"If you’re paying $39.95 a month for LUS’ 83-channel expanded basic cable service, breathe a sigh of relief. You’ll watch the undefeated Saints take on the Dallas Cowboys (8-5) on Channel 38 Saturday night at 7:20 p.m. But if you’re one of Cox Communications’ approximately 100,000 Acadiana customers who subscribes to expanded basic, 72 channels for $52.99 per month, it’s going to cost you more."
Couldn't have said it better myself. —You can sign up with the local guys or you can pay more for less and still not get what you want from Cox. It's a choice that ought to be easy. What do you think Lafayette?
The Saints Mania that has taken hold here (and across south Lousiana) has made people more than a little crazy and I've got email this week asking whether LUS will have the game. I had a hard time understanding what folks were anxious about since it is on expanded basic, and expanded basic is pretty much the default level for most folks. Now that I see that Cox is only carrying it on a more expensive tier I have to suspect that the truly fanatic were hearing about that and worried that the same would be true of LUS...there was a bigblow-up in the Baton Rouge media earlier this week and apparently Cox worked hard at getting it set up there even though BR wouldn't normally be allowed to see it. I'm sure they'd like to have been able to do the same in Lafayette—if only to avoid the unfavorable contrast with LUS Fiber.
It's not really just about this game and single, immensely popular show...it is more about the contrasting corporate policies that Cox and LUS Fiber pursue. Cox has, time and again, moved "must have" weather, French language, TV guide, and sports channels off the basic tiers and pushed them up into the upper, more costly, tiers in unpopular if financially understandable, moves. After all they are in it to make money for their owners. LUS Fiber, on the other hand, really doesn't have nearly the same pressure to "upsell" its customers since those customers are its owners. Keeping your owners happy means entirely different things to a large corporation and small town utility.
WBS Dept. In my catchup from being in B.R. series...two more
One of the more interesting (and, ok, personally gratifying) things that have resulted from the fiber fight and the creation of LUS Fiber is that Lafayette has gotten a pretty iconic status in the admittedly small (select?) world of high speed internet mavens. Lafayette is seen as something of a touch-stone...people watch and people compare what they're getting to Lafayette.
People watching includes Benoit Felten in France who runs a well-respected fiber-oriented blog called Fiberevolution. Benoit's day job is as an analyst tracking this sort of thing in Europe for the Yankee Group so he's pretty much up on this stuff. After reading the recent Ind article he says:
When I look at the delays of the French commercial FTTH deployments, what LUS is facing is, at this stage, fairly insignificant and certainly doesn't seem to compromise the operation (despite what a number of telco/cable lobbyists seem to be implying if I read the comments below the article...)
Those comments are not from lobbyists—they are just lobbyist-inspired...
Lafayette also comes up on dslreports when Cox launches its 50/5 meg package in Arizona. The news is, that for the first time, someone else is getting the 1/3 off deal Cox gave Lafayette when it launched the new tier. From the write-up:
Cox is offering the service in Arizona for $90 for the first year, the same low price they're offering customers in Lafayette, Loisiana, [sic] where Cox does battle with dirt cheap municipal fiber. Other markets aren't so lucky, with customers in Northern Virginia paying $140 for the tier, and customers in Rhode Island paying $145. Behold the benefit of actually having competition in your local market.
Qwest, the west's equivalent of AT&T or Verizon, recently launched a fast new 40/4 mbps tier at a cheap $99.99 and the new service, and lower price are responses to that development. —Cox's deployment strategy with its new 50/5 meg tier seems to be reactive rather than proactive. It offers the tier where it has competition that is much faster than its regular offerings and only lowers the price where the regional competitor has a much-cheaper-than-US-standard pricing structure.
The essence: Cox would like to throw a kink, into, to again delay if possible (or to impose additional costs on LUS if it is not) Lafayette's FTTH project by using the FCC to force LUS to deploy technology that doesn't exist. It seems, I suppose, like an clever way to try and use the feds to cause trouble for a competitor. The bitter irony is that the technology doesn't exist largely because Cox and its cable brethren have refused to obey the law and develop the technology to comply with what Congress mandated 14 years ago.
If none of those short versions satisfies you're going to have to settle in for a long, history-laden tale replete with bureaucratic battles, crippled 3rd party set top boxes, a long, successful rear-guard action by incumbents determined to keep consumers from controlling the boxes attached to their cable network and dueling technologies favored by self-interested players in a three-sided match-up. It's one of those stories that nakedly reveals "the way things really work" in a way that doesn't say much good about any of the major players.
Ok, first there is the cast of characters:
FCC: the federal communications commissions playing the part of the pitiful big guy all the tougher kids enjoy messing with.
The Telephone Companies: playing the confident old-timer with generations of home field advantage; the telcos have traditionally dominated the FCC game, but breaking into the video big time with IPTV-based set top boxes instead of the older cable tech requires all their lawyer's talents.
The Cable Companies: playing the fiesty tough kid from the sticks the cablecos have fought a successful delaying action against federal regulations that try to impose teleco-like requirements that would allow mere consumers to attach their own devices to the tough kids' network—and rob those tough guys of their traditional set top box charges.
