives local communities a fighting chance and having uncontrolled centers like Lafayette will serve to keep the incumbents honest, much as the Tenessse Valley Authority's publicly produced electricity at good rates kept the energy companies honest in our grandparents time when the last big network was being built.


On the other hand...

....Of course, things balance out. For every bright spot like Searls's comment there's got to be a dark cloud to balance things out. The infamous Stephen Titch disapprovingly links to Lafayette Pro Fiber. (You recall him--he's the fella who scammed the Advertiser, twice, no thrice, with his bought and paid "advertorials" and his "research" and issued under the color of the Heartless Institute during the fiber fight.) Titch objects to the recent Advertiser editorial and posts in LPF that point out that the will of the people is being stymied by incumbents afraid of a little competition. The post is a little lesson in how such folks reason: After some trite nonsense about legal rights (yes--and so?) he slides into a bit of (deliberate?) confusion that blurs the the difference between law, his ideology, and economics. The most transparent part of it is his attempt to play games with the definition of monopoly. Titch tries mightily to transform a straightforward economic definition into one that is somehow dependent on whether stockholders and potential stockholders approve of current management. Shareholder happiness has nothing to do with monopoly status as the lack of regard for railroads--as obvious a monopoly as we are likely to see--demonstrates. Monopolies, free of market discipline, are often abysmally run and shareholder dissatisfaction has been common.

But aside from the dubious reasoning it's more than a little repulsive to read a piece which celebrates and justifies the frustration of an overwhelming community vote and righteously announces that we'd be better off if we'd just stop with the six million in interest rates increases the that the incumbents have forced on us recently. Stunningly arrogant. If you ever wondered if these guys might have your interest at heart stuff like this should dissuade you. Welcome to the new corporate conservatism. It doesn't much resemble your daddy's conservativism.

Sunday, July 23, 2006

Chicken or Egg? Sunday Thought Piece

A light, but thought-provoking, piece came across my virtual desk this week. The story, entitled "Broadband Users Are Eager for New Applications," doesn't really demonstrate any such thing but the subhead is more interesting and more accurately reflective of the article:
"Which comes first, high-bandwidth pipes or high-bandwidth apps? Or is each side waiting for the other to move?"
It's a classic: "Which comes first? The chicken or the egg?" Such conundrums usually reveal nothing more than a bad question. But this time there really might be an answer and the answer is: high-bandwidth pipes. Nobody will develop anything to be used over an infrastructure that's not yet there. We can barely imagine what we could do with a gig to the home, an infinitely malleable digital framework, and easy interactions between media modalities. Hell, it's even hard to talk about without using obscure jargon.

But I am sure of one thing: that all that big capacity will be filled--that's what always happens.

The article goes on to note that a critical mass of “fiber-connected communities” with huge pipes is coming together and a graphic from the story make shows the typical take-off curve has taken shape.
Today about 1,000 geographically dispersed “fiber-connected communities” exist in the United States. Connecting these communities with each other, either through the public Internet or perhaps through a secondary, higher-capacity network, would create a large mass of potential customers with very-high-bandwidth capacity. This group might well be the critical mass needed to unleash a flood of new applications designed for high-speed networks.
Interesting? Lafayette has the resources to be at the front of that flood. It will be one of the largest fiber networks, probably the largest, in the United States. It has a university, some good tech credentials and possible seed beds like AOC. It could be a very interesting ride.

Friday, July 21, 2006

Update on Naquin-Eastin Drop Dead Date

Word is that oral arguments in the Naquin-Eastin case (the appeal that is being used to block the bond issue) have been set for August 3. The panel chosen to hear the ruling will be Judges Sullivan, Ezell, and Saunders.

Presuming they get done that day we'll se a ruling on August 10th. That's four days earlier than we'd been anticipating...the city must be eager.

A lot of us are eager to get on with it.

Thursday, July 20, 2006

"LUS bond issue back in court"

In the latest of a series of well-researched articles on fiber to the home issues Kevin Blanchard lays out the argument made by the Eastin-Naquin lawyers in the bond issue case before Louisiana's third circuit court of appeal.

But he neglects to lay out the city's winning case that the opponents of Lafayette's fiber to the home project are attempting to overcome--this is, after all, an appeal.

Among other points, Blanchard repeats the claim made by the Plaquimines lawyers that LUS can't take out loans from local government. But he fails to note that the law explicitly allows loans and lays out the conditions under which they must be made--including a provision, for instance, that such in-house loans should be made at "market rate." Even the legislature clearly realized that a project of that loans would occasionally be necessary and provided for them. The idea that internal loans are somehow prohibited it is a stretch that (doesn't really) justify another level of delay. BellSouth and Cox know quite well the intent of the law.

Of course, if the law were better drafted this sort of nonsense wouldn't be possible. Chalk up yet another reason to repeal the Local Government (un)Fair Competition Act.

Advertiser editorializes on Eastin and Naquin

Today's Advertiser editorial is dedicated to the Naquin-Eastin question. With the recent one-year anniversary of the fiber to the home vote and with the bond issue appeal due to be finally decided by the middle of August feelings are running high in the city about the delaying lawsuit.

The Advertiser editorial staff raises good questions--they ask about the unusual secrecy of the pair, the long parade of lawsuits, their apparent willingness to do the work of the incumbents, the possibility that Naquin and Eastin are pursuing this for personal profit.

Though many points will be familiar to regular readers here, the essay is well worth reading. Some teaser quotes:

There is one question that we would like for Naquin and Easton to honestly honor. It is an important one.

Does the ongoing legal opposition to the LUS program reflect solely your own views?

LUS Director Terry Huval already has begun asking a question that is becoming common in the community: "Nobody knows anything about these folks. Who's putting these people up to this?..."

Until there is open dialogue, the tendency of the public will be to suspect that Naquin and Eastin are acting for others, possibly for personal gain.

And finally:

Besides delaying a project approved by the people and the courts, the ongoing litigation has cost the taxpayers of Lafayette a substantial amount of money. The public deserves to know why.

Indeed.


Veto Override fails

Reperesentative Montgomery has abandoned his attempt to bring the legislature back into session to override Blanco's recent vetoes. This morning's Advertiser story on this issue makes it clear that the Montgomery's purpose was to resuscitate HB 699, BellSouth's state-wide video franchise bill.

Earlier stories on the attempt to bring the legislature back into session have been vague as to why the attempt was being made. If you didn't understand clearly that Montgomery sponsored BellSouth's bill it was hard to understand why he was pursuing a veto session.

