Tuesday, December 27, 2011

Cox Raising Rates

The Advocate reports that Cox is raising its rates in the "Greater Louisiana" market on January 15th. That marketing region now includes both Lafayette and New Orleans and an email to the author of the article lead to confirmation that the rate hikes will apply in Lafayette. I'd been uncertain as to how expanding the Baton Rouge market to include Lafayette and then New Orleans would change Cox's pricing policies. For a good while during and after the fiber fight in '04 Cox left rates unchanged in Lafayette while raising them in the then-separate Baton Rouge and New Orleans markets. The consolidation apparently makes that just too embarrassing a policy to continue and Lafayette is no longer benefiting from lower list prices. (That does not mean, of course, that Cox has not continued to cut special deals with customers inside the city limits of Lafayette. Anyone who has dropped Cox for LUS Fiber can testify to the predatory pricing "deals" offered those who express an intent to move away from the national corporation for the local utility.)

Rates rising:

Cox Communication’s across the board video price increases include:
  • Cox TV Starter: Rising from $19.55 to $21.99.  (12.5%)
  • Cox TV Essential: Rising from $56.99 to $60.29. (5.8%)
  • Cox Advanced TV: Rising from $63.98 to $65.98. (3.0%)

Increase telephone rates by $1 per month 


Internet prices will also increase—but the Advocate article doesn't specify by how much. 


Why?
Why raise prices...or at least why raise prices now? On Cox's part the explanation is simple: higher costs. It rightly claims that prices have increased for big national networks like ESPN as well as retransmission fees for local network affiliates like KLFY. But that sort of blame shifting doesn't begin to explain the increases in either the telephone or the internet side of things in which costs are not increasing. It also looks like a pattern of raising prices the most on the cheapest tiers of video and telephone, and perhaps the internet as well—a pattern that is not well explained by the rising costs of national programming.


The Advocate reporter, gratifyingly, doesn't accept the corporation's explanation at face value and asks for a second opinion; this one from a consumer advocate: 

Mark Cooper, director of research for the Consumer Federation of America, said while cable companies’ costs have risen, the firms always increase their margins more than the costs themselves.
“It’s a down economy. They’re the only ones that get that much,” Cooper said. “Their costs didn’t go up four bucks a month. No way. I guarantee you their margins are going up.”

Raising prices in a down economy is a luxury that only a semi-monopolist like Cox can afford; in Lafayette they'll have some rare local competition whose lower prices will now look even more attractive.


Coordination?
The Baton Rouge Business reports that Cox is implementing a interface and HD channel upgrade. That's convenient timing. The new interface looks interesting. 

Sunday, December 18, 2011

LUS Bond Issue Approved, Interest Payment Starts

Ok, got behind on posting this bit of news; the Lafayette City-Parish Council approved the issuance of the last round of bonds the city voted for back in 2005—unanimously. The unanimity is a good sign for the future and indicates that at least the current nay-sayers have limits to just how much damage they are willing to inflict on a well-respected utility.

The only new news in the reports was to be found in the Advertiser's final paragraph:
LUS Fiber has made an interest payment for its $110 million bond issue. That payment was made on Oct. 18 in the amount of $2,747,165.64, according to Lafayette Consolidated Government Chief Financial Officer Lorrie Toups.
That's the first interest payment and as much a milestone in its own way as taking the final batch of bond  money.

You can check out the story in the Advocate and a version that went out over the AP wire as well.

LPF commenting policy upgraded

I'm increasingly impatient with Anonymity. Long-time readers will recall that I have long pushed commenters to leave real names and failing that to maintain a consistent pseudonym. During the active political battle that took place over fiber I tried to strike a balance, calling out the poor reasoning and highlighting the lack of confidence in their own arguments anonymous posters "enjoyed." I'd let a comment or two go by and then start pushing. I was able to push a number of opponents into posting using their own names and staking their own reputation. It helped a lot; comments were always more civil and useful on LPF than most other sites. I modified my own position more than once in response to responsible postings. Things have changed; there is no longer an ongoing political campaign and, probably even more importantly, the larger community of Lafayette media has seen the value of real identity commenting. It looks like our community has come around to the position long held on this site that real, useful discussion comes from having risking real reputations. KATC, the Advertiser, and the Independent had instituted real name policies. I think it has already improved the level of discourse. 