The Consumer Electronics Association has wandered in from left field wanting to make sure that the big consumer electronics companies have a big single, unified market for set top boxes that keeps them from having to develop separate toys to control satellite, cable, and telco video set top boxes.
oh and:
LUS, the lonely little new kid on the block in the supporting role of the outsider whose seemingly innocuous question sets off a major battle. (This is the character whose fate is so unimportant to the plot that it's never resolved...and only the friends and family of the actor notice.)
The background story, the setup for the latest battle: Gather round kiddies, this story goes back to that dim time before the internet, 40 years ago, a time when things were different...Back then the FCC actually had the power and the will to break up huge monopolies like AT&T (really, it was broken up before the modern FCC midwifed in its rebirth). This all starts with the almost mythological Carterphone: a device that was to morph into the analog sound-based "modulate/demodulate" device that in turn became the digital modem of recent history. That's right sprouts: without the Carterphone there would be no internet for anyone today. And we almost didn't get the Carterphone. I won't tell the long version of the story (but it's a goodun.) What interests us today is that the FCC told the telcos that they had to let any device connect to the telephone network as long as it didn't damage the network. Ma Bell (what we used to call AT&T) howled. But the FCC stood its ground and soon all manner of phones that hung on the wall or had push buttons, or were wireless, or were pink replaced the phone company's black table-top rotary-dial ringer that had produced such a nice steady stream of income for Ma Bell. Though nobody knew it then the internet and VOIP and all manner of things that were to humble the once-invincible phone company flowed from that single brave decision to tell the phone company that it was only the owner of the network and had no right to tell legitimate users how they used the connection they bought.
—No, nobody knew back then but the story is oft-retold now... and the fiesty cable guys who'd once been little local municipal video providers but had coelesced into monopolies fully capable of taking on the telcos—and the sadly diminished FCC knew the implications of the Carterphone decision. And they had no intention of losing control of their network to consumers the way that the old AT&T had. Back in 1996, at the dawn of the internet era when the country was flush with enthusiasm for the new communications network, Congress passed a new telecom act which among other things, tried to reproduce the success of Carterphone by requiring that cable companies open their lines as well and specifically that they allow
"other converter boxes, interactive communications equipment, and other equipment used by consumers to access multichannel video programming and other services offered over multichannel video programming systems, from manufacturers, retailers, and other vendors not affiliated with any multichannel video programming distributor."
In other words, Carterphone for cable. Congress passed the task of enforcement off to the FCC confident that they had done their part to insure a brighter future and turned to confusing other issues. Alas, the FCC of 1996 was not the FCC of their grandfathers and, long story short: this never really happened. The cable companies successfully argued that they had to retain control of "security" and the FCC responded by requiring that the necessary proprietary security be separated from the rest of the box and located in a device that could be used in either the cable company's or a third party company's box. The cable card. Delay followed delay. The FCC's enforcement was pitiful indeed. So pitiful that it tolerated delays that meant that the first generation of cable cards was outdated by the time it was available and cable has still approve a card that is able to give third party producers access to their networks. This dithering about had damaging consequences: it left the producers of products that were clearly superior (in that people were really willing to pay for them); products that had usable interfaces and pioneered Digital Video Recording either bankrupt (Replay) or barely hanging on (TiVo).
Fourteen years later the FCC rule still stands and nobody is expected to actually follow it. Everybody has garnered an exception of one sort or another. All the players have their own version renewed occasionally on ever-varying grounds. The only constant is that the networks have never had to let their customers attach the equivalent of shiny new pink digital phones to their networks.
The consequence is that the much-anticipated digital convergence still hasn't happened. You can't surf the internet on your TV (well, there is an exception we'll get to), you can't do video telephony using your TV as a monitor, setting up recordings over the net or from your smart phone remains an uber-geek activity....and on. We could have used a cable version of the Carterphone. Instead what we got was a slightly faster version of the same access that the telephone companies had been forced to accept over their lines designed for voice. Faster internet, not access to a whole new communications network designed for video and much larger capacities.
The satellite companies never really had to comply with the law—the cable companies successful defense meant that satellite never really had to come up to bat since big brother cable proved capable of fending off the very idea. So satellite got an exception until cable could figure it all out...and cable wasn't about to. As workable cable cards finally neared market acceptance cable whirled around and managed to get the day put off a bit longer by instituting a new non-hardware based software standard which would be oh-so-much better. They got an extension of their exception to work on that. When the telephone companies finally started to get into the provision of video over their networks it was built on the back of the new internet (the one that their lose in Carterphone days helped create), implemented a version of IPTV—and taking a leaf from the well-worn book of cable have claimed that their special technology wasn't compatible with the old cable-card technology either. And (you see where this is going?) they got their version of an exception.
Who does that leave who does have to comply?
