Monday, February 26, 2007

Round Two?

Bill Decker has published one of his occasional commentaries on the LUS fiber project. Decker has matured, going from a rabid opponent to one who has, intermittently, sounded like a reluctant proponent. This morning's offering is "Round one in fiber fight goes to LUS; round two up next." The underlying take, as Decker sees it, is that LUS may have (finally) secured the right to enter into competition (round one) but that actual competition (round two) is another matter--and that Cox, in particular, is going to be a competitor.

I think there has be a better metaphor out there than the boxing one. In boxing there is considerable effort put into making sure that the fight is a fair one. It's hard to imagine a boxing commission, for instance, that would allow one of the dominant heavyweights to compose and bring to them a re-written set of rules that would forbid a new bantam-weight from even getting into the game. Even if the heavyweight said the newcomer had an unfair advantage because he was light and quick. The commission would laugh heavyweight out of the room and tell him the bantam-weight was no threat to his standing. It's hard to imagine that they'd do as our state government did and "compromise" by letting the bantam-weight fight but insisting that he wear heavy ankle and wrist weights tied together by "light" bungie cords to compensate for his "advantage" in the upcoming battles. (But then boxing commissions have some sense of fairness.)

However, Decker is right to say that we are entering a new phrase. And right to cite Kutztown as a one example of what we might expect in the future. (See earlier LPF entries on the town: 1, 2, 3) Kutztown is not even a bantamweight; at 5000 people small it couldn't rate higher than
Minimumweight. But it turns out that size is not the real issue—customer trust and loyalty are. Kutztown has succeeded admirably even in the face of what seems like the open and shut case of predatory pricing described in Decker's commentary. It now has a healthy locally-owned telecom utility that saves its township beaucoup money every year.

Kurtztown demonstrates that the little guy can be successful if it gets community support. But there's more to look forward based on looking at Kutztown than the business not failing or even saving their subscribers a chunk of change. And a chunk of change it is--over one 3 year period little Kutztown saved its townfolk $400,000 dollars over what others nearby were paying. That's not just money that stays in local pockets--its is also money that is much more likely to be spent locally--money that does not drain wealth toward some corporate center.

Unfortunately, Decker, even while offering us the evidence we need to assure ourselves that it is possible to radically undercut the incumbent's monopoly pricing doesn't seem to have much faith in our much larger town's ability to match little Kutztown. He says:

LUS clings to its original claim that it can offer phone, Internet and some level of TV service for $85 a month. Even if we build in a 25 percent government bull factor, the LUS fiber services would be very competitive with those offered by Cox, maybe a little less so with BellSouth's rates.

So talk up, turn on and log in. Let slip the dogs of war. If you get a good deal, get it long-term, and get it in writing.

I've got more faith in Lafayette than that. I'm uncertain, on the basis of the evidence that he himself presents, as to what funds Decker's lack of faith.

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