Consequently I'm upgrading my policy for comments. I expect real identities and will feel free to go beyond simply admonishing those that refuse to show that simple respect for the basis of real conversation. 
Two things are necessary to make a claim that would be worth spending time really thinking about and engaging in an honest discussion about: 1) A real person with a real reputation to dispute with. Until that happens I bear all the cost and the anonymous person is freeloading on the reputation I establish...I am through subsidizing unfair sniping.  2) REAL references with real links or at the very least references to title and where/how to get the materials that people vaguely reference. I almost never post a piece without traceable references on this blog and again I am no longer willing to subsidize the bad practices of others by allowing them to trade on the quality of referencing that this site has established. 

Notice is hereby served.

Sunday, December 04, 2011

Pssst ... Wanna Buy a Law? Lafayette and ALEC

What's Being Said Dept.

BusinessWeek LogoBloomberg Businessweek has an article up that features Lafayette's travails with the Local Government (un)Fair Competition Act as a the clearest example of how corporations can buy favorable legislation. In its article, Pssst ... Wanna Buy a Law? Businessweek traces the law back to its genesis in Utah and the American Legislative Exchange Council (ALEC) and through "Noble" Ellington the rural legislator who got a call from the cable companies and gutted his own rural broadband bill in order to insert the anti-Lafayette law. (Gutting an already existing proposal was necessary because the deadline had passed for submitting new bills.)

ALEC – American Legislative Exchange Council
The initial pages briefly recount the story of the (un)Fair Act nicely with new interviews with both Joey Durel and Terry Huval and it's worth the read for that part alone. But Lafayette serves as a human interest framing for the larger story of how ALEC operates. ALEC has appeared on these pages before. ALEC is an engine that produces ready-to-file legislation that pretty uniformly reflect the desires of the corporations that sponsors that provide the vast majority of its finances. State legislators are paired with lobbyists and executives to produce "good" laws that govern their industries. The corporations generously provide expertise, study "academies," and short issue analyses. It is through this mechanism that Louisiana got its anti-Lafayette law; a law that is extremely similar to laws introduced and passed in a number of other states—most recently, as the story notes, in North Carolina where its local adopters didn't even bother to change the name. From the article:
None of this is illegal. And it’s effective. It allows companies to work directly with legislators from many states, rather than having to lobby in each state individually to get language into a bill. ALEC says its mission is to help state legislators collaborate around the Jeffersonian principles of free markets, limited government, federalism, and individual liberty. It does this, and something else, too. It offers companies substantial benefits that seem to have little to do with ideology. Corporations drop bills off at one end, and they come out the other, stamped with the imprimatur of a nonprofit, “nonpartisan” group of state legislators. Among other things, ALEC is a bill laundry.
Ellington, the legislator who sponsored the law in Louisiana, was at one time proud enough of his work to he to fly out to Seattle, Washington to discuss the ALEC bill he sponsored to block Lafayette's project on July 30th 2004—with a representative from Cox Communications. The story closes by returning to Louisiana and follows up on the subsequent history:
Noble Ellington hasn’t followed what became of his bill. “I just hope we fixed it,” he says, “so private industry and the city and parish were satisfied with what we did.” Terry Huval and Joey Durel both travel around the country now, talking to other small towns about how to get wired. Durel believes it’s going to get worse before it gets better. Huval is working with towns in nearby states but won’t say where. When a plan goes public, he explains, a bill—that bill—is not far behind. ALEC’s model bill on municipal broadband works because the idea of a city providing Internet access is alien to even most lawmakers. If a bill shows up at the right time, in response to one or two cities, it smothers an idea that hasn’t yet gathered many defenders. “I tell people this is not for the faint of heart,” says Huval. “If you don’t have the drive, don’t even start.”

Saturday, December 03, 2011

LUS Fiber Seeks to Complete Bond Sales

CouncilThe Advocate reports that LUS Fiber is going before the City-Parish Council Tuesday evening seeking final approval to bond out the remaining $14.5 million of the bonds of the $125 million the voters approved back in 2005. Articles in the Advocate and the Advertiser report parallel stories. The tale boils down to Huval explaining that the new utility is paying its operating expenses but isn't yet generating enough income to comfortably pay its ongoing debt service to the bondholders while at the same time acquiring new customers.

That's going to seem counter-intuitive to some; after all, new customers is supposed to be what every growing business needs, right? Yes, but there's the long run and the short run—and laws and regulations that simply stink. We need to dig a little deeper to even begin to understand what is going on here.

Customer acquisition costs
Here's a term to store away: "customer acquisition costs." It's an update on the old saw: "It takes money to make money." In the world of telecommunications networks this is particularly true; it takes a lot of money to make money. The biggest chunk comes from simply paying to build the network; but even then there will be a continuing capital cost for paying to supply each user with their own fiber link, putting an expensive Optical Network Terminal on each house to support video, voice, a IP translation onto copper wiring, bringing wiring into the house, and to set most users with an nifty light-weight computer in the form of a set-top box. That part of the "start-up cost" is taken each time a customer signs up. Estimates for the cost of supplying a household after "passing" them with the basic network are variable but start at 650 dollars per customer and range up from there to figures like a 1000 dollars.