Surely you remember the lonely new kid on the block who asked the uncomfortable question? LUS? Apparently the argument is going to be that LUS should be the only guy in the neighborhood that has to follow the rules. This argument comes from none other than Cox Communications whose own exemption to the rule is still in place. Cox doesn't argue that the technology exists to allow LUS to follow the rule. (And it doesn't) Cox just argues that LUS should comply with a rule that it has never, ever, over 14 years done anything but fight itself. Citizens of Lafayette will be amused to learn that they are arguing that they only want to provide a "level playing field." Again. Like the state's (un)Fair Competition Act, you can be sure that when Cox says it wants a level playing field what they really mean is that they want the government to impose limits on Lafayette that it has never had to abide by itself. What is fair about asking your small local competition to abide by rules you yourself have successfully evaded? Of course this isn't about fairness. It's about advantage. In a halfway sane world the FCC would laugh in the face of an effective monopolist like Cox that tried to impose rules on a brand new competitor coming in from the outside any of the major sectors to provide the very high-speed, fiber-to-the-home, low priced competition that the FCC has been sniveling about wanting for the entire 14 years it has failed to enforce the law....but we don't live in a halfway sane regulatory environment.
To pile on the insult the latest is that the Consumer Electronics Association (CEA) has weighed in. Understandably frustrated after all these years, all the companies that want to make the magical media devices that record all and control all in your living room have demanded that the FCC quit making exceptions and enforce its rules....on a small municipal provider that is actually providing an innovative, powerful, cheap alternative that the FCC says it wants and that is the model of everything the CEA should hope happens to US broadband. Just for the sake of completeness I should note that each of the three-telco, cable, and CEA--have their own candidates for a new technology to enable video network openness. Each of them would dearly love to control that technology and no one can doubt that the one they'd come up with would 1) advantage them, 2) disadvantage their competitors, and 3) enrich the owners of the tech. Nobody's hands are clean.
LUS, of course, doesn't have the wherewithal to develop a new technology itself. The set top box family deployed in Lafayette is apparently the only one that is usable with both the Alcatel equipment the community is using and with IPTV. The fact that the network is all IPTV (translation into analog for analog tier users takes place on the wall of the house) opens up vast new areas for innovation. The 100 meg intranet "campus" is a good example of what a really innovative community-oriented network can do. Neither Cox nor any other cable provider is providing free unthrottled in-network bandwidth to its users. Even more on point: LUS offers our community an internet connection through the IPTV set top box. That the box is natively IP is crucial to that very desireable feature. Subscribers that don't even own a computer are able to surf the net. That's something that IP enables...and something, again, that I don't see that Cox or any of the other guys who have set top boxes have done. Really opening up the set top box is something that Congress was right about. There is huge room for innovation. The FCC's failure to enforce, and Congress' failure to provide adequate oversight to see that the nation's laws are enforced have cost the country dearly.
LUS points out that every other IPTV-using network has already received this waiver and that all they are asking for is the same waiver that Verizon and other established IPTV providers have already secured. To ask new entrants who are actually competing and using the new technology to offer a cheaper, faster, more innovative system is to bear a burden the established corporations do would be stunningly counter-productive.
Let's hope the FCC can find the courage that the FCC forty years ago had, do the right thing here and refuse to reward the bullying of a large corporation who has evaded the very rule that they hope to impose on a cheaper, local, competitor. A competitor who, incidentally, is actually demonstrating the value of innovation on the set top box that the rule is designed to achieve.
It'd be funny if it weren't so overburdened with irony.
Those of us who still get a daily newspaper will have been amused by Cox's latest attempt to "me-too" ("fiber is nothing new" cough, cough) the LUS network's offerings. As my wife was going through our morning ritual of removing the 3/4 of the paper that is glossy ad inserts and sections we never open out slipped an 8 1/2 x 11 Cox flyer with the screaming bold headline "LUS Fiber HYPE." The irony, of course, is that the hype and FUD is entirely being performed by Cox. Have you seen any LUS advertising "hyping" —or even promoting— LUS Fiber in the major media yet? I haven't. And I watch. Now no doubt the day will come when LUS will hype its network. When it is offering the service to a large enough base that it makes sense to advertise in the paper or other local media. But that day has yet to arrive. My guess is that this flier is the best evidence available that LUS' "controlled roll-out" is beginning to significantly cut into Cox's base of subscriptions; painfully enough to buy an insert which will be distributed almost solely to people who can't—Yet—buy LUS services. Now the motivation may be to just try and insert the headline into the "LUS fiber HYPE" into the community unconscious. If so that shows a pretty profound misunderstanding of this community. Cox has played the game of playing fast and loose with truth with Lafayette before and it's proved embarasssing. Who can forget the disastrous story of the "local blogger T. J. Crawdad" or the infamous "push polls? Even more than embarrassing...folks got to saying tha "you can't trust anything they say." This flier is in that (ig)noble tradition.
The thing Cox forgets is that to be truly effective attack advertising has to be true. And it has to be about something that people care about. Otherwise you just end up looking desperate. Cox is hyping its "digital TV," claiming to have more digital channels than LUS...and is using that hype to sell what's on the backside of the flyer: it's lowest triple play tier. For 89.99. For 12 Months.