Montgomery quit because he no longer has the votes:

[Montgomery] had commitments from enough legislators in the House to hold a veto override session, but, if such a session was held, he was uncertain he could obtain the necessary two-thirds vote to override the veto.
That's telling--apparently once those legislators got back home and talked to local mayors and police jurors they got an earful. Support for HB 699 has understandably waned. If the mayor of the biggest towns in your district start bad-mouthing the job you're doing up in Baton Rouge, you're in trouble.

Likely that is not all that is going on. Blanco vetoed a lot of pork projects across the state and every legislator who had their particular ox gored would have loved another bite of the apple. But the legislators know the score even if earlier reporters on the potential veto session did not. They'd already watched Montgomery push BellSouth's bill through during the regular session and knew that he thought a veto session should benefit HB 699. But they wanted their own pork bills too. It's not hard to imagine that they said so plainly and demanded a clear price for their votes: passage of their vetoed bills. It's not that this sort of thing doesn't take place all the time. But this time, with only BellSouth's bill driving the dealing it would have been crystal clear that votes were being traded. With local government finally rallied to the cause you can bet that a lot of politically savvy local people would be watching the sausage being made. Media coverage of the veto session, unlike the regular session's focus on hurricane recovery issues, would be focused on what is, in the end, a bill to strip local governments of control of the public's rights of way in in order to profit BellSouth. Faced with the prospect of a messy session and visibly fading support Montgomery, wisely, bailed.

Montgomery tries to put a good face on it all:

[Blanco] "has asked them to work together to see if they can come to some agreement," Montgomery said. "We're going to give that a shot up until the next session."
But, bravado aside, the next session is a fiscal session--unless BellSouth has some very creative way to make this into a tax or expenditure bill it won't be considered in the 2007 regular session. (Proponents of Lafayette's fiber to the home project should not that this will give the city a year's respite from the worst of the battles in the state legislature.)

HB 699 is dead.


Update: The Advocate also has a short story today on Montgomery's attempt to bring the legislture back in session and his decision to abandon the effort. It contains some interesting tidbits about the process that brings a veto session into being and centers attention on Montgomery's claim that Cox's recent rate increase motivated his attempts. I'll say it again, attempts to construct this bill as a battleground between Cox & the cable companies and BellSouth/AT&T are symptomatic of lazy reporting. BellSouth promoted the idea that a vote for HB 699 was a vote against high cable prices because it was a much easier sell than saying honestly that they only want to serve the most profitable segments of every town and new ritzy suburbs and local government was refusing to rent them land for that purpose. The media (and the legislature) bought BellSouth's line because it fits in with everyone's prejudices so nicely. But the real opponents are BellSouth and local governments with Cox a sometimes, tepid, ally of first one side and then the other depending on whether it is trying to secure its short-term or long-term interests at the moment. The history of this bill makes it clear: It's local government vs. BellSouth.

Wednesday, July 19, 2006

"Another appeal filed on fiber plan"

The Advertiser has its story on the Naquin-Eastin lawsuit, confirming the filing of an appeal that the Advocate reported yesterday after talking to one of the Plaquemines lawyers.

Lafayette Parish Clerk of Court Louis Perret said his office mailed the Naquin/Eastin brief to the Third Circuit Court of Appeal on Friday, meeting the legal deadline.

Third Circuit Clerk Kelly McNeely said his office received the brief Tuesday.

The reporter talks to the Third Circuit and they have received the appeal. So, as suspected we're in for one last round on the bond issue.

August 14th is the last day for a decision folks; mark the date.

Snake Oil on Eastin and Naquin

The Independent's satirical cartoon "Snake Oil" targets Bellsouth, Naquin and Eastin.

Take a gander.

Tuesday, July 18, 2006

Appeal Filed in Bond Suit

Kevin Blanchard at the Advocate reports, after talking to one of the lawyers, that an appeal has been filed by the Plaquimine lawyers in the local case that has generated a lot of frustrated heat among supporters of Lafayette:
Two Lafayette residents, Matthew Eastin and Elizabeth Naquin, are seeking to block LUS’ funding of a proposed phone, cable and high-speed Internet business.
As has been the case in each of the myriad lawsuits and appeals in these cases against the city the plaintiffs have waited till absolutely the last moment to file an appeal. (The current crop have four cases running at once.) The idea is to delay a decision for as long as possible. Considering that the city has won the large majority of the decisions in this rearguard battle being engaged by the incumbents (losing only twice and deciding to plow ahead rather than appeal both times) this tactic makes sense. They're not going to win on the merits. But this delaying tactic is not something that can go on forever. Naquin and Eastin's bit of obstructionism barely squeaked in under the legal deadline in its attempt to entangle the bond issue with a vague charge that LUS overcharged on electricity prices at some point in the past. No further attempts to delay the project by frustrating the sale of bonds legally will be possible.

LUS has two weeks to respond to Naquin and Eastin’s appeal. The 3rd Circuit has to hear the appeal no more than a week after LUS responds, then decide within a week.

If all the deadlines are met on the last day, a decision would be reached by Aug. 14.
This thing is coming to an end. And we will have the system the people voted for a year ago.

The sad thing is that Naquin and Eastin's decision to let themselves be used by the incumbents for their purposes has cost the community millions of dollars in interest rates. That cost will be borne over many years -- in small increments but in real ones. You know, there are currently little "fees" on your phone and cable bill designed to remind you that part of the cost of doing business for Cox and BellSouth is to pay taxes. Do you suppose that we could each month label a part of the bill the "BS/Cox/Naquin/Eastin fee" for the money these delays have cost us all? It's not something we should forget.

Sunday, July 16, 2006

"Year after vote, fiber project still stalled"

The Advertiser runs a story on the first anniversary of the fiber referendum that explores the tactics that have been used to delay the project. The most recent is the Eastin-Naquin suit.

Lawsuits challenging a fiber bond ordinance approved by the Lafayette City-Parish Council must be settled before LUS can issue up to $125 million in bonds to pay for the project, Huval said...

"Conceivably, had we not had any interruption with lawsuits, we would have issued bonds and would be well under way with design and construction of the early parts of the fiber system," said LUS Director Terry Huval.

Actually, if the incumbents had stood out of the way from the begining and decided that they'd compete instead of trying to change the rules to their advantage at every turn we'd already be using the fiber optic system LUS had planned.

