Tuesday, February 03, 2009

"LUS Fiber delays start" (Updated)

LUS has missed its deadline to serve the first customers in January of this year. They point to uncompleted contracts for cable channels as the reason for the delay—contracts LUS has signed but the folks that control the channel packages have not returned. All the recent coverage has hinted at such a delay: Huval has said for at least a month or six weeks that the only thing standing in the way of a launch was those contracts.

As to the story and the situation: Arrrgh. Let's start with the headline.

"LUS Fiber delays start"? Start? Really? How 'bout "LUS Fiber delay starts"? *(See update below) See what a difference the accurate placement of a single letter can make? I've complained endlessly and without effect about the tendency to sensationalize in the Advertiser so I won't belabor the point today. Just note that it's not a new frustration. I'll also take the opportunity to renew the plaint that the Adverstiser not ignore what has really delayed this project for years: the unremitting opposition of the incumbent providers: AT&T and Cox. As story about "delays" that carefully doesn't mention the source of years of delay is simply suspect reporting.

Ok, glad to get that off my chest. Still, there's a bit more complaining to do. :-)

The story does report on a real question that does need to be covered. The only thing worse than sensationalism would be to not cover it at all: LUS has missed its self-imposed deadline to serve the first customers by January of this year. And it let that date pass without making a public announcement in advance of the event. That's just not good public relations—or marketing. Better, much better, would be to hold a press conference lay it all out explicitly and to put it in the context of a huge project the people have been patiently waiting for — and a minor delay in comparison to the other painful delays that have occured as a consequence of outside interference. Get ahead of this sort of thing is the advice I would have given. My honest hope is that LUS intended announce this at last Tuesday's Council meeting—but if so I think they were mistaken to have honored the council's request to put it off. Granted the Council was right about their agenda and that did turn out to be an ungoodly long meeting. But LUS and the administration would have been smart to have asked for 5 minutes of the council's indulgence for a quick update that covered the change in plans if they could not stomach a full press conference. I strongly suspect that we will hear about it tonight's council meeting...I do expect that LUS will send out those promised blue announcement cards as soon as possible; possibly even this week. But the PR mistake will linger.

Beyond my frustrated complaint about the way the Adverstiser and LUS have handled this affair there is likely a really interesting story to tell. Or several. Which contracts with national providers have not completed signing? (We know the ones with local stations are done—including one that ended up in an FCC complaint.) What factors are playing into the decision to not launch with an incomplete linup? What is the source of the dispute? Was there another way to handle these contracts? Any one of these would make a useful story.

The question of which providers have neglected to return signed contracts might be interesting because we know that some packages are actually owned by incumbent cable providers who might well think it useful to embarass a standard bearer for municipal broadband. For instance, Time-Warner includes among its subdiaries major cable provider Time-Warner Cable as well as a huge set of cable channel packages including HBO, Turner Broadcasting (TMC), WB, CNN, and the Cartoon network. Comcast owns Cox owns the Travel channel. It's not a big stretch to think the cable companies might find this an easy tactic to use: Comcast, for instance, is famous for using its control of various sporting channels and contracts to its advantage in larger contract negotiations.

Why not just launch without the last few channels? You could always give a price break/rebate on the portion of the final package that customers don't get. The factors that are in play in deciding to delay the launch, and bear the cost of bad publicity, must include the so-called "Fair Competion" Act that the incumbents initially wrote and the legislature finally passed. The purpose of the act was far from "fair competition," instead it consists of a series of restrictions that apply only to the publicly-owned competition. (Only LUS in our state.) One of the elements in that law starts a time clock with dire consequences for LUS if it doesn't make a paper profit by a particular date. So any slow start imposes penalties by law...LUS needs to start off fast, and could easily conclude that not having the channel lineup complete would lead people to take a "wait and see" stance—not something they can afford to encourage.

If there are contracts outstanding one has to think that there have been disputes over carriage terms. LUS has apparently not just accepted anything that they are offered and have tried to hold out for good terms. The most obvious reason to hold out might well be simple cost: there is some push and pull on cost and providers naturally want to get as much as possible for their product and could well think that LUS doesn't have as much to bargin with as the monster companies like Cox or Comcast. But there may well be more subtle and even more disturbing possibilities. We here in Lafayette think its a great thing to get a 100 meg intranet and set-top boxes with even limited internet capacity. But content providers in this country are well known for their at-times irrational response to the rapidly growing dominance of the internet and all digital media. They've been noticeably antsy about IPTV (Internet Protocal TV as opposed to RF-based cable) and I've heard that the mention of opening the settop boxes through which "their" media flows to the evil internet for digital divide reasons causes them some irrational spasms. Trying to step in and dictate local policy as to who does and does not get internet access under the guise of protecting their interests would be all too in-character for an industry everyone has learned to disdain. (Video owners would be wise to learn from the painful experience of the music industry.—Standing in front of the engine of change and trying to slow it down only gets you run over.)

Finally, LUS initially intended to join a coop to get its programming and probably could do so in the future. But at the moment they became set on trying to write their own contracts that window was closed by an odd set of events that temporarily closed the coop to new membership. I'd heard that they'd actually managed to secure some improved deals on the contracts they were able to close early on...but that may not have proven a consistent consequence. They may eventually decide to backout and take advantage of the coop offerings in some cases—contracts that might be cheaper or have fewer use restrictions. This is a murky area, but like I said, an interesting one to follow-up on.

Laigniappe: There's also a story on the line cuts that have followed digging up a big chunk of the city. While any breaks in service, and especially gas breaks, are disturbing they are also inevitable as the utility digs up a huge chunk of the city.

Update 12:42 am 2/4: My wife suggests another interpretation of the headline "LUS Fiber delays start" that points out that "delays start" is ambiguous it could mean that the delays are beginning (what I took umbrage at) or that the startup is delayed (a fair depiction). The first she primly informs reads delay as a noun and starts as a verb while the latter reads delays as a verb and starts as a noun. She's the grammarian. My best guess is that the misinterpretation is mine and the headline poorly written but not mean-spirited. Mea culpa. (She now leans over and insists I say that she brought in the paper and supplied the initial interpretation. True enough...but I wrote it up without noticing anything else. Partners. :-) )


Nick Istre said...

Sigh, this is unfortunate as I only wanted to get the Internet service. I can understand why delay the rest of the service because of contract issues with the TV side, but it would be awesome for me (and I would suspect some others) if I could get fiber Internet service "on time"...

Hopefully, LUS can get past this roadblock soon, or at least we can get more specifics.

John said...

Hi Nick,

Just a quick one as I am way behind in everything but especially comments right now.

I feel your pain. :-) While I want to at least try the whole package I am most interested in the data portion myself. I do think that the real reason they're not doing a partial roll-out is the (un)fair competition act. They can't afford months of low-income returns on the book. They have to start off with a full plate, especially with the video which will have to be the big money-maker for awhile.

State Legislators. Gotta love 'em.