"It's a day late and a dollar short" as the old saying goes. You're supposed to assume that the claim on the front supports the offering on the back. That you'll get more with Cox's cheapest "digital TV" offering.
But you won't.
Take a gander at the slideshow below; it's from Terry Huvals presentation at the recent (and fantastic) F2C conference. The relevant slides are numbers 31, 32, and 33 which detail the "expanded basic," "digital basic," and "digital basic plus" tiers for both companies.
What Cox wants you to buy, on the basis of their claims on the front of the sheet, is the product on the back of the sheet, that 89.99 (for 12 months) sale offering. If you go to Cox's "Greater Louisiana" website & drill down you'll get to a page that shows you get their "expanded basic" cable tier with that deal. So surf on over to slide 31 on the display below....
You'll see that in truth LUS offers more channels in their lowest tier combo deal than Cox. If that strikes you as strange soldier on to slide 32. There you'll notice that LUS offers more channels in the middle tier too..only at slide 33 the highest tier do you find Cox offering more channels that LUS. So the (hyped) claims on the front, while not entirely untrue at every level, do not support the product they are selling on the back. A little bait and switch, that.
And LUS' low tier combo deal is cheaper too: Cox's "Good" comes in at 89.99 (intro price) vs LUS' "VIP - $84.85" (allathetime price).
(And, while we're at it you also get 30 megs up and down with LUS but only 10 megs down and 786 k up... with video shifting to the web and more and more people doing their telephony through 3rd party VOIP that's going to be more and more significant. I already do a healthy amount of my TV viewing over my shiny new computer-TV hookup.)
Broadband advocates here in the good old US of A have been getting a little giddy at the sight of the federal government's machinery groaning into low gear to actually start the process of formulating a National Broadband Plan. (Yes, that explains why we haven't appeared to have a plan. We haven't.) Why just yesterday we started the planning process. First, in the distantly snide tone only the WSJ can pull off: the FCC "approved a broad set of questions designed to solicit opinions from consumers, telecom companies and state and local governments, to name a few." The FCC is gearing up to gear up because Congress has delegated to them the task of being the big thinkers on the 7 billion of the stimulus plan dedicated to broadband that is to be administered by bureaus within the Commerce Department and the U.S. Department of Agriculture. The FCC is supposed to devise the "national broadband plan" that will guide the decisions these bureaus make. (It's all in the law.)
I've been feeling pretty hopeful about the process...hey, it's a start. And a big step up from facing toward Fort Knox, closing our eyes, bowing low, and repeating the mantra "the market" 20 times as a substitute for telecom policy. Now I know that the money is actually being distributed in bureaus elsewhere and the people making those real decisions are all the way across the District of Columbia from the FCC...and it won't be ready in time to make a difference with the current stimulus money anyway, but still...to have something on the books that is supposed to be rational and comprehensive would be helpful, won't it? At least a start?
But all that feel-good sorta melted away when Austrailia announced its broadband policy: FTTP; Fiber To The Premise. At 100 megs. For the whole country, or 90% of the population anyway. (The most rural 10% will have to make do with a minimum of 12 megs—but everyone is offered real service.
Wowser.
And the way they're gonna do it! The government had been negotiating to fulfill a campaign promise to expand broadband access with the incumbents and some foreign corporations who, of course, wanted to be made lords of the domain for the next 50 years or so if they were to deign to do anything very useful. That part sounds familiar. We've got campaign promises and lords of the domain too... But the Austrailian government did something that it is hard for Americans to understand: they took a look at the I-want-it-my-way suggestions of the big corporations and grew a spine. They told 'em that they weren't offering a "good value" in return for the public's investment and that rather than accept any of their self-serving plans that they'd rather do it themselves.
They announced that they were intending to fund a Australian 43 billion dollar (30 billion USD) National Broadband Network (NBD). The government would get no less than 51% of the company and effective control; private investors would be allowed to buy in to 49% with the previously rejected telecom corps strongly urged to buy in...and to contribute their network assets to pay for their share. Take it or leave it. And if the telcos want to leave it: be aware that the Aussie national government fully intends to issue a new set of regulations enforcing structural separation that would effectively force open access on the current network assets they retain. The new National Broadband Network will be open as well. The old way of doing business is over; there is no comfortable monopoly—vertical or horizontal—to go back to.
Australian broadband advocates are pretty much stunned. (Imagine the US government saying anything remotely like this to Cox, Comcast, AT&T and Verizon? You know: "Take your greedy plans to feed at the public trough and shove it. We can build our own advanced network for the price your asking buddy, thanks plenty.—and by the way, no more local monopoly for you either, we're going back to real regulation of you guys." Oh You can't imagine it? Neither could the Aussies. Until now.)
We in Lafayette are in a particularly good position to see how much sense this all makes. We were happy to build it ourselves when told by the incumbent lords that we did not need and were not competent to run a modern FTTH system ourselves. That system is up and running and serving customers today—and doing so quite well, thanks. Since making that committment we've benefited by consistently being spared rate increases placed on other communities and, most recently, by getting a second 50 meg provider (albeit only 50/5) at a price that is 1/3 off what they plan to charge the rest of the country for that speed. And we got that before any of the big markets Cox serves or even the larger cities in our own market. Almost any other part of our country would kill for that sort of service and absolutely no place has it for as little as we pay. It pays to stand up for yourself in public as in private life.