The story goes over some of the obstuctionist tactics used by the incumbents --skipping over some highlights like the battle at the PSC or the ugly case of Sharon Broome's bill to fine the city in the 2005 legislature. It focuses on the most recent set of legal challenges including some interesting particulars on the current class action lawsuit:

Only one of those legal challenges can stop LUS from issuing the fiber bonds, said City-Parish Attorney Pat Ottinger. It is an appeal to the Third Circuit Court of Appeal by Naquin and Eastin challenging the bond ordinance, he said.

Attorneys for Naquin and Eastin filed an intent to appeal. The deadline to file the full appeal and brief with the Third Circuit was Friday, Ottinger said. By early afternoon, the plaintiffs had not filed the appeal, he said.

It sure would be nice if they hadn't filled an appeal, but these lawsuits can apparently be filed by fax until midnight on the due date. So no one will know whether LUS is freed up until Monday morning when the employees return to work. I wouldn't advise you to get your hopes up.

Who Done It? On Elizabeth Naquin and Matthew Eastin

In one of two related stories, The Advertiser this morning asks, but doesn't answer, the question that comes up first when people in Lafayette discuss the fiber issue: who are Naquin and Eastin. We've discussed on these pages (Elizabeth Naquin and Matthew Eastin--Why?) how hard it is to come up with any explanation that leaves them in an honorable light.

This morning's story asks questions I've been hearing around town and puts them into the mouths of the city's leaders:
"It's strange that you have a lawsuit holding up the city and nobody's ever seen the plaintiffs," Huval said. "Nobody knows anything about these folks. Who's putting these people up to this?"

...
Durel on Friday wondered what is the motivation and the incentive for Naquin and Eastin since their lawsuit claiming LUS is overcharging customers cannot reap them a refund. There is no monetary award if they were to win, he said.

"An out-of-town attorney that's got two people who, as far as I know, don't exist. There's somebody and some organization behind this," Durel said. "One day the truth will come out that these people are pawns."

"....What's really frustrating is this could bring tremendous benefits to the city, and just a couple of people apparently are trying to block this," said Lafayette resident Mike Stagg. "This is obstructionism in the worst sense."

He said one day he hopes Naquin and Eastin "have the courage to come forward and apologize for the cost they've inflicted on us all."

It's not just people who were directly involved in the fight for fiber here that are frustrated. People want to know what is going on--who contacted these two very obscure people who were otherwise uninvolved in this (or any other) political fight and recruited them to the role of class-action plaintiffs? Why did they agree? What do they hope to gain?

While this article reveals more about the principals in this suit than any previous story it is also clear that the reporter didn't go beyond the most easily available public records--all that was necessary to establish the basic points of the story that Eastin and Naquin had not had a previous record of public involvement with fiber or much of any other cause but were real people who actually lived in Lafayette.

Should reporters decide to go into full "investigative" mode on this we'd all get a lot more information. Let's hope they do.

Friday, July 14, 2006

Tracking the AT&T-BellSouth deal

According to recent reports, reviewed in the Chicago Tribune, The AT&T/BellSouth merger might not go as smoothly as planned.
Judicial review of the takeover of AT&T Corp. last year by SBC Communications Inc. and Verizon Communications Inc.'s acquisition of MCI Corp. has raised questions about whether the Justice Department and the Federal Communications Commission acted in the public interest by approving the two mergers.

U.S. District Judge Emmet Sullivan said he might need more evidence before signing off on the consent decrees that approved last year's mergers.

While few expect Sullivan might try to unwind the mergers, they said his review has already embarrassed the department and the FCC, which will likely cause both agencies to provide greater scrutiny to the proposed AT&T-BellSouth deal.

"The FCC and DOJ are on notice there'll be more public scrutiny of how they handle BellSouth," said Daniel Berninger, an analyst with Tier1 Research.
The share prices of both AT&T and BellSouth have dropped.

What does all this mean for Lafayette? It's hard to say. But the idea that the merger is not an absolutely done deal is pretty new.


PSC: BellSouth Enhances Competition

This is a companion piece for the posting a bit earlier on US Senator Stevens, the man who chairs the committee responsible regulating on the internet.

Here we draw attention to Jimmy Field's understanding of competition. Feld is the man who chairs the Louisiana Public Service Commission; the body responsible for protecting Louisiana consumers.

The PSC was asked to rule on whether allowing AT&T to buy up BellSouth would be good for the public or not. By a vote of 4 to 1 the PSC decided that it would be good for consumers. Here is the way Feld justified that vote; in it he demonstrates his profound understanding of how massive consolidation can lead to increased competition:
Commissioner Jimmy Field of Baton Rouge, who chairs the five-member panel, said competition in cities that have operated under merged companies offer more and cheaper services to consumers.

“This is one way to encourage competition and that outweighs the negatives,” Field said."
Uh....

(From the Advocate)

Thursday, July 13, 2006

"Perhaps a little fiber....optic cable might be the answer"

A fair number of the readers of this blog have probably already run across Senator Ted Stevens "unique" understanding of the internet. His complete misapprehension of the internet would be a giggle if he weren't the guy in charge of overseeing the internet, e-commerce and net neutrality issues for the United States.

Once you realize just how absurd this is it is no longer a giggle--it is painfully, hilariously sad. As Jon Stewart demonstrates. Take a gander at the YouTube clip.

(Tip 'o the Hat to a reader who was concerned we not miss this one.)

Cox Rasies Rates

For most folks the big telecom news of the last two days wasn't Governor Blanco's veto of HB 699 but Cox's announcement that it was going to hike rates in its recently combined Baton Rouge/Lafayette/Acadiana region.

Both the Advocate and the Advertiser have had articles on it. The Advocate ran articles both yesterday and today and the Advertiser ran one today. The Advertiser's version goes a good bit deeper into the the specifics of the changes in Lafayette and repays close attention.

It's an odd a rate increase--it raises the cost of the "expanded cable" tier, lowers the cost of the basic tier, and puts an even surcharge of $2.00 on all tiers of internet service. The internet-based VOIP phone services aren't touched. Now that doesn't make much sense if you take Sharon Kleinpeter's rationales for the increase seriously. She suggests that:
...rising programming costs, increasing fuel expenses and operating overhead associated with our rebuilding efforts directly impact retail cable pricing."There is also a lot of other costs associated with the storms, things like higher insurance rates, what everybody is feeling right now,” Kleinpeter said.
No doubt that is true enough. But as Huval retorted other folks, like LUS, who also had storm-related costs aren't raising rates and using that as an excuse. Said Huval:

But Terry Huval, director of Lafayette Utilities System, said the increase shows the need for the fiber-to-the-home plan the city has been seeking to build since April 2004. Once the city-parish has a fiber optic network in place, it will offer cable, TV and Internet service at rates 20 percent lower than Cox, Huval said.
"We had damages during the hurricane - we're not looking to increase electric rates," he said.
The difference? As far as I can tell it's that LUS, being familiar with Louisiana, plans for hurricane expenses. There's a concept. (We hear a lot of guff about poorly operated publicly owned utilities "must" be. Experience doesn't seem to bear this out.)