It will typically take years to payback that extra cost; it's a great (and absolutely necessary) investment since you're not going to make money in the long run unless you have plenty of customers but each customer you pick up means years of short-term debt load. It's worth noticing that all of LUS Fiber's competitors long ago paid off all these costs. It's a testament to the basic business plan that the community utility is able to offer generally better services to the city at a lower cost than the private competition.

Still, why not go ahead and take out the whole amount that the citizens authorized? Why take some early and then take more later? Doesn't that just sound bad—like LUS didn't anticipate the need?

The economy, smart business and lousy politics
It's perfectly possible, and even probable that LUS didn't anticipate the need: the long legal delays imposed by the incumbents lawsuits skewed their initial estimates and nobody anticipated the Wall Street crash and subsequent financial chaos and recession. Cable lost a record number of subscribers this year largely as a consequence of that recession according to analysts. Not the best market in which to begin a new network.

But there are also some smart business reasons to not put all of your financial eggs in one basket of borrowing. First, and most obviously, it's a good practice not to borrow money before you really need it—you just end up having to pay interest for a longer period of time so it is cheaper to space borrowing. But there are also federal regulations to take into account. According to the Advertiser's interview with Huval the IRS wants to be reassured that municipal bonds are actually being spent on building what they are supposed to build—in this case a fiber-optic utility—and they want to see the product that the bonded indebtedness is meant to build built within about three years or the issuer faces penalties. (Presumably this is meant to prevent using tax-exempt bonds to "arbitrage" or leverage the purchase of taxable but higher-yielding investments thereby defeating the purpose of having tax-exemptions for municipalities to build basic infrastructure instead of using the piles of money to invest in the open market.) But a fiber-optic network has a longer period of capitalization than your typical road or damn construction; as already noted each brand-new customer imposes a large acquisition cost. So it makes smart business sense to split out some of that downstream capitalization and only use it when it becomes necessary; you get an additional three years of capitalization for the investments you have to make in bringing late-adopters online.

So while it might be lousy politics to go back to the well, it can be smart business.


(Note: The Advertiser has their article running in the print edition but it's not appearing online yet...look for an update here when the on lie copy appears. —Here you go.)

Wednesday, November 16, 2011

'Nother Local Boy Makes Good...

Crawford Comeaux, local computer jock and a project manager with FiberCorps went to Baton Rouge and came back with the prize. The Advocate story is well worth the read; it outlines the concept behind Startup Weekend held last weekend in the capital city. From the story:
AudienceAmp, a mobile platform for real-time audience participation with post-event analysis and reporting, took first place and will participate in the Global Startup Battle.
It is a competition that throws together all of the Startup Weekend winners from the 2011 Global Entrepreneur Week events. 
“We believe we can have a working prototype in a few days,” said Crawford Comeaux, 29, the leader behind AudienceAmp. 
Comeaux is a project manager with FiberCorps, a Lafayette nonprofit aimed at growing digital economic development in Acadiana. Comeaux and his team also will be given a spot in TechParkU, an entree of business mentoring, education and other services from the Louisiana Technology Park on Florida Boulevard.
Update 12/4/11: The Advertiser has run down the story. A nice write up.

Cox Exits Wireless, New Possibility for Lafayette with Sprint?

Cox has completely pulled out the wireless game stranding its investment in spectrum and throwing into doubt the particulars of a grand reorganization it recently announced.

This finally kills a constantly shrinking commitment by Cox to wireless. It means there will not be a wireless play by Cox in Lafayette to put up against the deal that LUS Fiber has put together with Sprint.

A wireless play by LUS Fiber is still a necessity. But Cox's withdrawal and AT&T's structural weakness means that LUS' play is much clearer—and cleaner. With Cox out of the way Sprint is no longer tied to an implacable opponent of our local network. Sprint has long been the most obvious choice for a cellular partnership with LUS Fiber. Sprint is committed to advanced technology, focused on data rather than voice as compared to its larger brethren, is the small, "different" telco that is struggling to break out of its also-ran status.

But I recently engaged in a long bit of speculation about the wide range of possibilities wired and wireless for potential Sprint-LUS Fiber and won't go back into all that now.

