Thursday, January 18, 2007

LUS Seeking Wireless Bids

According to the Advertiser LUS is:
...is accepting sealed proposals from companies interested in supplying equipment for its proposed wireless service.

Lafayette Utility Services is in Phase 1 of a wireless network project that will allow LUS field crews to upload and update customer information and other data without returning to the office.
This makes good sense on its own. LUS is running a complex multi-headed business focused on businesses which require truck rolls and remote meter-reading. Getting out from under the connectivity charges of the majors and doing it yourself is the route that a number of such utilities have taken. (It's a route that municipalities have taken as well; our EMS system, for instance, has an independent wireless network.) One of the dirty little secrets of the American telecom system is that it is much, much cheaper for even small operations to own their own networks if they can get hold of the airwaves to do it.--That should be proof that the big guys are seriously overcharging since there should be huge economies of scale in building and maintaining telecom networks.

But, of course, the good business sense this move shows is not the immediate interest for most readers of this blog: reading the tea leaves about a much-speculated-on wireless network to piggy-back on top of the city's in-limbo fiber optic network is what most of us will be interested in.

And there is an historical pattern here that would lead anyone who has closely followed the path of the city's fiber optic development to wonder. Lafayette's fiber-optics hopes were substantially aided by the fact that LUS had already built a set of fiber-optic loops around the city connecting its electrical substations that proved its competence and provided a substantial in-place backbone to build on. Like wireless networks for EMS building a fiber-optic network to support load-balancing and other issues is something that forward-looking electrical utitlities have been doing pretty widely. What made LUS' network a little different was that it had a very large capacity. Putting in more strands of fiber optics than you need while laying down the network made sense. Very little of the expense was in glass cables themselves. Almost all of the cost was in the construction and electronics necessary to make the glass useful.

Putting in extra capacity to expand was almost free and making sure that there as plenty of available capacity just made sense. For one thing, having the extra capacity made it possible to offer to wholesale bandwidth to resellers--something that it was hoped would both help pay for the network and would serve as an additional incentive to local development. (That's worked out pretty well even if the hopes that someone would resell to the public, an idea LUS encouraged, were never realized.)

But the extra capacity also made a lot of sense to the incumbent telecom providers in Lafayette. Both Cox and BellSouth opposed Lafayette building that backbone with Cox making its objections at city council meetings and BellSouth withdrawing from the local chamber over the issue. That opposition was a preview of what the community could expect during the fiber fight. Few in government or the utility were surprised at the depth of opposition to municipal fiber the incumbents showed. That, it was clear, was what they most feared from the beginning.

So if we want to learn from history we will pay close attention to the details of the Request For Proposals (RFP) that LUS uses to define its project. Some questions to ask:
  1. Does it include a very strong backbone "supply" element?
  2. Are upgrade "hooks" part of the proposed deal?
  3. Does it assume ubiquitous fiber?
  4. Does it use owned spectrum for local backhaul? Or open? Or fiber?
  5. Does it use open spectrum for the final connection?
  6. What technologies are specified....WiFi, WiMax, etc...?
  7. What applications are supported; either explicitly or through the specification of indicative standards?
At any rate, we should all be pleased to see LUS building a wireless network. It augurs well for a future wireless network we all can use.

For my money Lafayette should have a wireless network built on and integrated into our prospective fiber network. LUS is the place where this integration can happen. It's looking good folks.

6 comments:

Anonymous said...

John: saw the artilce in the paper and knew you would be on top of it. Question: Any reason LUS should not get RFP's for city wide wireless for everyone to use?

Tim

John said...

Tim,

I think you know pretty well why LUS can't issue an RFP for community wireless.

Mainly because, at this juncture, it isn't legal. The city of New Orleans tried to build a wireless network for its community and got slapped down hard by BellSouth and Cox.

New Orleans' system, and any prospective one here run into the same barrier that Lafayette faces with its fiber build: The Local Government (un)Fair Competition Act.

Until that incumbent-designed law is repealed or Lafayette's referendum is validated in court issuing an RFP with that element would be asking legitimate companies to bid on an illegal act.

Will you join us at the legislature in the repeal fight?

Anonymous said...

John: No, I didn't know it was illegal for LUS to build out a wireless system and I don't think it is. Isn't that what the city of Broussrd was trying to do? Wireless was one of the suggestions we made, and I will certainly back that, if anyone cares. Can you please point me to that portion of the law.

As to repeal? I agree that the law should be rewritten so that legislative intent is clear. I favor an open and net neutural system which allows for anyone, including LUS, to compete as a service and content provider over municipal lines. I have never been against LUS or any other municipality building out communications, what I question is the economic feasliblty of the business plan and the wisdom of the closed retail model. I have always believed the courts would not allow the subsidy of the retail model and thus the business plan would fail. Lets see what the courts says. Maybe I am wrong. If I am, and the project goes ahead, I support LUS and the vote. Sign me up.

Tim

John said...

Tim,

The law makes NO distinction between wired and wireless municipal networks. Its intent is equally to strangle them both in their cribs. You'll not find reference to any specific delivery method. Wired, wireless, BPL, semaphore or messages passed by ants: if they meet the criteria for usefully quick operation they are all subject to crippling restrictions that only apply when a community wants to provide for itself. (None of the same restrictions apply to BellSouth or Cox, of course--after all they authored the law originally.)