Good on the Aussies. There's is a real national broadband plan. It will fix what's really wrong the current system. The current Aussie system, modeled in part after the mistakes we in the US were making, had resulting in a market with even more of the markers of monopoly dominance than ours. Aussie markets were more monopolized. The equiavalent of AT&T/Verizon, the telecom Telestra, was at least as insistent on maintaining its virtically integrated monopoly position and the cable sector was much weaker. Australians paid even more for broadband than Americans and an even smaller percentage of them were capable of getting really world-class speeds.
Going forward this will no longer be true. Australia will have a truly world-class network running at stunning speeds and capable of massive upgrades at minimal costs. Where homes in places where the villages have less than a thousand people don't have direct fiber they will have fiber-fed wireless. The final few deep in central desert will get satellite at no less that 12 megs. This is a public policy (and a stimulus) that will bear fruit for generations. When people talk about "forward-thinking" this is what ought to be meant.
While we cheer on the Australians ("Go for it, mate!") we on this continent have to feel a little bummed and whiny. Why can't we have a rational telecom policy, too? The up side is that the unthinkable is now finally thinkable. An English-speaking continent has taken the plunge and told their teleco monopolists that the current system is broken and then put forward a credible plan for fixing it that doesn't grovel and plead before of those that have failed them. Maybe we can do the same. Or at least talk about it!
In fact, not all is yet lost on these shores: One of the guiding lights of the Austrailian success was Paul Budde, long an advocate for a smart national plan in Australia. To read his blog these days is a real joy. He's as stunned as his fellows but is rallying nicely—telling the doubters in one example "Yes, we can!" in a deliberate reference to the hopes for a positive change that are now dominant in the U.S. Even more encouraging is the fact that he's also been in consultation with the Obama administration since before they took office and has no doubt been an advocate for much of this before our own leaders. I'd guess that until a few days ago his ideas, while judged rational in some sort of ultimate way, were not considered "pragmatic"—a key desiderata for the new administration. That judgment may now have changed. Indeed, on Budde's blog he remarks in the comments to his well-worth-reading analysis that:
I also received envious but very supportive comments from the Obama Team, they are very interested and several of the experts are eager to participate in our work group to contribute and to learn.
Not to get your hopes up but, perhaps, just perhaps someone here will say: "Yes! We can!"
Lagniappe: New Zealand, who recently announced a great plan too, is also jealous now: "Newman said that while the NZ National proposal looked visionary a year ago, it now looks comparatively limp." Aussie Envy; it's the latest syndrome to afflict the digerati.
The Google Internet Machine this morning dredged up what looks to be a promo flyer from LUS Fiber. Since it is not officially released (to my knowledge) it can't be taken as a promise. But, on the other hand, LUS paid somebody to lay this out professionally so I'm guessing that it represents an honest intention (click the image for a readable image-based version or go for the pdf : It touts the top 5 reasons to switch:
prices
innovation
customer service
local folks
economic development
The flyer offers details on the service, most familiar but some interestingly specified. For instance HD, Video On Demand (VOD), Pay Per View, and Digital Video recording will apparently all be part of the initial launch. Most innovative is the "Interactive TV Web Portal." What that, precisely, might be is unclear. It could range from a broad, net-based, google widget-like interface to something more narrowly tied to the IPTV box and its interface. I've advocated the former (related) and suspect the latter as this feature is included in the "TV" rather than "internet" box. Remember back in the day when the coming thing was going to be "interactive TV?" Then the web happened. It'll be fascinating to see how this version works.
The internet portion of the page focuses on the breath-taking speed—both to the internet and within our unique intranet. LUS Fiber will also promote a competitive array of email addresses, online storage, webmail access, and personal webspace. I, like Mike, have been bumping up against bandwidth constraints recently and I am looking forward to LUS' speeds.
All in all an interesting peek into the near future.
Food For Thought Department [What follows is lengthy and starts out with arcana but I think the implications are significant—perhaps especially for Lafayette. I ask that you stay with me...]
According to TelephonyOnline Verizon is radically upgrading the gateways it installs in homes served by the fiber-to-the home-based FIOS service. —FIOS customers can buy a triple play internet/cable/phone package from Verizon based on technology that is very similar to that being constructed in Lafayette by the community's Lafayette Utility System.
The new in-home devices have a number of interesting characteristics; they will:
bump "speeds over coaxial cable in the home from 75 Mb/s to 175 Mb/s"
"have double the processing power" compared to the current gateways
allow "users to create up to four separate wireless networks, each with different security settings"
allow "remote Verizon technician management"
Understand that an upgrade like this is costly. Customer Premise Equipment (CPE) is costly. Putting a piece of relatively pricey equipment in every home (on top of the set-top boxes you've installed for video and any VOIP equipment) really adds up. CPE is where every company tries to pinch pennies and extend the life of its equipment. So upgrades are rare. And they are never done without a damn good reason.