Whats odd about the scattershot rate increases and reductions are that fuel and hurricane rebuilding costs equally impact all parts of the business. Based on that you'd expect that Cox would raise all prices by a similar percentage across the board. But that's not what they've done--VOIP users are not bearing any additional burden while lower-tier internet users are bearing a higher proportion of the rate increase than upper tier users. Saying rising programming costs are driving up prices makes the picture even more puzzling since the really big increases in programming are in the premium channels like HBO that are not included in "expanded basic." Cox is NOT simply recouping costs; something else has to explain the particular places Cox chose to jack up their rates.

So what's going on here?

Well, one thing is that Cox is aligning prices in Baton Rouge and Acadiana. Acadiana getting a much larger "catch-up" jump than Baton Rouge. Lafayette hadn't experienced a rate increase since its people started talking about building their own fiber to the home project and so had fallen "behind" Baton Rouge and its environs. With Lafayette's decision effectively made by the people a year ago holding off on rasies in Lafayette with an eye to effecting our attitude toward Cox was no longer sensible. Similarly, with the legislature no longer meeting to consider issues that effect Cox's interests the time was ripe to raise rates.

Cox is also trying to move people off the "cheap" basic cable tier. This is a long-term project of all the cable companies. Of course, they always want people buying more expensive stuff from them but beyond this they don't like basic cable for all sorts of tangled technical and regulatory reasons. Suffice it to say that they really want you to upgrade badly. So reducing the number of channels and dropping some that are popular and useful is part of this strategy. By law they can't drop local broadcast stations or local PEG stations like AOC. But having dropped services to the bare bones required by law regulation forces them to lower prices as well. So you are now confronted with the spectacle of raising the prices on the (unregulated) "expanded basic" tier while reducing prices on "basic" cable.

No doubt they were concerned that bumping up prices would push people to the cheaper tier so it was incumbent upon them to make that tier less attractive. The gap in price between expanded basic and basic was already huge..making simple basic even less attractive is one way to try and keep anyone who was teetering on the edge of dropping back to basic with the expanded basic tier. And the difference is huge: in Lafayette it will the difference between $13 a month and $47!

So what do you get for the extra $34 dollars a month? Well ESPN, the Weather Channel, and The TV guide channel to name what looks like the most popular channels that are moved out of basic cable and into the expanded tier. That wouldn't do much for me. I don't watch ESPN, I get my weather off the web, and I much prefer TiVo's TV guide to Cox's--but if I didn't have TiVo losing the guide might really irritate me. The Expanded tier has all the lower end movie channels and popular speciality channels--channels you might recall from when they used to be offered on basic cable. Many of them gained a following there.

Of regional note in what Cox labels "Acadiana:" if you are a local French speaker you'll want to note that TV 5 has moved up from expanded basic to one the sports speciality package. Sports??? So grand mama is going to have to buy a fancy bundle of sports channels to get French programming? However the "extensive" Spanish-speaking population will have a whole new tier devoted to Spanish programming--10 channels. That's odd in a city where almost 20% of the population speaks a language other than English in the home and Spanish and Asian language speakers together are not 10% of the total. What are all those folks speaking? French? You guessed it, cher. You think maybe nobody ever talked to Cox about how out of touch this stuff makes 'em look? My guess is that LUS will be a mite more on the ball about such things.

A little reflection makes you wonder how long the tiering system can last once a converged cable/Internet system really hits the cable market. It's already easier to get your weather off the web. TiVo has a better channel guide--I'd even prefer Yahoo's if I could swap it in instead of Cox's...and I can imagine a set of software conduits that would allow me to do just that. All the movie channels? Netflix. There's a two day turn-around but you get great choice, personalized record keeping and good recommendations. With big broadband I could download all those movies and not give a fig for HBO. What remains are the specialty channels --I'd find it hard to give up the Food Network or Comedy Central (we all have our weaknesses). And finally, all the local channels. That's a real reason to keep cable...but that's only 13 bucks a month.

The only thing stopping people from bailing on Cox and moving to the net when hit with rate increases is that Cox also controls the big bandwidth that would make it possible. And they aren't aren't giving us quite enough. Yet. (Bring it on, LUS!) Cox hasn't missed this point--they're jacking up costs on bandwidth too--a uniform two bucks across the tiers. Meaning that folks who get the least are paying the highest percentage of increase. They've got you coming and going.


So Cox is catching Lafayette up to the prices that Baton Rouge has been paying. At the same time it is trying to push people off basic cable and onto its much higher-priced tiers. It's also shifting some cost to its internet service, apparently sure that it won't be hurt by BellSouth's relatively anemic offerings.

It's an interesting chess game which Cox can mostly play without considering much besides BellSouth's DSL offerings its own desire to increase its VOIP market. (As myriad studies have shown, satellite TV doesn't effect cable pricing much--though it can reduce the size of the market by establishing its own market; the two satellite providers compete but the cablecos basically ignore them.) Since it wants to grow its VOIP market and it thinks that will go a lot faster if it keeps a broad gap between that price and the plain old telephone price BellSouth charges it decides to not raise its VOIP rates at all. Instead it transfers those costs to its cable, where it is has no effective price competitor, and internet, where it has only BellSouth's anemic offerings. But that ability to arrange things to its liking will change soon enough. BellSouth will enter the video market; and after Blanco's veto it will have to actually compete with Cox; not just cherry-pick the market. LUS will also enter the market and its primary motivation will be to amass market share for its long-haul payback. Both new entrants will limit the kinds of choices Cox has been free to make. You can bet, for instance, that neither new cable company will let a 34 dollar per month gap sit unoccupied between the cheap "legal minimum" tier and the expensive everything-but-the-kitchen-sink expanded tier Cox has found to be to its advantage in an atmosphere all but devoid of competition. There will be real competition to find that sweet spot for cable--the price/channels combination that folks really want rather than the contorted setup that Cox finds most profitable in the absence of competition.

That will be a good thing.

But the real competition in the long run will be over pure bandwidth. And there the prize will go to team that can offer the most for the least. Competition in bandwidth will, eventually, kill the cable business model. And that's ok by me. Bring on the future...Downloadable Television (DV as opposed to TV) is an end devoutly to be wished.

