Wednesday, April 29, 2009

"Occupational Hazard"

I'm not sure what the title, "Occupational Hazard," to this IND story is supposed to refer to other than the fact that sensationalized media stories are a mainstay and thus it's an "occupational hazard" for public efforts to receive breathless coverage. (I've complained about this with the Advertiser before. And, when deserved, occasionally praised a media outlet.)

The story is that LUS rented a storefront a little more than a year ago and hasn't moved into it. LUS has paid up front for the year we are in and so the Independent chooses to report the grand total for the first two years as the cost "to date." It will be the same figure in December of this year. In fact it's hard to figure out why this is a story now. The contract was approved in a public meeting of the city council and all the details have bee available for more than a year.

The gist of the story is interesting:
As the launch date neared for the fiber project, LUS re-evaluated its plans, opting to locate its initial fiber-to-the-home customer service center alongside its utilities office at City Hall. This bought time to plan for a more cost-effective way to utilize the storefront on Pinhook Road.

LUS now plans to provide customer service for both its fiber business and its utilities business out of the Pinhook space. A call center will handle customers over the phone, while other reps will be standing by to service walk-in customers. In addition, Huval says the store will double as a floor room for LUS fiber, with computers and widescreen TVs showcasing LUS’ cable and high-speed Internet service. “We’ll have the facilities necessary for customers to be able to actually test the system,” Huval says. He now hopes to open the center this fall
That LUS hasn't done much with the location is strange—and Huval's explaination that they felt that they had to snatch up a good property when it came available is surely part of what's going on. —My extended family owns a fair amount of commercial rental property around town and it is quite true that prime space was extremely tight. On that score LUS might wish it'd waited. Of course, waiting would have been betting on the sort of commercial rental market collapse that still hasn't taken place even in the wake of the huge financial mess that unexpectedly came down on the country. It's hard to see how LUS should be blamed for not being more preseient than the financial hig-flyers on Wall Street who had the whole country convinced that the good times would never end.

Another part of the explaination appears to be a change in plans—the initial idea was apparently to open a full-blown LUSFiber-only customer service center in the Pinhook location when the project launched. But, according to the story, they decided instead to house the service center with the other utiltity services at the existing location at City Hall during the early months of the expansion and follow up with a multipurpose, mulitutility store at Pinhook & Kaliste Saloom. That, at least in part, was motivated by a getting a larger than expected estimate for remodeling the location. (That was during the post-Katrina construction boomlet and the headend facility was caught in the cost jump. —LUS scaled back its plans then as well in order to stay within budget.)

The most interesting "explanation" for the long-dormant rental is one that the story itself doesn't mention: that LUS at one point hoped that a retail "showoff" store would be useful earlier than it now judges it will. This joins the list of things LUS is not doing to promote the fiber. LUS is very noticeably not marketing LUSFiber products. It is available in some areas that have not gotten so much as a notice in the mail that you can buy — much less local sales persons or media advertising. (Some eager people have called in spite of being warned not to call until their mailer showed up and found that they could, in fact, purchase service.) This is the "controlled rollout" that you hear so much about. As long as LUS is in shake-out mode they don't want the raft of new customers that a retail store is designed to draw and are apparently making the judgment that opening such a store prior to that promotional stage would be a waste of money and energy. I'm sure they didn't initially think they were renting space for use a 16 months out. But having done so the subsequent decisions appear to be financially conservative rather than extravagant.

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