So why would Verizon invest in new hardware with the hopes of using the new capacities in “the next three to four years?”
My best guess: to ride the wave of big bandwidth in the home...Big bandwidth inside the home has recently emerged as an issue. (I've just recently caught on. See my recent post, FTTD (Fiber To The Desk, for some background musing on how really big in-home transfer might be accomplished. What Verizon is doing validates the idea but is pretty small potatoes compared to what is coming. Don't miss the comments--good stuff there.) Verizon clearly thinks that its current model which provides 75 mb/s will prove inadequate for in home use in the next 3-4 years. Pause to let that soak in please: the next 3-4 years. Tomorrow.
That is a near-future time frame. Nobody spends the amount of money that Verizon will spend even gradually moving over to new equipment without a very compelling plan to make back their investment. And Verizon knew what it wanted in these boxes. These are not off-the-shelf pieces; they've been designed to Verizon's specs and the company has contracted two independent providers that meet those specs in order to assure itself of supply.
So the difference between the previous standard and the new equipment should strongly hint at what Verizon thinks folks will do that makes the upgrade pay out. Let's unwrap those specs looking for clues:
The Analysis —Faster speed, from 75 to 175 mb/s, means that Verizon is expecting a lot of internal traffic on home networks. That is lot-—especially since Verizon won't offer you more than 50 megs of connectivity to the internet itself so it's not video downloads they're trying to accommodate (of course not ;-) ).
So for what do you need massive amounts of in-home networking speed? Take a gander at the processing power for a partial answer.
—"Doubling the processing power"--if you dig around a bit (1,2) you'll see that that phrase refers to moving from a 32 bit chip architecture to a dual core 64 bit chip. That's the way my fancy laptop is built. That's real processing power even if the clock speed turns out be a bit lower. It allows the onboard computer to coordinate more in-home devices. Most obviously multiple set-top boxes for the cable video service are in the mix; it takes a lot of bandwidth to push HDTV around especially if one or more set top boxes is acting like a DVR/video server and pushing video out to secondary screens. In fact the "doubling" phrase clearly understates the added computational capacity. On top of chip architecture the gateways can serve out eight (8!) Quality of Service (QOS) controlled channels. At a minimum that means that Verizon can push 8 separate protected streams to multiple TVs. But eight seems like more than homes really need. Of course there are Xboxes, and Wiis, and Apple TVs and the like in addition to a raft of reasons that users or companies selling to users might want a protected stream...So eight makes sense. . . If (and only if) you are planning to do something beyond video.
Ok, its faster and more powerful...
—What's with that feature: allow "users to create up to four separate wireless networks, each with different security settings?" Well, that allows you to set up a buncha different networks, some with QOS, some without, some that are slow, some that are public.....hmmn, whats with that? Again, it seems like overkill for current services. Wireless is hard to maintain for the QOS that video requries. They are probably wisely sticking with wires (coax) for that function given the eight protected streams on the wired side. By any measure the capacity for 12 separated streams is pretty astonishing.
Faster, more powerful, many separate streams, eh?...
—Finally: allow "remote Verizon technician management." That means that Verizon can modify the thing from their headquarters. That alone isn't too new—most "modems" can be upgraded by the company or at least reset to clear glitches and given the clearences it needs to access the ISP's network. But in this context "remote management" surely means the ability for Verizon to enable and assign all those streams and to install some management software or special access codes on unit. And, sell that capacity to third parties who would like to use the in-home network that Verizon's fancy new gateway creates.
Faster, more powerful, many separate streams, that can be controlled by the network owner...extending its control of the last mile into your rooms.
Chew on that for awhile. I did.
The Conclusion Some folks might think all these bells and whistles are just over engineering. I can't believe that a traditional telco like Verizon, one that is already straining its financial capacity to pay for a fiber build, is investing that kind of cash unless they really think this amount of capacity will be valuable to them within 4 years and pay for itself rapidly at that point.
My guess is that Verizon wants to control your home network and all the things that you are shortly going to want to run on it. Things which you might want today if only it weren't so hard and costly to get the service up and running.
What Verizon wants to sell you directly is only the base. Video and video serving is likely only the beginning from Verizon's point of view. The corporation has two profit centers currently: data and wireless. (Video shows promise but isn't there today. Old style telephone lines are shrinking.) Convincing you to buy more data capacity and their wireless service is a proven cash cow. Wireless's Achilles heel remains coverage and the most persistant irritation. In-house and in-building coverage is a big problem and one that is hard and expensive to solve by popping up more cell towers. The emerging solution is to use "femtocells" —to set up a small base station inside the building that is hooked up to a wired network and provides a mini "tower" that dramatically improves service. An in-home gateway like the ones described could help service and manage the bandwidth and protocols necessary to easily deploy this service to those that need it. And potentially radically reduce expensive customer turn over.
But, as popular as video and wireless retention has to be with the accountants who like old services and guaranteed returns, the real goal is likely broader: providing a platform for other, secure, protected services. Services which people can be sold but for which each provider currently has to figure out how to provison. A truly capable gateway like the ones that are described would let a lot of service providers play without installing their own in-home network and/or controller device.
