Friday, September 28, 2012

"Fiber Economics - Quick and Dirty"

"Fiber Economics - Quick and Dirty" is a primer for those who want to understand the raw economics behind any fiber build—Lafayette's included. The author, Dave Burstein, uses examples from Google's build in the Kansas Cities and Australia's national broadband initiative as anchor points but the logic is clear and straightforward. Almost as valuable is Burstein's judgment on the current basic costs—there's no one more knowledgable.

As a taste:
Bandwidth isn’t free, but it’s darn cheap. A moderately sized carrier pays less than $1/month/customer http://bit.ly/N3kVKS. Google pays much less, while small and rural carriers sometimes pay much more. Bandwidth use goes up only modestly with higher speeds; the industry rule of thumb is about 1/3rd more usage if you give the customer higher speeds. A Netflix movie will come in at 2-4 megabits whether you have 12 megabit service or a gigabit. You don’t get more email because your connection is faster.
That's actually very interesting. What it means is that Google offering every customer a gig of connectivity does NOT result in their using 100 times as much data as the average american user. Faster speeds don't mean linearly faster costs. Not even nearly. Which is something we here in Lafayette should think about.

Cox Complains in a Strangely Unsavory and Incredibly Hypocritical Way

If we were't already completely used to Cox's self-serving version of fair play and level playing field behavior we might have been shocked by the corporation's most recent claim on the country's sense of fairness. But this sort of stuff shouldn't surprise anyone anymore. It certainly doesn't surprise anyone in Lafayette.

The (Strange) Plaint
Cox is complaining to the FCC that the four largest video companies in the country (Comcast, DirecTV, Dish Network and Time Warner Cable) are soooo big that they can successfully demand huge discounts from content providers that are unavailable to the poor smaller and mid-size distributors. This puts the little guys at a disadvantage.

The logic is reasonable, the little guys are at an unfair disadvantage. As Cox says:
"As programming costs are shifted disproportionately to mid-sized and small multichannel video program distributors (MVPD), their customers are disadvantaged as higher costs make it more challenging for these MVPDs to develop the innovative services at competitive prices necessary to meet the offerings provided by the largest providers,"
What is unreasonable, is the idea that Cox is one of the poor, put-upon little guys.Cox is the fifth largest provider in the country immediately following Time Warner. Not a little guy at all. But more than that: Cox joined the National Cable Television Cooperative (NCTC) back in 2009 breaking a 4-year moratorium on new members and with its large size made the NCTC the second largest buying force in the nation! Now the scuttlebutt in the trade press is that Cox has not much used that buying power, finding that it could do better on its own except for a few special deals for material like regional sports networks where the smaller cablecos are more significant regional players than Cox happens to be in that area.

Which, of course, suggests the question: Why did Cox join a coop for little guys in the first place? It really wasn't intended for the behemoths the size of Cox; it was designed to protect the mom and pop, single area cable companies from the likes of Cox. If Cox doesn't get much advantage, why bother? And why lend its buying power to a set of small local companies on the backs of whom Cox has traditionally grown by purchasing when their size disadvantage in pricing made them vulnerable to take-over?

That's the interesting question. And the answer lies in a little history.

The (Unsavory) History

The fight for fiber that lead to LUS occurred in 2005. Lafayette won; Cox and AT&T lost. Shortly thereafter the NCTC instituted a moratorium on new membership that was to last 4 years. LUS and several other municipalities put in for membership at different times during that 4 year moratorium.

Also in 2005 Cox first ran up against a small, fiber-based Louisiana competitor whose competition was aided by access to the NCTC's cheaper content in 2005 when EATEL (a locally-owned rural telecom) in Gonzales launched its triple-play package. It wasn't any more a pleasant experience for Cox to face EATel in the rapidly growing Ascension area than it had been to lose its battle with Lafayette.

The NCTC moratorium ended on Jan. 1 2009 and its first new members were quite a surprise to the industry: it wasn't any of the usual small guys who'd been waiting in line—instead Cox and Charter, two of america's largest cablecos ended the moratorium by joining up. Cox was even rewarded with a seat on the governing board.