More on the Veto

Both the Advocate and the Advertiser have articles following up yesterday's veto of HB 699.

The Advocate article does a journeyman job of reporting on the video bill veto, citing points from all sides of the issue; it focuses on the veto and on the reasons for the veto. John Hill, reporting for the Gannett papers, appears to have gotten stuck early on the idea that the real argument was between BellSouth and the cable companies. That was never true and any justification for thinking it was went away after Cox (however tepidly) joined BellSouth in advocating the bill after the cable industry was also given the ability to seek a state franchise. Even though local government opposition was what finally kiled the bill Hill fails to quote any local government representative. Talking only to proponents of the bill--one weak and one strong--results in a story that is pretty distorted.

From the Advocate:
Gov. Kathleen Blanco has vetoed legislation that would have allowed telecommunications companies, such as BellSouth, to get a statewide franchise to deliver television service.
In her veto letter on House Bill 699, Blanco cited concern about whether local governments would end up losing money...
HB699 would have allowed companies to provide cable and video services by getting a 10-year state franchise certificate. Areas that had a home-rule charter before 1974, such as East Baton Rouge Parish, would have been exempt.
That's a point worth emphasizing. Local Government types emphasize that in areas containing 35-40% of the state's people (5 parishes and about 29 cities) the AT&T/BellSouth would have still have had to negotiate traditional franchise agreements. In all honesty that includes almost everyplace, except a few wealthy exurban developments in incorporated bedroom communities, that AT&T might conceivably want to get into. The idea that this bill would have facilitated any real competition was never very credible. It was always about prohibiting build-out requirements by local governments. The law, as written, would have prevented even pre-74 charter areas from passing any local ordinances that would have required BellSouth/AT&T to serve the whole community. It was always about cherry-picking the "best" neighborhoods in the biggest cities...any talk about general "competition" was sheer rhetoric.
Widespread cherry-picking and the consequent digital divide conflicts that would have resulted is the bullet this state has dodged.

Congratulations and thanks are due Madame Blanco.

Wednesday, July 12, 2006

Veto Message

Governor Blanco's veto message is now up on the web. Take a look--what she ends up endorsing is everyone collaborating on a model local ordinance.

Sounds interesting--and like a real win for local communities.

It's worth noting that as bad a policy as this bill would have made--so it seemed utterly sensible to veto it from the point of view of supporting local communities and not entrenching the digital divide--it wasn't easy for the governor to decide to override the legislature on this; important political supporters--not the least BellSouth itself--urged her otherwise. A note of thanks would always be in order. (She's gonna get a bunch of the other sorts of letters...) You can sound off in suport at: contact@gov.state.la.us

Governor VETOS Video Bill!!

Hallelujah!!

Governor Blanco has vetoed HB 699, BellSouth's state-wide video franchising bill.

John Hill, writing for the Gannett papers confirms what an anonymous commenter at this site said this morning: Governor Blanco vetoed the bill late last night. Apparently this took place at at 11:35 last night. From the article:
House Speaker Joe Salter, D-Florien, said following a telephone conversation with the governor at mid-morning that she mentioned scratching four special appropriations and the cable competition bill that proponents said would lead to cheaper television services.
The house sponsor, Montgomery, says he was informed around 11:00 this morning (so our anonymous informant had the news before he did).

This is very good thing--as regular readers will no doubt recall Lafayette Pro Fiber has taken a hard stand against this bill and encouraged others to do the same. It was a bad bill that gave away local options to corporations that had demonstrated that they did not have the best interests of Lousiana communities at heart. The Governor's veto means that the state will have avoided embarrassing itself by making red-lining state policy. Local governments, the ones that actually maintain and own the property that BellSouth wanted free reign to use as they please can still make any sorts of bargains with BellSouth (soon to be AT&T) that are in the best interests of their citizens. And they may decide to enter into contracts that resembles the clauses of the late HB 699--but that will be their choice and not a one-size-fits-all choice dictated by the state that clearly served only the interests of a monolithic phone monopoly.

It's a good day for Louisiana. Congratulations go out to all who worked on this issue! It was a long shot from the beginning and what turned it around was that the people who saw how unjust the law would be refused to back down or give up.

Down to the Wire

Just when you thought it couldn't be put off any longer it turns out that we'll have to wait a bit longer to hear whether or not Governor Blanco will veto the state-wide video franchise law. According to the Advertiser:


Although the constitutional deadline was midnight, the governor has an additional 24 hours to notify the clerk of the House.

"We will make the announcements Wednesday," Roderick Hawkins, Blanco's deputy press secretary, said Tuesday...
Blanco and her staff were trying to sort out worthy projects from the frivolous, a sometimes difficult task as the added projects had no explanatory language accompanying them.
Also backed up against the deadline was the bill that would make it easier for telephone companies to offer television services in competition with cable companies, House Bill 699 by Rep. Billy Montgomery, D-Haughton.
The Advertiser misses the real issues, of course. It's pretty clear that the sort of competition that sold the bill to the legislature--the promise of lower prices--is not something that AT&T has any intention of following through on. When talking to investors and banks rather than legislators they are clear on the fact that they have no intention to get into "a price war." And we hear similar comments from the cablecos. It's a classic duopoly situation. No, the real reason for this bill is, as we have insisted here from the begining, to allow AT&T/BellSouth to cherry-pick only the most profitable (read: wealthy) areas to serve. Only local governments, with their stubborn insistence that if the corporations wanted to use commonly owned property for their private profit they'd have to serve all the owner, stood in their way. What this bill changes, and very little else when it comes down to it, is to cut local governments out of the equasion.

And to make red-lining state policy in telecommunications.

Legitimating BellSouth/AT&T's bad business practices is not a worthy purpose for state legislation and the bill should be vetoed on that ground alone.

Tuesday, July 11, 2006

On the Governor's Desk

BellSouth's HB 699 --the statewide video franchise bill that makes redlining an official state policy-- remains on the governor's desk and action on it is going to go down to the wire. The deadline for action is midnight tonight or it becomes law without her signature.

According to The Daily Advertiser:
Another controversial bill awaiting final action is one that allows cable television competition. After the Legislature approved it, mayors from around the state urged Blanco to veto it, claiming that the bill would trample on their authority and cost them huge sums in cable contracts.
Most of the reporting this morning is over a website tossed up by a Baton Rouge man which channels anti-"pork" emails to the governor. He hopes that will move the governor.