But since I took a look at the possibilities a new one has appeared. Bandwidth.com, a major provider of VOIP services to folks like Skype, has launched its own user-facing company using the Sprint network. It's called Republic Wireless and it's hope is to disrupt the cellular industry. (Which could use some serious disruption!) Republic wants to flip your phone from being cellular-centric to being WiFi-centric. That's something many of us have already achieved — I know the vast majority of the times I use my phone its for data, and the vast majority of those times are when I am at home or at another location where I've got it switched onto a local hotspot. AT&T's 3G is a "good enough" service. But whenever I have the opportunity I switch to WiFi. The big exception to data-centricity is phone calls which are always routed over AT&Ts network. Republic is going to change that making WiFi instead of Cellular the default. You'll use WiFi for everything anytime it is available only grudgingly switching over to cellular's capped, slow networks when you have to.

And you get their service for $19 a month. Data and Voice.

Sure there are caveats. There's a cap on how much cellular you can use (that replaces the current cap cellular providers now place on data connections). And not all phones are set up to favor WiFi in that way. But that's not a big technical hurdle and I have to think that most phones could deal well with this...it's a system level, software-malleable sort of thing. It's even been done before. T-Mobile's UMA-based Home Zone products preferred WiFi too. The problem isn't technology. The problem is that cellular corporations have control of the market. But Sprint and Republic Wireless may be about to change that assumption.

For Lafayette the possibility opens up of following through on long-delayed plans to build a wireless network. Such wireless networks have dramatically cut local government's telecomm bills in other locales and LUS Fiber provides the ubiquitous fiber-huge backhaul down every street that makes the engineering much less technical. It would be easy, very easy, to design a system that pushed 50 megs of bandwidth off our electrical poles. With that kind of bandwidth delicacy in design can go away...and with that kind of network a partnership with Republic or Broadband.com would mean that those of us living and working in the city would only tap into the Sprint cellular network when we travel. All for 20 bucks a month. Or less...

There'd be huge savings involved for the citizens. And damned good ones of the City-Parish government as well. We ought to be looking into it.

Tuesday, November 15, 2011

Local Boy Makes Good: LUS Fiber/Skyscraper Partner

LUS Fiber and Skyscraper Data Solutions announced a nifty new freebie, iOBackp—with a great backstory—for LUS Fiber customers. Both LUS business and residential users will get 10 GB of free, offsite, encrypted backup.

The Freebie:
Like the recently announced Sprint deal it is basically a marketing trade: LUS gets a nice perk for its customers (and only its customers) and the company get a local marketing boost. No money changes hands between the two companies. Backup is one of those crucial things that folks seldom actually do. And when they do backup, they don't backup often enough. And even if they've set up a good, consistent system they don't backup offsite—and that is a crucial. Skyscraper is offering to do it all—and encrypt it to industrial standards. So this offer is a large real benefit and everyone for whom it is available really ought to take advantage of it. It can be scheduled to run during downtimes and looks pretty slick on the video. The biggest benefit will go to small business users who, if they restrict their usage to documents, can almost certainly keep their recent backups online and offsite. It's small businesses for whom that transient electrical spike can be a real disaster if it hits right before the billing cycle. Those guys ought to run, not walk, to take Skyscraper up on this. But residential users, at least those on Windows, ought to take 'em up on it as well. They may not have the dollars at stake but pictures of the kid's 3rd birthday party can be pretty priceless.

The Great Backstory:
Part of what is great about this deal is that it wraps up a lot of hopes for out municipal network into one neat package. Lafayette wanted to have a network with features that would enable great new business plans to be tried out. It wanted to keep our kids here and to draw those who had left back home. It wanted real benefits to come early and first to Lafayette. This nifty marketing deal hits all those buttons and should bring a smile to the faces of local citizens.

The principle in the new business is one Scott Eric Olivier and he's got a his own grand backstory: born and raised in Lafayette, gets into the music business, travels, gets techy, starts a small cloud-based business to protect audio assets post 9-11, works with Michael Jackson, quits touring to work on his businesses, moves back home to Lafayette, and shows up at a press one fine noontide as the CEO of a locally owned business partnering with LUS Fiber to provide advanced backup and storage to the community. At that press conference he says that it's the fiber network, and the 100 megs of intranet bandwidth that make his new business possible. Without that kind of upload capacity backing up 10 gigs of storage could take all night. So Lafayette gets the return of a native son, a nifty new business that is only really practical on our 100 meg intranet, and a nice nifty new freebie the likes of which are not available, for any price, in other places.

Hard to say that's not a win-win-win.