For the rest of those guys in line? Well if they were LUS Fiber and and the other new municipal players they were simply ignored—without explanation. The munis finally got together and began the process of appealing to the FCC who is charged with preventing anticompetitive behavior. Suddenly other munis were accepted and Lafayette was, again without explanation, left out.

It's hard not to think that Cox's experience in Louisiana didn't inform its decision to join the NCTC and the new NCTC Board's subsequent decision to exclude the only muni whose competition was now an NCTC member.

{This story has a semi-happy ending: the NCTC finally backs down after LUS continues its costly battle in DC. However, during the long period where they were denied access LUS signed all its initial contracts as an independent suffering, by most accounts, about a 20% penalty that would last for years until they could bring the coop's contracts with those providers into play. No explanation for the NCTC's actions and inactions were ever made public.}

The (Incredible) Hypocrisy
So Cox is not just complaining about an injustice. The are complaining about an injustice that they are happy to take advantage of themselves. But where Comcast et al. are simply taking using their size and resulting market power  to hurt Cox is willing to go much further: It is willing to use a coop that exists to protect small local guys like LUS to force costs on Lafayette's utility that it would not otherwise bear. And they have the brass to bring that complaint to the FCC who has heard exactly this reasonable logic before—when it was aimed at Cox and its allies.

That's just incredible. You can't make this stuff up.


(Hat tip to fact-finder Mike Stagg on this story.)

Wednesday, September 26, 2012

LUS Fiber & Saint Thomas More & The Modern Curriculum

LUS Fiber has an ongoing "affinity" program with St. Thomas More high school; that program is evidence of a willingness to use the community's network to open up new possibilities for education in Lafayette.

An Affinity Promotion
St. Thomas More a local Catholic high school will benefit from a new affinity program with LUS Fiber. From the St. Thomas More website:
LUS Fiber has recently announced a new program exclusively for STM students, faculty and staff. Any STM student, teacher or staff member that switches to LUS Fiber will receive $50 in bill credits AND will secure $50 in bill credits for STM as well! Mention the “STM Affinity Program” when you sign up for service. This program is available to new residential and business customers in LUS Fiber’s service territory. LUS Fiber is the state’s largest community-owned ultra-fast fiber optic network that provides service to residents and businesses in the city of Lafayette. Visit LUSFIBER.com for more information on the company and its services.
It is pretty clearly as small transformation of the popular "Refer a Friend" promotion — your refer a friend and if he mentions your referral you both get a 50 buck discount on your bill. In this version your friend assigns his 50 buck discount to the school.

It is easy to see why this is likely to be an effective promotion—its' a good way to activate both school spirit and community patriotism. But its a good bit more than that potentially; a partnership between LUS Fiber and the schools is a natural—and necessary—condition for moving education into a 21st century model. Let me use St. Thomas More as a practical, specific example of why this is so.....

St. Thomas More's Gigabit:
An interesting idea and one that could generate a lot of team spirit. St. Thomas More was was LUS Fiber's first gigabit customer—a fact that the school brags on in its parental information page:
LUS Fiber provides St. Thomas More High School with a 1 Gigabit connection over a pure fiber optic network to power the robust and innovative applications used to create an enhanced educational experience. LUS Fiber is the only community-owned, ultra-fast fiber optic network in the state and offers video, Internet and phone services to residents and businesses in the city of Lafayette.
The 1:1 Tablet Program & Instructional Model
The school needs that gigabit. In addition to the usual computer labs and classroom computers St. Thomas More also sports a 1:1 tablet program in which each student is supplied with a tablet computer for their 4-year program. The student has has use of the tablet in school and out. Continuous access is crucial to the "flipped" curriculum model St. Thomas More is using. The traditional school-day pattern is to teach all the students in the class the material and to apply, practice, and review as homework. The flipped model flips that (bet you didn't see that coming!). Students watch video instruction and read material at home which leaves more time in school for the teacher to engage in targeted review with students who are struggling with a concept and to develop application projects that ground the material learned. (Much of this was discussed by the principal at that the recent "Breakfast for Fiber" event.)

When 1,100 students and faculty able to go online at the same time they can soak up a LOT of bandwidth. Principal Audrey Menard said at the Breakfast for Fiber event that they outran their 100 meg connection within a month of acquiring it from LUS.