We've had a similar hope: that emails will move her to veto HB 699. But a phone call would be even better. (Havn't been following this one? More info can be found in an earlier post.)

One last time to the trough:

  • Toll-free: 1-866.310.7617 (This toll-free number is not always picked up. Try it first but be prepared to whip out your cell and call the alternate number.)
  • Alternate: (225) 342-0991 (Nice lady answers the phone and takes your brief message.)
  • Fax: (225) 342-7099
  • Web-based email: Email the Governor (the webmail script does not execute correctly on my setup--though it apparently works for some; the embedded email address is: contact@gov.state.la.us --it might be wiser to use that than to trust the webmail form.

Sunday, July 09, 2006

Advocate Brief on Veto Deadlines

The Advocate carries a brief bit today on the possible veto of the no-good, very bad video franchise bill pushed through the legislature over local objections.
Terry Ryder said 16 bills were pending action as the weekend started, including the budget and state construction program, one that could shield nursing homes from budget cuts and a cable TV competition measure.

So far, the governor has publicly announced the veto of one measure. Ryder said several other bills have been vetoed but phone calls are being made to proponents and reasons for the vetoes written for delivery to the House and Senate.
You can still add your voice to those who'd like to make sure that one of the bills that the Governor is making polite notifications calls letting sponsors know she has vetoed them is HB 699.

See the bottom of this recent post (correction!-that should have been this post) for the list of phone numbers and email address through which you can let Blanco know your mind.

Coops for the Last Mile?

Here's something to think about: Ownership of the last mile of network connectivity. In Lafayette we've already thought some about this--and decided that the alternative of an advanced, publicly-owned last mile network should be available to our citizens. We got there the old-fashioned way: via a fight with incumbent providers who refused to provide what the community wanted.

Robert X Cringely has joined a chorus of folks in the national debate in asking if its not time to consider a solution to the net neutrality problem that cuts the big guys/bad actors out of the control of the crucial last mile of the internet. Monopoly/duopoly control of the last mile is all that gives them the power to insist on organizing the net to maximize their profit.

The insurgent idea comes down to folks in the last mile forming Cooperatives (like Slemco but probably smaller), to fund the build with cheap loans from the likes of Microsoft and Google and to simply bypass the incumbents in enough places to force them to act like free enterprise entities rather than monopolies. It's a structural rather than regulatory solution.

Cringley has put up a short list of links to some of the proponents of the ideas--and once you're started you can find more discussion on the net--so if you want to spend a part of your day creatively exploring the possibilities I'd be interested to hear what you come up with. (I've got my own opinions, natch, and will try and put something up on that when I make it back to town.)

Saturday, July 08, 2006

Cingular accused of deceiving customers

What happens to the customers when AT&T takes over a competitor? According to a recent set of reports on a class action lawsuit filed against Cingular (ironic, eh? poetic justice, no?) the picture is pretty ugly. That's not reassuring as the South braces for the buyout of BellSouth by the newly reconstituted AT&T.

According to the accusations Cingular failed to maintain the customers' network as promised and "nickel and dimed" the customers with transfer fees and by forcing them onto new phones.

The lawsuit, which alleges breach of contract and violations of consumer protection laws, seeks class-action status on behalf of the more than 20 million customers AT&T Wireless had at the time of the merger. Many paid $18 "transfer" fees to switch to Cingular plans and were required to buy new phones or pay other fees, said the complaint filed in U.S. District Court in Seattle.

"Everyone who signed an AT&T contract had their service degraded," attorney Mike Withey said at a news conference Thursday.

In a strange twist of corporate irony, the company accused of abusing AT&T Wireless customers will soon to be AT&T Wireless again.

Cingular is supposed to take on the name AT&T Wireless after the takeover of BellSouth. BellSouth is currently a 40% shareholder in Cingular and it is widely bruted about that AT&T is not buying BellSouth for its Southeastern network--which is losing marketshare and lines every year--but to gain full control of Cingular which is making nice piles of money.

The switch to the name AT&T Wireless makes sense in a way--when SBC bought AT&T recently it took on its historic name. Having AT&T in the name of both the wireline and the wireless services would unify the brand. What's a little odd is that Cingular bought AT&T Wireless back in '04 and didn't take the name then. The scuttlebutt was that it had become damaged goods.

The experience of AT&T Wireless customers does not bode well for BellSouth's customers. AT&T customers could, at least, wait out their contracts and jump ship for a competing wireless service if they wanted. BellSouth's landline customers will have no such alternative.

Municipal Broadband a Threat

Analysts at Pike & Fischer say: Municipal Broadband Will Pose Growing Threat to For-Profit Operators.
The analysis concludes that muni nets -- depending on the type of broadband technologies used -- could grab up to 35% of the market share for video, fixed voice and high-speed Internet services, and up to 20% of the mobile-services market.
That's a pretty succinct rendering of the competitive threat that municipalities provide the private providers. BellSouth and Cox have always talked out of two sides of their mouth on this. Mostly the incumbents have claimed that "of course" municipal broadband must fail--even in the face of the success of municipal electricity.

But if that were really true why did they go into panic mode to oppose it instead of just sitting back, competing it into the ground and taking over the network at pennies on the dollar? They fought like tigers because they knew that what they were telling the public was not true. They knew that municipalities could take significant market share, and even more importantly, drive down prices.

The combined effect of taking market share and lowering prices could be dramatic:
Cable operators, DSL providers and other incumbent broadband service providers could eventually see their revenues fall by as much as 48% due to competition from city-run broadband networks
And, of course, part of the danger is that publicly funded municipal services wouldn't be analyzing the value of their networks solely in monetary terms. A different metric--one that private providers seem incapable of matching unless they are small and local--would be in play:
"The competitive impacts of municipal broadband will be especially threatening to incumbents to the extent that muni nets can be cost-justified by increased efficiencies, cost-savings and other 'internal' or 'social' benefits captured by local governments, schools, and other public institutions," the report states.
That's a lot closer to the truth than any stuff that will be feed you by the local duopoly.

They're panicked about the competition and they don't tell us that because they don't figure we'd be very sympathetic.

And we're not.

Friday, July 07, 2006

BellSouth's Cable Franchising Bill

Well folks we're in the last days of waiting for Governor Blanco to decide whether or not to veto, sign, or allow HB 699 to become law without her signature. She has (and you have) until July 10th, next Monday to act.