The Downside
Of course there's a downside. There's always a downside. In this case its that devotes of Mac and Linux operating systems are sadly left out in the cold. The website's FAQ  makes it clear that they are not supporting those operating systems. In a quick chat after the press conference Olivier said that he was well aware of the demand—and in fact had a Mac on his own desktop—but that he just couldn't make developing that client a priority for a business-oriened service. He is intimately aware that the audio and visual businesses where he got his start are Mac-heavy; in fact his original backup business, Laptop Roadie, there is a full client for Macs and Linux fanboys. Olivier, unsurprisingly, recommends that. But it's not free, and its not locally hosted...the two killer features of his enterprise product iOBackup. I think he ought to just make that service available if he's gonna tease us with an Appleish leading lower-case "i"...but then I'm clearly just a jealous Mac user.

Lagniappe: As an extra, scan down to the bottom of Olivier's online bio...it sounds as if he's doing a bunch of interesting things in Lafayette with his various businesses.

And:

Saturday, November 05, 2011

Net Neutrality Returns—Let Landrieu know (Updated-again!)

http://www.91mobiles.com/articles/wp-content/uploads/2010/12/network_neutrality.jpgNet Neutrality (remember net neutrality?) has returned and the first shot of the latest battle is about to be fired in the Senate. And it would be nice if at least one of our Senators would stand up for the internet. The only real possibility is, sadly, Mary Landrieu. Right now no one seems to know where she stands. She needs to hear from those that care about the internet. And there is an easy way to do that.

The Situation:
First the good news: The FCC has actually promulgated rules to protect basic net neutrality. (No one is really happy with them, but they are a start.) The Washington Post has a nice, short explanation:
The rules would prevent Internet service providers from blocking Web sites and applications on Internet lines feeding into U.S. homes. Those carriers -- such as Comcast and AT&T -- could not deliberately slow down one Web site over another. The rules frown on the practice of charging Web sites for better or faster delivery, but observers say that practice would not be strictly prohibited.
Wireless networks would not be covered as broadly by the rules. An FCC official said carriers such as Verizon Wireless and Sprint Nextel would be prohibited from blocking competing voice and videoconferencing applications. Any other practices would have to be disclosed by the carriers.

Lawsuits are in the air from both sides of the net neutrality debate with the opponents calling the idea regulatory overreach and the proponents saying they are completely inadequate.

But whatever you think of the current rules the latest gambit is dangerous and deserves to be vigorously opposed.

Dangerous Times
The anti net neutrality crowd in Congress (mostly Republicans—this too has gotten caught up in blind ideology regardless of net neutrality having an astonishingly broad backing among conservatives) has decided on a dangerous course. They are working a seldom-used gambit from the Congressional Review Act that allows them to bypass the usual checks and balances of Congress and push a "resolution of disapproval" through. Such a resolution would block even the weak proposed network neutrality rules. The White House has promised to veto any resolution and overriding such a veto in the Senate would be very difficult. But this is only the beginning of this latest round of grandstanding.

Let's let Mary Landrieu know where she needs to stand. You might want to remind her that Louisiana is already pretty disappointed in the sort of "corporations are always right" ideology caused the state to lose an already approved 80 million dollar grant to build a new fiber optic network to serve the state's poorest parishes. She needs to know that she's got support to push back against that sort of nonsense.


The easy way: Save the Internet Petition
Write directly as a constituent: Contact Senator Landrieu
The most effective way: Call Mary's office and talk to a staffer


Update: Broadband Reports shows us exactly what leaving wireless out of net neutrality leads to: an enormous incentive to make sure that your network is not really capable of carrying the traffic you've sold: Verizon has just announced, breathlessly, as if it were a good thing that it will let each user who has already paid for their bandwidth tier to pay for a "Turbo boost" each time the network is too congested to deliver decent service. This is a good thing? To pay them again each time the network fails you? Really?

I'm astonished that it is legal. Why should Verizon ever bother to make their network capable enough to consistently offer the bandwidth that they've sold? They can make lots more by nickel and dimeing everyone whose Skype can't be understood or whose video conference starts to break up. (Of course, they could just pay a lot more for the carrier's specialized version of these products...so either way, they win, you loose.)

If Landrieu and other Senators can be convinced to spike this latest attempt to hand the wrieline internet over to the corporations at least Cox (and Comcast and Time-Warner and other wireline providers) won't be able to do the same.

At least that's not going to happen here in Lafayette—at least not if you're using LUS Fiber. First, I can call the head of the company and talk to him: he's just not going to abuse his customers since they "know where he lives." (And he doesn't live in a gated community!) Second, the fiber network is generously over-provisioned: I've never experienced the sort of regular slowdowns I had with Cox when the kids got off the bus. Come to think of it maybe the second is due to the first? You think?