All Verizon would want is, say, 20% off the top.
And providers would probably find that cheap compared to installing their own network.
Here's an unordered list of things which would be much more commercially viable if the infrastructure/platform were already installed in the home and could be activated and managed remotely:
Gaming can eat local bandwidth too.
Virtual Private Networks (VPN).
Video telephony and intercomms.
A local high school sports "network's" video stream and pay per view.
National professional and college sports "channel" versions of streaming video and downloads direct to your DVR.
Sophisticated security networks and security cameras.
"Telepresence" and other video conferencing/telephony.
Allowing all your electrical devices AC, refrigerator, hot water, etc to communicate and lower energy costs.
"Smart home" sensor and activity networks.
"Satellite radio" channels.
A myriad of music rental services could play directly through your connected sound system.
And many more.....add your own in the comments
Many of these "long-tail" sorts of uses will be "gotta have it" for some subset of users. The 2 dollar USL sports network will lock in users who will spend the next 200 monthly dollars on Verizon. Suppose only 1% of users has gotta have each of the above functions. That's 11% of the market right there. Locked into your company from the start. I think Verizon could make a pretty penny by controlling the gateway device that made such home functions easy to buy, install and provide.
I think any network could.
The Take Home Understand that the current incumbents know very well that the only thing that keeps them from becoming cheap, commodified transporters of other people's expensive bits is their monopoly-based control of the last mile architecture. If we had six connections to the outside world all networks would be running cheaply and competing on how fast and reliably they could provide us with bits. (But that ain't in the cards...which is why wise communities will follow Lafayette's lead.) The incumbent's stranglehold on the last mile is crucial to their profit profile. With it they are Gods of the network age. Without it they are the guys who sweep the roads and fill in potholes—and will be paid appropriately. They'd rather be Gods. That last mile control is the key to being invited in to control the network in your home too and the key that will give them huge new sources of revenue by controlling the toolbooth that they hope that new gateway will become.
It's a pretty damn good plan.
Lafayette No Lafayette Pro Fiber blog post would be complete with a comment on the local implications. IMHO this is another place where Lafayette could lead the way.
Verizon is poised to extend its fiber-based advantage into the home by controlling access to big bandwidth inside the home and by easing the entry of services that critically depend upon accessing a robust home network. In some places the cable company has already partnered with security firms to provide robust networking that rides on the coax installed for cable. Other incumbents surely will see the writing on the wall; they'll have to follow suite or watch companies like Verizon generate the revenues that will enable them to become more and more dominant. Verizon has the big bandwidth advantage in fiber. But that advantage is purely theoretical until the public can see that the more capable network can provide not only "more of the same" but actually "different and better" services. The gateway can be the key that unlocks that potential.
A gateway or something similar can do the same for Lafayette's network.
I've been hearing a lot of background buzz lately about trying to encourage tech development in and for Lafayette. Meetings in various places, varying level gurus flown in from various places to attend the meetings. Dinners in posh private homes. Talk about establishing an "x-prize" for Lafayette. An attempt to organize a meeting for developers. Desultory attempts at secrecy. (My list is surely incomplete.) The usual influentials' names are bandied about. You know, the works. No one knows whether any of it will come to fruition. But the point is that Lafayette is beginning to wake up to the fact that it will be well served to actually do something to encourage development. A "build it and they will come" attitude only works in the movies. In the real world if you want something to happen you've got to do something special to encourage it. Building LITE and LUSFiber and ramping up LCG's example are great starts but they won't, alone, be enough to make Lafayette the mecca many of us would like to see it become.
So far most of the Lafayette discussion on this topic has been couched in terms of somehow convincing (or bribing) developers to make us something special. As much as I like the idea—and hope it succeeds—I think we'd have better chance at success if we instead tried to do something special ourselves.
Like Verizon is evidently doing.
The heart of Verizon's apparent plan is to make it possible, even easy, for developers to do something great and different. They are poised to eliminate the barriers to "getting things done" by providing the platform over which these things can be accomplished. Verizon lays out all the tools on the table (albeit tools that lock you into their network) and will surely even handle billing for you. But they won't pay you. Instead they'll charge you...and your customers. Frankly, that's a better way. Opening the door is always a better plan than subsidizing the battering ram!
The right box in the house could do for Lafayette what Verizon's gateway is poised to do in the homes of it FIOS users. But Lafayette's could be based on ethernet and open IP standards instead of the clunky cable-oriented and proprietary network hardware and protocols that serve Verizon but are unfamiliar to most developers. Lafayette could do a better job of facilitating access to the Local Area Network (LAN) that is the home than any of the competitors is willing to do.
But Lafayette could go further. It could do the same for its MAN (Metropolitan Area Network) by building in the resources that make access easy. Make available storage. Make available the kind of computational power represented by LITE and Abacus. Embed modern protocols. Pack up some servers to enable within network serving of various kinds of data (streaming video, for instance).
