Saturday, July 25, 2009

WBS: Lafayette Becoming Most Wired Community in America

What's Being Said Dept.

Geoff Daily over at his blog AppRising has posted "Lafayette Becoming Most Wired Community in America." He touts LUS' speed, price, and our access to a 100 mpbs intranet (and bemoans the price he has to pay for his 10/2 connection — more than I pay for a 50/50). But that's pretty much old hat, the heart of his story lies in a remark that was made at his CampFiber event last week. A Cox rep attending* said that AT&T was planning on bringing U-verse to Lafayette. Add that to Cox launching their very first 5o mbps docsis 3 service here (at a unique discount I might add) and you end up with Geoff's headline. If AT&T does launch U-verse we could at least try to lay claim to the title. Pretty impressive results for our little city which, however much we may love it, has to be seen as a backwater worth ignoring by the big guys...except for the fact that we own our own local fiber utility. Something they do not want to succeed and become examples to other towns that don't care for backwater status. I'm not sure that giving Lafayette the best of everything is the way to make that point but I'm happy enough with the result.

U-verse, as you may be aware, is AT&T's attempt at a "next-generation" network. It's a fiber to the node (FTTN) sort of architecture which involve pushing fiber optics deeper into the network so as to enable a cable-style video experience and higher speeds over the old phone twisted pair copper. The key metric for Lafayette users is that its internet tops out at a laughable 18/1.5 mbps; nowhere near the Lafayette standard of 50 mbps. Of course that's a real step up for AT&T whose physical plant is aging badly but it doesn't hold a candle to the old BellSouth's VDSL-2 plans which had promised 80 mbps down before they sold out to AT&T.

Supposing that AT&T is coming to Lafayette the most interesting question by far is just where. A big chess game with hidden pieces is emerging in Lafayette. LUS is, so far, is only in the city proper. Cox is parish-wide in its available footprint; presumably at least partly to stymie any LUS expansion. AT&T, unlike Cox, is actually available everywhere in the parish. Will it offer the service to the whole parish? Just to Lafayette? Just to Lafayette and the more densely settled towns and newer subdivisions? It makes a lot of difference in the game being played out here for mind share, market share, and profits. If the point is to try and reduce LUS' marketshare in video by providing a third wireline provider then they'll go only to the city and accept that the Lafayette unit will never have the marketshare in a three-cornered market to be remotely as profitable as spending the same money elsewhere. If they want to find a local footing in our regional market where their network is literally 3rd-rate they'll provide their premiere service in the rural areas where Cox and LUS will experience the most difficulty in providing their products. What folks in the region need to realize is that LUS is setting the pace here—and they are benefiting. Normally three providers do not provide real competition on price. Modern corporations will try just about any trick to avoid lowering their profit margins and what is happening across the country where Verizon and AT&T are competing with the cablecos is differentiation of product (speed, bursts, integration, etc.) and an exploitation of the areas in which they do not compete on a block by block basis. (Verizon, in fact, recently raised its FIOS rates.) Cox has lowered its top rate in Lafayette because, and only because, they are faced with a differently motivated competitor who does not want to maximize the profits it extracts from the community. LUS' 20% cheaper policy forces a price cut by giving one. Other parts of the country, like northern Virgina where Cox launched its second 50 mbps service, are not getting cheaper prices.

Frankly, I don't see the business case for AT&T in Lafayette or the parish....so I'm still not convinced that U-verse is coming. I have, from multiple people, heard that an upgrade in the local network has been underway but the Cox guy is the first that I've hear claim U-verse was in the offing anytime soon. He said that it was in fact overdue and that the original schedule had said that it should have already been launched. I've no doubt that network upgrades are underway and have been for some time. But whether they are being done to simply shore up the current network and make Lafayette's plethora of iPhones work a little better or as prep for an immenient U-verse launch hasn't been made clear to my jaundiced eye. I'd love to be told differently. What eagle-eyed readers want to do is look for the tell-tale DSLAM installations. They've excited a lot of trouble with local communities in some places where they are considered huge eyesores. If you see a batch of these big new boxes somewhere let me know.

So...Lafayette may be in line for the nation's most wired; at least in the sense of having multiple, cheap, top-of-their class options available for less.


*Yup, the event was well attended by Cox and AT&T reps, who were mostly extremely reluctant to admit the fact. Fiberina pushed 'em on it. Good for her. :-)

PS...AT&T's big advantage is wireless. If they show up here with a better wireline side sometime soon then expect them to find ways to bundle wireless to give them some sort of lever with local customers. But the wireless side isn't a clear long-term win either. Both LUS and Cox are on record as intending to supply a wireless network. Wireless is a big deal in this three-sided chess game. Expect more on that when I get a little time to write it up.

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