New Orleans ran into this very specifically with its attempt to keep a wireless network it repurposed from other city functions after Katrina working. Cox and BellSouth fought attempts to specifically exclude wireless from the act in the state legislature. I covered this extensively at the time. (There was a lot of hoorah at the time and it went on for months. Surely if you were attentive enough to have caught the bit about Broussard that wasn't even published in the regular daily you didn't miss all that?)

Yes Broussard did mention wireless. And I commented at the time that it would be illegal should they not go through the elaborate process, including a referendum, mandated by the revised (un)Fair Act. Could Broussard legally just go ahead and build a system for its cop cars and water utility to use? Yes. But for its people; the ones who paid for the system? Not after the (un)Fair Act.

To just go ahead and start soliciting for work without first making what you are soliciting for a legal possibility puts businesses that are trying to work with you in an impossible situation. New Orleans couldn't have done it and gotten useful bids. Broussard won't be able to. Lafayette won't put people in that position. And shouldn't.

I'm glad to hear you've come around to thinking that the major problem with the business model is BellSouth's law (even if you think this a good law). I'm hoping that eventually you will see your old allies motivation for what it really is: a greed-motivated attempt to block the sensible decision of our community (like many others) to do for ourselves what they declined to do for us.

A New Orleans Ref:
http://lafayetteprofiber.com/Blog/2006/04/new-orleans-to-defy-bellsouths-law.html

Anonymous said...

John
New Orleans, Broussard, and Lafayette can offer 128k wireless free to the public. Why don't you acknowledge this in your remarks?
Private sector internet providers pay big dollars to build out wire and wireless networks with the intent to see a return on their investment from selling covered services (internet services faster that 128k). A return on the investment will require constant upgrades to the network to remain competitive with other players in the industry.

The reason the Fair Competition Act would prevent a municipality from giving high speed connectivity away is because it would be considered subsidizing the covered services (internet services faster that 128k) with tax dollars.

You see John; once our state allows municipalities or parishes to offer these covered services and eliminate the private providers by offering free services, the people will depend on Government to use tax dollars for the upgrades to the network. You and I both know the expensive upgrades are not the wires but the computer components that allow data to be transferred. Your solution would be a great way to grow government bigger and bigger but I am not sure we need that in Louisiana.

I do agree with Tim that the Fair Competition Act should be clearer to prevent any cross subsidizing of covered services (internet services faster that 128k) with tax dollars or municipal owned utility revenues. Let me tell you, THIS WAS THE INTENT OF THE ACT.

Louisiana has a history of being last on a number of lists and I don’t think the State Government can afford updating the technology to keep up with other states that are allowing private providers to collect for covered services and reinvesting revenues into their network to compete.

John said...

Anono,

First, you imply that you have some special knowledge of intent. Since you won't back that up with who you really are you won't mind that I (and discerning readers) ignore such claims. (If you have the courage of your convictions you shouldn't be afraid to back that up with your reputation as both Tim Supple and I are willing to do.)

As to 128k: I explicitly noted that no one could offer useful speeds. 128k, in todays world, isn't useful. I think you recognize that since your whole point seems to be that it is ok to forbid any municipality from competing with the sacred corporate behemoths -- since 128k is too low to challenge them its ok in your estimation to offer it. For precisely the reason that its not useful to the people it's worthless as competition. We think more is necessary to offer the monopolists some competition. That's a matter of judgment. Most people here in Lafayette, however, agree that we should offer real competition. By our best measure: 68%.

You are simply wrong about the purpose of the law: NOTHING is said about cross-subsidization in the purposes of the law. But, on the other hand we do see this in the purposes section:

----

"To ensure that when a local government provides to its inhabitants cable television services, telecommunications services or advanced services, or any combination thereof, and competes with private providers whose activities are regulated by the local governmental entity, the local government does not discriminate against the competing providers of the same services.

To ensure that when a local government provides to its inhabitants cable television services, telecommunications services or advanced services, or any combination thereof, it will not be precluded from engaging in "bundling" those services or engaging in any other lawful business practice that its private-sector competitors are legally permitted to engage in."

-----

The bit about "cross-subsidization" that the incumbents have ridden into court and used to delay the project is NOT central to the purpose of the act; it is a clause that favors the corporations by making it more expensive for small local governments to compete.

The purposes of the act are all about encouraging fair competition, development and free speech. The "cross-subsidization" bit is in direct contradiction to an essential purpose cited above: that LUS and similar muni bodies not be:

"precluded from engaging in "bundling" those services or engaging in any other lawful business practice that its private-sector competitors are legally permitted to engage in."

BellSouth/AT&T, enormously larger and more powerful than our little LUS is allowed to rake in huge "cross-subsidization" from its businesses in other states and countries and from its businesses like wireless that aren't even in the same category...While LUS is UNFAIRLY prevented from doing the same.

You've got the purposes of the act mixed up with what you wish were true. The act is unfair because it uses the power of the state to force a disastrous law, written by the corporations who benefit from it, on local communities. The people of Lafayette have spoken and, frankly, the state shouldn't be abusing its power to tell us what to do with our own resources.

(There are a lot of people who claim to be conservatives who favor this law--and a lot who don't. The ones who favor it reveal themselves as corporate shills opposed to allowing the people to do for themselves what corporations refuse to do for them.--And reveal themselves as well as the paternalistic elitists that they accuse liberals of being. They think they know better than local citizens what will be best for each local community from their position on top of the hill and are wiling to force their judgment on those communities by the naked exercise of state power. FOR SHAME!)