The Bottom Line
Yes, the school needs a gig, any school with an muscular, universal, always-on program of tech use will gobble down a huge amount of bandwidth. But even more: moving much primary instruction to the home means the home has to have a lot of bandwidth too. St. Thomas More classes often provide video of their classroom lectures—with the school provided tablet that's easy if, and only if, they have a lot of bandwidth at home. That applies to other online learning environments as well. Should the students want to try a different explanation of the transitive property or Boles law the Khan Academy, iTunes U, or Youtube is sure to be useful; and to suck down its own ration of bandwidth. In addition to classroom teaching materials St. Thomas More also uses the Moodle class software you'll more commonly see in university classrooms (including ULL) and an array of other parent and student accessible grade and testing material available off the schools website. LUS' 100 meg intranet ensures that every student on LUS' system will be able to get back to their school's server at usable speeds. 20 students logging on from home won't bog down the connection.

All this boils down to a pretty simple bottom line: a really forward-looking school, one that uses technology to its full extent, will need four things: 1) An always-on, stays-with-the-student form of access, 2) truly massive of bandwidth to the school, 3) a lot of bandwidth between the school and the home, and 4) a good pipe from home as well as the school to the larger universe of learning resources. In most places in this country this is simply too high a bar; most schools simply cannot afford to "own" the gig or more that they need to start with pervasive personal access—and very likely don't have it available at any cost. The families cannot all afford to be on a big pipe at home—and even for those that could afford it really big bandwidth is commonly simply not available to most homes.

LUS Fiber makes a truly modern curriculum model possible. Right now St. Thomas More has the resources to make one inexpensive tablet available to their students for a four year tenure. The school has a gig available for what would be a shockingly low price almost anywhere else in the US. And, like all citizens, students in Lafayette have easy, cheap access to residential fiber's low latency and high speed.

It's possible here. It is not possible in most places in this country. And for that advantage we have LUS Fiber to thank.

—————————
One school leading the way is admirable and laudable. But it is not enough. We are rapidly approaching a tipping point in Lafayette where the materials and methods being used at St. Thomas More are becoming more widely available and cheaper each year. Substituting a tablet for an large backpack full of expensive texts is already a sensible proposition—where the texts are digitally available. But other places will not be able to reap the sorts of benefits for which St. Thomas More is striving because the infrastructure will not be available to flip instruction into every home that needs it. Within the city we have LUS fiber and a central reason for extending it into the parish should be to serve every student. Having a local fiber net network that treats schools like schools and citizens like citizens rather than profit centers is the hard part. We've got that now.  The affinity program that St. Thomas More has is not just good business—it's evidence that LUS Fiber thinks about these things differently. We ought to be planning, now, for a sea change in education that leverages the advantages Lafayette fought for to make a better future for our kids.

Friday, September 21, 2012

LUS Fiber as a solution to the US' lousy service

What's Being Said Dept.

In a conversation focused on the poor service and high prices of American broadband due to the policies of monopoly providers Lafayette gets prominent—and favorable—mention.

David Cay Johnston, speaking on Lafayette's LUS Fiber on NPR's Fresh Air:
"They created a municipal electric system. Well, they also built a municipal Internet, and it is so high-powered and so fast that a lot of the work done for the Pixar animated movies is done not in Hollywood, but in Lafayette, La. Well, the response from AT&T, Verizon, Cox, Time Warner and the other cable and telephone companies has been to go to legislatures and say, 'We want a law passed that either blocks or makes [it] virtually impossible to build municipal systems. That's competing with our business interests.' And that's part of the whole strategy they have: 'We want to be monopolies without competition, we want to run the system in our interests, to maximize our profits,' with no regard for the overall economy of the United States."
 The Lafayette material starts at about minute 6:00; the whole discussion is well worth the listen. Some of the policies discussed are beyond outrageous.

(Hat tip to spotter Travis Gauthier!)

Laignaippe: I talked to Johnston in late 09 about these issues and his book. At the time he was presenting the theme as the costs to the middle class of public policies that favor corporations. Sounds like the book has finally made it into print as "The Fine Print: How Big Companies Use "Plain English" to Rob You Blind."