We're hoping for a veto, of course. The law remains a terrible one that strips local governments of the control of its own property, transfers that control to the state, which then does nothing with it other than to free mostly BellSouth/AT&T of its previous obligation to serve the whole community instead of only the most profitable parts. It's a bad idea on its face.

The fact that AT&T, the company that is buying BellSouth and to whom the excess profits of this law will flow, has always promised that its services will NOT be cheaper than cable's means that even the promise of "competition" for the rich won't save anybody much money. In truth what this bill will do is to bolster AT&T's bottom line at the expense of the "lower value" neighborhoods and rural communities.

While those essential elements of the bill have not changed and remain a firm basis for repeal, opponents should be heartened by the changes the public outcry has wrought. The most appalling add-ons to the core bad idea have been stripped from the bill: a self-interested new state bureaucracy has been stripped away, the fee loophole that BellSouth designed for itself appears to have been closed, and the ability of corporations to ignore the local government owners of property it uses has been narrowed. Public outrage has made a difference in this bill.

Public outrage might yet spike the whole thing. She heard from the public earlier, recently she heard from the state's parish and municipal leaders. In these last days she might well be waiting to see if the concern about this bill will fade. Your job is to make sure that she understands that you (and your friends) haven't forgotten about it:

Toll-free: 1-866.310.7617 (This toll-free number is not always picked up. Try it first but be prepared to whip out your cell and call the alternate number.)
Alternate: (225) 342-0991 (Nice lady answers the phone and takes your brief message.)
Fax: (225) 342-7099
Web-based email: Email the Governor (the webmail script does not execute correctly on my setup--though it apparently works for some; the embedded email address is: contact@gov.state.la.us --it might be wiser to use that than to trust the webmail form.

Municipal broadband and wireless map

CNet, back when it did it's article on municipal broadband, produced a nifty map of all the public municipal telecom projects in the country. It was a great idea. Trouble was it wasn't all that accurate on day one and rapidly became outdated to the point of being misleading.

It was a poster child for the consistent web problem of not updating or taking down pages with rapidly changing data.

That's changed--at least for now. The page has been updated, it appears to be basically accurate about what it references for those areas that I know something about (for instance Louisiana is now listed as a state with a restrictive law and it catches some obscure rural wifi attempts). And, happily, the page now contains a "last updated" tagline which will allow future users who stumble across it to know the age of the data.

Take a look, you'll be surprised at how many projects there are...not everyone is willing to wait for the big boys to come in to offer the service they need.

Wednesday, July 05, 2006

Advice: Be Angry

The Advertiser, in this morning's editorial, advocates that we feel some anger about the continuing attempts to abuse the legal system in an attempt to stop the fiber to the home project.

They're right, if woefully late to that conclusion. Of course we should be angry--and the Advertiser lays out the reasons.

1) Simple fairness:
The people support the project. The courts have found no legal basis for preventing the venture from going forward. Any further effort to use the courts to thwart the will of the people would be absurd.
2) Cost:
The cost of the delaying tactics is substantial, and we who support the project pay a substantial part. First, of course, the cost of defending against the ongoing lawsuits falls on all Lafayette's taxpayers. LUS legal fees have totaled $100,000 thus far, and the cost will rise with the expected appeal and any other future litigation. Interest rates have increased 0.3 percent during the delays. That translates to an additional $6 million in the cost of paying back the bonds.
(That .3% is actually only the part that is attributable to the Naquin-Eastin legal delays--had we not had delays in the legislature, earlier court delays, an unnecessary referendum to confirm what the council had already decided, a PSC delaying battle, and the initial attempts to legally outlaw the project LUS would already be serving customers and saving us all money. A year ago, when the referendum passed, the rates were a full 2 points lower than they are today. Two years ago, when Cox and BellSouth were passing the (un)Fair Competition Act, they were a 3 and a half points lower. Driving up the costs to LUS has always been a prime motivation of the incumbent's delaying tactics.)

3) Lost Benefits:

...What really is at stake is the competitive position of our community in a global economy. The world is experiencing what the Federal Communications Commission calls the "communications revolution." In the years ahead, progress in Lafayette and around the world will be via the information highway. Becoming a leader in telecommunications will position Lafayette for powerful economic progress.

What the city envisions is an infrastructure for the high-tech world of the future. In the very near future, the movement of information will be as much a focus of business and industry - or more so - than the movement of cargo on today's air, rail and highway transportation infrastructure. The availability of advanced, affordable telecommunications services to assure the ultimate efficiency in the transfer of information will be a priority of businesses looking for places to locate or expand operations. The LUS plan will draw them here.

To that I would add savings. LUS will drive prices down. Just the suggestion that LUS will compete has kept Cox from posting any price increases. If we already had the system we'd be seeing even more savings. And have a system we could all be proud of.

The Advertiser closes with:
Citizens of Lafayette should be angered by the stubborn attempts to deprive the community of these tangible benefits.
Yes, we should. And yes, we are.

Now that begs the question of just who we should be angry at. And the answer is all of 'em. The executives at Cox and BellSouth, Elizabeth Easton, Matthew Naquin and the Pendley law firm out of Plaquimines. If you know any of these folks let 'em know what you think.

Monday, July 03, 2006

Rural Ambitions?

Municipal Telecom in Louisiana has been mostly about Lafayette and New Orleans--and mostly about their fight with the cable and phone corporations. We've occasionally reported on other alternative local providers of telecommunications like Kaplan Telephone, EATel, or Cameron Communications and even more occasionally on various private wifi outfits. For my own part I'm a little hesitant to get to excited about private wifi groups with the aspiration to sell retail services to consumers. Both Lafayette and Baton Rouge have had experiences with private providers who announced grand plans that never really materialized in their announced form.

Baton Rouge's much bally-hooed downtown wifi project is a case in point. I've never been able to get a good signal and a friend of mine who lives downtown says he finds it unreliable. The project just "shut down" for a month recently and didn't come back up until they found a buyer willing to operate it.

(Timeout for a complaint: This is what is known as a business failure and you can bet that if it had been the city of Baton Rouge running the system it would have made the Wall Street Journal and been treated as proof positive of the incompetence of local governments. But the WSJ is not going to even notice this failure; heck the Advocate didn't even notice until someone with connections bought up the hardware, presumably at fire sale prices. Are we going to see a spate of letters to the Advocate and two worried editorials suggesting that private enterprise is in trouble? That private entrepreneurs can't be relied on to fulfill their promises to the community and that the customers left stranded without service should be compensated the way we would if the enterprise had been public? Nope, we will not...and no one but some lone blogger will ever notice the unequal standards applied. Thanks, I feel better now. Back to the story.)

