Saturday, April 07, 2012

Gigabit News: Roundup—Causes, Cox, AT&T, and Durel

What's Being Said Dept. 

The news that LUS Fiber is offering a gigabit service to businesses has generated news coverage—both locally and nationally. What I find interesting is the contrast between how national and regional stories cover the topic at hand and what they find important to focus on. The Louisiana-based stories are actually a good bit more substantial.

The national coverage has shown up at various advocacy and communications-centric specialty sites. Notable ones include Stop The Cap and Broadband Reports.  Stop the Cap's story notes ATT's role in trying to block LUS and it malign influence on lost delta-region fiber broadband grant. Pull quotes:

That puts Lafayette on the map with Chattanooga, Tenn., as the two fastest operating fiber broadband networks in the country selling to both residential and business customers.  Both are publicly-owned networks private companies like AT&T have lobbied hard to banish... 
An $80 million federal grant to fund much-needed improvements to the state’s Internet infrastructure was returned in what one public official called Gov. Bobby Jindal’s special favor to Big Telecom companies like AT&T.
Broadband Reports titles its story: Lafayette Offering 1 Gbps Connections Seven Years After Idea Was Nearly Destroyed And that's pretty much the story. As always at Broadband Reports the really interesting stuff is in the comments. A 150x150 tier coming from LUS?  Interesting.

The local stories are notable for being less cause-oriented and more down into the economic nitty-gritty.

First up though is an audio clip from KPEL's "Lafayette’s Fiber Gets Even Faster"...its nice to see the internet being used so competently by local media. The audio clip at the bottom of the page is the real thing—hear director Huval discuss the new capacity.

The Advertiser story, "LUS to release new high-end Internet" covers the local supporters of LUS' new tier, the competitors reactions, and throws in an interesting bit on the wholesale business. This site has already discussed the supporters' take. But of the two competitors AT&T's response—or rather, non-respsonse—was most interesting. AT&T basically told the reporter that they weren't competing and didn't plan to. Well, not in those words. But pretty nearly. Judge for yourself:

AT&T spokeswoman Sue Sperry said she doesn't anticipate a high demand for that kind of speed from residential customers... adding that AT&T offers 24 megabits per second with its U-Verse service in other markets, but not Lafayette. 
"Our focus right now is expanding capacity to our wireless network and adding more cell sites in the rural areas of Acadiana," she said.

Cox on the other hand said that they had plenty of good bandwidth
" the municipalities of Lafayette, Youngsville, Broussard, Carencro, Scott, Duson, New Iberia, Breaux Bridge, St. Martinville, Crowley, Rayne, Abbeville, Erath, Delcambre, Kaplan, Franklin and surrounding areas."

Fair enough, and they provide dedicated business bandwidth as well; though they didn't discuss how their a la carte product might cost. One interesting tidbit was revealed in the attempt to put Cox's best foot forward: apparently they're doing a fiber build:
Thompson said Cox Business is in the process of installing an all-fiber optic private network for a south Louisiana public school system that services about 90 schools and 50,000 students. 
"This customer is representative of the size and scope of a customer who actually requires gigabit level Internet services," she said."an all-fiber optic private network for a south Louisiana public school system that services about 90 schools and 50,000 students.
No, that's not exactly right. As St. Thomas More's gigabit connection demonstrates, a really well-equipped, forward-looking school requires a Gbps all by itself. I will be fascinated to discover who owns that network when it is done. And how much it costs to install.

The Advertiser has the savvy to ask about LUS' wholesale network and the relationship of the new gig tier to that set of LUS Fiber customers:

"This does provide other options for wholesale customers to serve their customers," Huval said. "In some cases, the wholesalers are going to have new options. It might require a shift in the way it is approached because of what we have out there, but the options are available to all customers." 
Wholesale customers would also have the option of buying LUS Fiber's gigabit service, Huval added.

That's hedging things considerably. Having a gigabit option on the table that is competitive in capacity with what wholesalers buy is definitely going to impact the way they market services. That's another area to watch and I'll be interested to hear what current wholesale providers think. Will it expand the market for the bandwidth intensive services they sell on top of the bandwidth they buy from LUS? Is 999.95 expensive enough to leave some room for their current marketing schemes?

Burgess at the Advocate pens "Utility increases Internet speed" He touches base with two other municipal systems that also provide a gigabit documenting the wide range in prices with one charging $2,500 to $3,500 a month, and another, EPB Fiber Optics in Chattanooga, TN, which offers 1 gigabit service for residential customers and small businesses for $349 a month. The implication, of course, is that LUS's service is not as remarkable as its home-town proponents might claim. That raised the ire of Joey Durel, Lafayette's mayor, who came onto the comments to counter any such impression:

2) Comment by Joey Durel - 04/06/2012
A clarification on Chatanooga. If you compare apples with apples, their guaranteed gig service is $20,000 per month. They have a shared gig service that only costs $395, but they say it commonly only delivers as little as 80mbs. This is much like the "marketed" speeds we often see companies offer. It is legal to market, but is rarely delivered. Lafayette's true gig service is $999.95, unheard of in America. 
I look forward to the battle of speed tests that is sure to ensue. But that might not be so easy to pull off—apparently for all that the gigabit connection has been very loudly and successfully trumpeted as the distinguishing feature of Chattanooga's project there are not many actual users of the feature:

EPB’s 1 gigabit service is offered to both residential and business customers, but she said only about 10 residential customers have signed on.

That's very interesting...

Burgess notes that LUS' gigabit service is only available to businesses (the Advertiser seems to have overlooked this point) but when asked LUS granted that they'd entertain the idea if any residences actually wanted the service, a sentiment that Huval repeated to me when I asked the same question.

Cox responded to the Advocate's apparently pointed questions about their pricing in a revealing way:

Cox spokeswoman Patricia Thompson said the connections are customized for individual businesses and that the company could not give a basic price for 1 gigabit service. 
She said Cox’s prices for the service are competitive with other private companies but might not compare with what’s offered by the publicly owned LUS Fiber, which had the advantage of government bonds to fund the startup costs and occasional intergovernmental loans.
That's more than a little defensive and more than a little misleading. One would think that a new overbuilder, trying to buy down an enormous initial investment while competing against an entrenched incumbent whose network is already paid off could be spotted a couple of points on a their startup loan. The "intergovernmental loan" business is purest hogwash. What "loans" there have been have been the result of LUS having to borrow back its own earnings, at a standard interest, that it was forced to pay over to the larger utility to satisfy the PSC's dubious interpretation of an incumbent-sponsored law that already unfairly forced the utility to hike its prices to satisfy nonexistent costs ranging from taxes it doesn't pay to fees for using poles LUS already owns. Cox wants to double dip on the loans thing, both forcing LUS to pay interest to use its own money and also complaining when it does.

A quick side note: I was impressed by the quality of both the local stories. Both reporters delved into issues that weren't apparent on the surface and actually went out and made calls and interpreted what they saw in a pretty reasonable way. LUS, Cox, and AT&T all had to deal with some insightful and uncomfortable questions. And that's the way it should be. Kudos all around.

Lagniappe: The move to 1 gig is not exactly a total surprise. It's been anticipated and hinted at for a long time. I blogged a quick bit on it back in June last. Back then, though, it was supposed to be for both businesses and residents....

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