Update #2: 11/10/11
Mary Landrieu did us proud. You can post a note of thanks at her website.

Saturday, October 29, 2011

Louisiana's Lost Broadband Grant: Legislators Complain; Questions Raised


Hat's off to Michelle Millhollon, on the Advocate's legislative beat, who has an exemplary article up today on the loss of the delta region's $80 million broadband grant. She's got the story almost exactly right, something rare in so arcane a topic. It still pays to have real beat reporters.

Francis Thompson, Delhi
She lays out the national political backdrop succinctly and accurately, moving on to State Senator Francis Thompson's anguished pleas for an appeal. Thompson's from Delhi, deep in the heart of Louisiana's most impoverished rural area and his distress, and the distress of his constituents is understandable.

Here's the heart of the story:
Initially, the Board of Regents oversaw the project. The state Division of Administration, which handles the daily operations of state government, later took control and modified the project.

U.S. Sen. Mary Landrieu, D-La., said earlier this week that the state requested alterations without demonstrating that the project could be finished on time and achieve the goals of the original application.
She accused state government of fumbling the ball.
Rainwater told members of the Louisiana Joint Legislative Committee on the Budget on Friday that the Board of Regents' initial approach to the project would have pitted the public sector against the private sector by focusing too much on government involvement.

That's what you need to know: Jindal's Division of Administration under Rainwater took control of the grant process, submitted new plans which violated the terms of the grant, and when challenged, responded by point blank telling first the feds and then the state's legislators that nothing that didn't protect certain business interests was acceptable to the Jindal administration.

¿¿¿¿The Question????
The unanswered question here is: Just whose business interests were at stake and why did their influence warrant sabotaging a plan that had previously passed state muster and had then won a highly competitive grant process at the national level?


Ed Antie's
Board of Regent's Portrait
Mullhollon was surely part of the team that followed the controversy around Jindal's Board of Regent's appointee and telecommunications businessman Ed Antie. (Yes, the same Board of Regent's whose grant project was later reshaped by Rainwater.)  Antie's performance in his confirmation hearing was so shot through with denials of and contradictions about a $531,000 dollar contract one of  his businesses had leasing fiber optics to the Board of Regent's LONI research network that he withdrew his name. But the unusually sharp questioning in that hearing followed and was inspired by his lobbying his new colleagues on the board and the state's education commissioner in the interval between his appointment and his confirmation hearings:
Records submitted to the committee reveal that Antie took an active interest in telecommunications issues during his short time on the board, frequently emailing fellow board members and Higher Education Commissioner Jim Purcell about LONI and urging more involvement by the private sector.
Now this degree of open self-dealing is unacceptable by even Louisiana's famously lax standards. But there's more: even if some members of the Board of Regents were uncomfortable with Antie's antics the board as a whole had come under critical scrutiny. WAFB reported that eight of the nine members Jindal appointed to the Board of Regents donated to his campaign, many within weeks of being appointed. As it turns out Antie had donated $3,000 dollars to Jindal's reelection coffers. But, even sweeter, executives in various businesses associated with his fiber leases to the Board's LONI network had contributed another $16,000 dollars.

It all stinks.

And that's before we even bring up partisan politics and Mary Landrieu's role in securing the grant, the Jindal administration's ragged record on privatization ranging from the prisons to the Office of Group Benefits, or the naked ideology visible in the recent failure to complete application for a $60 million dollars in "race to the top" money for Louisiana's award-winning early childhood programs.

It all stinks.

—Stay tuned; more details and a fuller exploration to come.

Monday, October 17, 2011

"LUS Fiber, Sprint announce partnership" (Updated)

The Advertiser carries a short wrap-up of this morning's Sprint-LUS Fiber event. Turns out it's mostly a marketing—and more subtly, a defensive—move. (My speculations—and a day of intensely pondering and researching the history and technology strategies—turned out to produce a lot of hooey. At least this time. C'est la vie.)

It's not a bad marketing scheme for Lafayette—all Sprint customers, not only new users, get a 10% cut in their Sprint bill if they are LUS customers. Business customers also get waived activation fees for their employees, discounts on upgrades, and a 20% discount on accessories if bought at the time of activation. Over the course of a year a 10% discount can add up...the average US cellular bill seems to be about 600 dollars a year. While the regular joe residential figure, is nice (and I know one guy who just cracked his phones casing who says he's planning to take advantage of it when he gets his new iPhone 4s) it probably isn't where LUS sees its greatest upside. The dollar figure for businesses can add up rapidly—and LUS has been having already been having unplanned-for success in the business sector. Back in August G4S started "to provide network deployment and customer fulfillment services" For LUS Fiber. The company is focused on the business market and this sort of deal can get a foot in the door at businesses. It's easy enough to imagine the sales pitch that would feature going with a superior local network and getting a nice break on your nation-wide cell service.