While The Advocate found the connections of the new partners most interesting my attention was caught by the new firms ambitions. Some of them are fairly conventional as the firm switches to relatively proven business models:

[Partner] MacDonald ... said that as the new company expands, JoVoGo will offer Wi-Fi to hotels, airports, residential areas, office buildings and other public areas.

And some of the ambitions reach out toward ambitions understood to be the province of wireline carriers. Ambitions that many doubt wireless carriers have the practical bandwidth or the consistency of service to provide commercially:

He also said that eventually, the company will offer “VoIP,” Internet-based telephony, as well as online video broadcasting, known as IPTV.

MacDonald acknowledged that by offering those services JoVoGo will go head-to-head with larger competitors such as Cox Communications and Bellsouth’s DSL product.

But final ambition seems most likely to be practically realizable--the company apparently has rural ambitions:

“Cities and towns want these networks, and there’s nothing anybody can do to stop the process,” he said of Wi-Fi. “Our goal is to work with traditional telecommunications companies to get their customers on the Internet.”

Powers said that between all three founders, the company has a solid base of contacts both in and out of state, as well as a mix of expertise.

He said that MacDonald is familiar with the technical side, while Brewer “knows how to deal with local governments to hopefully bring Wi-Fi to other communities to use as an economic development tool.”

Meanwhile, Powers said his own role in JoVoGo is seeking government grants and other financial assistance to deploy the technology in other communities.

He said the U.S. Department of Agriculture in particular offers grants, low-interest loans and no-interest loans to develop telecommunications in rural areas. For example, he said, USDA has a program aimed at getting Internet connectivity in municipalities with less than 20,000 people.

“The government sees the need to expand the information network to rural and underserved communities,” he said.
Now if you listen carefully there's a carrot being held out to both the telecoms and the municipals. They're suggesting that they could be hired to provide services to both companies like BellSouth or Cox and local communities. It'll prove hard to serve both masters.

BellSouth and Cox are both working wireless deals in various ways. BellSouth in particular has made claims about providing its IPTV service during the recent franchise debate that it just doesn't have the capacity to carry off. Rural areas will simply not get the new services that BellSouth let rural legislators think was possible. But they might well, in some places find it feasible to rebrand a well-connected local wireless providers signal. Others of the telecos are already doing this in attempts to placate localities.

Even more promising might be to team up with some smallish communities that don't have decent internet service now. That's the (so far unproven, but promising) model the America's big cities are trying out right now. It would seem a more promising business model for small towns, in all honesty.

This company, JoVoGo Communications, is worth watching. Even if it flames out as so many private providers in this field seem to do its ambitions are well worth watching and might actually benefit some communities that really could use a provider.

Saturday, July 01, 2006

Elizabeth Naquin and Matthew Eastin--Why?

Elizabeth Naquin and Matthew Eastin have cost their neighbors 6 million dollars since they decided to oppose what the people of the community clearly said they wanted last July 16th. That was the message of a clearly frustrated and angry Terry Huval and Dee Stanley at the news that the pair and their class-acton suit lawyers had filed an appeal of their recent loss in court.

The news media were on this, for a change. The Advocate, The Advertiser, KATC (with PC only video) and KLFY all run major stories--and they are all worth a look.

There clearly comes a point when such expensive obstructionism becomes a real issue for the community and it may be that this press conference marks that point. The question that everyone wants to ask is, of course: Why? Why pursue a course that only costs your neighbors so much money in order to frustrate their clear desire? Nobody believes that this has much to do really with utility rates. LUS has never had high rates and is perfectly free to set whatever rates it wants to set in any case. Nobody really thinks that a lawsuit that challenges the rates has a prayer of succeeding. And nobody thinks that suing over rates in years past has any real relation to preventing LUS to sell revenue bonds to build a business that didn't even exist when the utility rates in question were set.

History helps us understand at least part of the reason that Naquin and Eastin are doing this--they are tools of the incumbent providers. The original version of this lawsuit originated during the fiber referendum fight and was nearly a direct copy of a suit filed by BellSouth with the exception of trying to promote the idea that "in lieu of taxes" is somehow an unfair tax on the people. That little bit of propaganda went nowhere an nobody really noticed when a judge dismissed the lawsuit (see the timeline in today's Advertiser). The attempts to delay the LUS project passed the Public Service Commission and for a time lawsuits to delay LUS were superfluous. Given that history we shouldn't be surprised to notice that after months of not having a suit active the lawyers and Naquin and Eastin only showed back up at the exact moment when BellSouth and Cox needed a new lawsuit to counter Lafayette's attempt to repeal the (un)Fair Competition Act. Lafayette caved at the threat by BellSouth to sue again and cut a deal to withdraw their repeal bills. BellSouth let its suit die. The Naquin and Eastin lawsuit didn't get included in the final deal amid claims by BS that it didn't sponsor this one and hints that maybe Cox did.

Eastin and Naquin have never shown any interest in the actual fiber issue as multiple stories attest; they have never shown up at any council meeting or LPUA meeting; they've never shown their face in public opposition. With that in mind it's a little hard to take seriously the idea that they are self-motivated by anything that approaches idealism to oppose the voters of the city. As today's stories make clear they are not trying to save the people of the city any money. If that was their purpose they'd demand that their lawyers not entangle the bond issue that is costing the community so much money--and delaying a project for which the people voted. No, it is simply impossible to believe that Naquin and Eastin are hoping to benefit the community.

So why? The remaining explanations are pretty clearly self-serving.
  1. They remain simply the tools of the incumbents. (Somebody has to be paying for these lawyers to keep four (count 'em!) lawsuits in different courts running. Who is paying for this? This 62 year old Elizabeth Naquin woman and Eastin? I have to doubt it.)
  2. They're hoping for a big bucket of money and are willing to blackmail the community in the hopes that the city will fork over a pay-off to get the chance to go forward. (Ain't gonna happen.)
  3. They actually think the lawsuit has a chance and that there would be a pot of gold at the end of the rainbow that they are willing to split with the lawyers. However, if the lawyers I've talked to are right there is really no chance of this. A win would only result in a long-term repayment in the form of a little bit of money rebated on each bill. There is no pot of money coming in any case. If their lawyers are telling them different they need to talk to other lawyers. Their own lawyers have undoubtedly made sure their cut is coming from somewhere.
There just aren't all that many explanations for what is going on here as long as Eastin and Naquin are standing in the way of the bond issue. They're costing the people of the community money and delaying a project the people voted for. It's all pretty ugly.