In the longer run the payoff is likely two-fold. First partnering up with Sprint opens up a dialog with a company that, among other things, both provides long-haul fiber but needs local backhaul. Lafayette is ideally situated to provide local backhaul but needs long-haul connections. There's a nice symmetry there that growing a little trust could help develop. And then there are those other possibilities...

The second long-term consideration, the defensive move, however, is really nice. Cox, we all know, is eventually coming with its relabled Sprint service—it's already launched that addition to its triple play in markets across the country. At one point Cox was geared up to launch its own independent network using (expensive) spectrum it bought at  Federal auction that would be synched tightly to its cable offerings and form a basis for a Cox "third screen" strategy. That's fallen through and a much less ambitious plan to resell Sprint service is what now being offered in limited areas. When Cox gets to Lafayette with that service they'll not have a clear field where they are offering something that the local competition can't match. LUS can, correctly, say that they are getting you a deal on the full range of Sprint services and all the nifty new devices Sprint has in its portfolio while Cox is offering some white-label subset of the the full Sprint network.

Not a bad move.

Update, 10:30, 10/18/11
The Advertiser, the Advocate and KATC have stories this morning on yesterday's Sprint-LUS Fiber announcement. KATC reports that Sprint credits the unique deal to the community's FTTH project:
According to Lori-Anne Hill, Director-Federal & Public Sector Sales for Sprint, this relationship is the first of its kind for Sprint -- partnering with a utility to offer wireless services at a discount. Sprint's decision to partner with LUS Fiber stems largely from the city of Lafayette's impressive Fiber-To-The-Home-and-Business infrastructure and the city's foresight to bring that technology to the city.
If you only have time for one I'd recommend the Advertiser version. The reporter  apparently spent some time talking to LUS' Terry Huval and some bits of the history leading up to the agreement—including the information that Sprint approached LUS Fiber with the deal and is taken with the gumption implied by building our building our own fiber network. Companies like Sprint, who are laboring to extend their own fiber-optic  backbone, understand the start-up expense involved and the long-range vision that implies. That story concludes with a tantalizing hint of future benefits:
This pact with LUS Fiber also extends Sprint's reach directly to LUS Fiber's valued customers and it opens the door to other mutually beneficial business opportunities for Sprint and LUS."

Huval agreed, saying that LUS Fiber and Sprint already are talking about other possible ways to benefit customers of both services.

"We have some ideas, but nothing we can state publicly right now," he said. "But this does give us a platform to move forward in the future."
Hmmnn.

Sunday, October 16, 2011

LUS & Sprint Teaser...

LUS Fiber and Sprint —"There's something happening here. What it is ain't exactly clear." (With apologies to Buffalo Springfield)
"LUS Fiber and Sprint representatives will make a major announcement concerning the development of a unique partnership."
"LUS Fiber makes ground-breaking strides toward delivering upon its mission of creating tomorrow’s essential broadband infrastructure while advancing today’s telecommunications services."
That's from an LUS Fiber PR teaser; I'd read it as being an embargoed invite to reporters but the Advertiser apparently judges otherwise...and, I admit, the story makes a damn good mystery and something to idly speculate about over the Festivals Acadiens et Creoles weekend.

So what's up with that? What could the nation's third largest cellular network being doing with LUS Fiber that would be "unique" and "ground-breaking?" Now right up front let me say I don't know. And I'll be eager to attend the Monday event to find out. But in the interim we can wonder and even hope a little.

Some (skippable) background on Sprint...National & Local
Sprint has interesting issues: Sprint may be a huge company but it definitely is not in the same league with sector leaders Verizon and AT&T. Those corporations—with 106 and 99 million subscribers respectively—far outpace Sprint's 52 million. T-Mobile is the only other national carrier these days and AT&T is engaged in a concerted effort to buy its perhaps 31 million subscribers. Should that buyout succeed it would leave Sprint in a distant third place at the back of the pack—and falling further behind each quarter. The company's troubles can be traced in part to an attempt to incorporate Nextel, an attempt which ended badly with Sprint unable to absorb either the very different technical network or the Nextel's very different community of users. Sprint tried to break back into the top tier with an abortive stab at building an advanced network based on WiMax but has recently abandoned that effort and restructured its 4G effort around the LTE standard already endorsed by AT&T and Verizon. Most recently Sprint made a splash when the Apple iPhone 4S launched added it as the third US carrier to resell the popular phone. But the cost of the iphone deal, combined with a solid commitment to actually investing in an accelerated LTE buildout has lead to a precipitous drop in the stock and threats to the continued reign of the CEO.

Take-away: Sprint is a huge company with enormous resources that has demonstrated both a need for and a willingness to take unconventional risks. Some of those unconventional positions reflect its ability and willingness to break with its larger wireless brethren. It took itself out of the landline business, so unlike Verizon or AT&T it does not have a "bastion" in one area of the country where it is the clearly the dominant phone company—and it does not have any area in which it has a deep penetration copper/wired network to feed its wireless towers cheaply. Also, Sprint has also been much more willing to resell its network to what are known as MVNOs — companies which use its network and resell a rebranded service possibly because there is no region of the country in which it it would be giving away the ability to "rob" its own landlines without creating a corresponding benefit to its wireless division.

Sprint & Cox: All that might suggest that if any of the cell phone companies might be willing to partnership with the definitely small and "unconventional" LUS it would be Sprint. But, and it's a big but: Sprint's biggest MVNO appears to be Cox Communications. This is a long-standing association which reaches back five years to a time when a partnership of the largest cable companies had reached a deal to converge technologies in the wireless space with an eye toward developing handsets as targets for video. The vision that animated that partnership faltered and Cox was the first big defection. It declared that it was building its own national cellular wireless network, was going to use LTE, and proceeded to invest in expensive spectrum (including significant spectrum in an arc between Lafayette, through Baton Rouge and into New Orleans). Lafayette's partisans have always thought Sprint our best hope for a wireless partner to give a local fiber fueled wireless network national reach.

Sprint's North American Backbone
(click to enlarge)
Sprint & LUS: While it's true that Sprint's alliance with cable companies has always seemed to stand in the way of an partnership with Lafayette it is also true that Sprint has shown LUS Fiber some sympathy—Sprint's fancy Fiber-Optic promotional van appeared 3 times in Lafayette during the referendum fight and served to introduce local citizens to the idea and to serve notice that a major national corporation took fiber-optics seriously. Sprint is also a Tier 1 internet backbone provider (meaning it is a major player) and has fiber backbone assets that run through Lafayette.)

Soooo......
Where does all that get us? A lot of possibilities.
  • The most obvious, and most interesting is some sort of wireless play. But even that has ranges of possibility. 
    • In one scenario LUS becomes an MVNO, offers Sprint service under its own label complete with national roaming. Lafayette gets out in front of the coming "quadruple play" and offers its customers Video, Wired Internet, Phone, and now Cellular telecomm services. (LUS building its own WiFi data network has been in the plans since the beginning—Quintuple play anyone?) Sprint gets a poster boy for a marketing move that leverages local providers' good will to take its MVNO offerings to new markets. (About LUS getting access to Sprint's new iPhone 4S: I refuse to get my hopes up.)
    • Down another dimension Sprint agrees to supply or use a WiFi network or a series of WiFi hotspots. AT&T and Verizon both have programs in place to use localized WiFi networks to reduce congestion on its networks (especially in "small" high traffic areas like hospitals, malls, and stadiums). Sprint has announced its intention to join them, and reveal the plan in 4th quarter (this quarter) of this year. The questions here would be how extensive it would be and what would be LUS' role. 
      • On the most ambitious end Sprint and LUS launch a city-wide wifi network with Sprint getting some sort of exclusive deal to use it to offload voice and data traffic. That would give Sprint an enormously powerful local network, far outpacing any others and would give Lafayette a ubiquitous wireless network any citizen-customer could use.
      • At the least ambitious end Sprint announces a series of hotspots, centering on the downtown area and large event venues using LUS Fiber for backhaul.
    • Or some combination of the above...
  • But various permutations of a wireless play don't exhaust the realm of possibility...Sprint has a powerful wired network too — and, even more than the other carriers, a noticeable lack of easy backhaul to supply its ubiquitous cell towers.
    •  LUS Fiber could be providing that backhaul in Lafayette Parish in a comprehensive move that leverages the wholesale fiber network to provide Sprint with munificent backhaul that would make 4G's new bandwidth demands easy to supply. A smaller move in this direction would entail only using the dense city network. In such scenarios Lafayette gets Sprint 4G wireless early. 
    • Or LUS Fiber could be using Sprint's Tier 1 network for backhaul at a substantial savings.
      •  One permutation would have LUS Fiber switching from satellite download of its video feeds to using Sprint's backhaul to tap into extremely high-quality feeds that travel over fiber. 
    • Or some combination of the above....
  • Or some other wild idea or combination...ideas?
Looking forward to Monday.

Friday, October 14, 2011