In short Lafayette could make its networks, both inside the home and inside the city, playgrounds for the easy, fluid kind of development that developers love.
And we might, eventually even make a few pennies off it. But quickly and surely we could make Lafayette a tech mecca, give LITE a clear purpose in the community, and make LUSFiber a roaring success.
You want to be that shining city on the hill? The path is open.
Geoff Daily has interviewed Christopher Michell on municipal broadband and the discussion is well worth the less than 20 minutes it takes to view it.
It's an interesting discussion because, well, it actually feels like a discussion. Most of the stuff we hear on Municipal Broadband relies on a set of myths about muni-broadband that mostly go unquestioned. The format here allows Daily to bring up the traditional objections to municipal broadband and Mitchell quietly and directly show that the assumptions are untrue. To some extent Daily, as a broadband partisan, is playing the straight man to Mitchell--but Daily's comments on his blog demonstrate that he is serious about some of his concerns and hasn't quite absorbed the implications of his own remarks that "whoever owns the pipes controls the pipes."
Do give it a look. Sensible talk. The conversation does a rationalist's heart good.
For anyone in Lafayette it's not news: Cable companies faced with real fiber networks like to pretend that they too have fiber-optic networks. The Me Too, Mee Tooo!! claim has long become tiresome here.
Now the rest of the nation is getting the same sort of misleading PR that Cox has been promoting here since they lost the fiber fight. (Before that moment they told us we didn't need and didn't want a fiber to the home network.) From an AP story datelined New York:
The picture on his TV would freeze now and then, and he had heard good things about FiOS. Then the 21-year-old student saw a TV commercial from Comcast that made fun of FiOS and claimed the cable TV company has a larger fiber-optic network...
But after asking around online, he found that nothing's changed about Comcast's service: It still uses coaxial cable to connect homes. It does use fiber-optic cable further away in the network, as it has for many years.
"From what everyone said ... this is kind of misleading," Axel said.
Axel had fallen for one of a series of commercials run by every major cable company that competes with Verizon's FiOS. Besides Comcast, Cablevision, Time Warner Cable, Cox and Charter have all run ads belittling FiOS.
Verizon's FIOS fiber-optic network which is very different from, and much more powerful than, the cable companies' tradtional hybrid fiber-coax networks, inspired the spate of misleading advertising from beleaguered cable companies that have to compete with Verizon's more modern network.
Summed up:
"Cable is deploying the rhetoric instead of the technology," said Verizon spokeswoman Bobbi Henson.
That's pretty much the whole of it.
The article outlines several ads that range from misleading and confusing to outright deceit (the cable companies have had to pull several when challenged). There's one from Cox that says that Cox had fiber-optics before the phone company...which is goes beyond tricky wording into flat-out lying. The phone companies were the first to commercialize the telecom technology.
Take a look at the story. It's a rare instance when a major news outlet does anything like aggressive reporting on misleading advertising...after all, the cynic in me notes, that's an important revenue source.
Expect more of the same FUD in Lafayette as the ad war here heats up in anticipation of LUSFiber's January launch.
LUS Fiber is going to have a lot of advantages going into the fray with Cox and AT&T. Capacity, technical sophistication, home-town appeal, and the fact that we fought a winning battle against the incumbents to get our network up all work to the advantage of the local utility.
But, unfortunately, a "build it and they will come" strategy is mighty risky. A more solid strategy can be built by taking your advantages and making them essential to your customers. LUS will have to encourage its Lafayette citizens to value what it alone can offer. The utility will also need to acknowledge its weaknesses and take steps to minimize those weaknesses that are inescapable.
Technical and organizational advantages: LUS' indisputable technical advantage will be bandwidth, bandwidth, and consistency built on having bandwidth to spare. (No one will have to wonder if the network is too "slow" to handle a given use "right now." -- As I regularly do on Cox when the kids get in from school.) So how does LUS find a useful advantage in all that bandwidth; or rather: how does LUS make sure its users find that bandwidth too wonderful to pass up? And how does LUS do that in ways that its competitors simply cannot—or will not—match? That involves making good use of its massive bandwidth and symmetrical connections.
But the massive bandwidth of fiber on a modern system unburdened by legacy copper and commitments is not LUS’ only advantage. Arguably, that’s not the major advantage. LUS also has the advantage of being owned by its customers. Other businesses have to compromise between what is best for its customers and what is best for its owners. LUS doesn’t have that conflict and can rationally choose to benefit its citizen/customers in ways that are simply not open to other companies. This makes it easy to take smaller profits and offer more services—the stockholders of LUS will, I assure you, not object.
But the advantage of community ownership goes beyond doing a better job of the standard business plan; LUS can do do more than offer better service at cheaper prices. A community utility does not need to pretend to be a slightly more efficient company slaved to a standard business model based on profit maximization. The utility model is based on service maximization...and that is not the same thing. Cox has to be able to show the profit potential in everything it offers its customers or be legally liable for mishandling its owners’ resources. LUS, by contrast, can do things that creates value for its citizen/owners without creating direct value for itself along the way. A utility can pass value through. A utility can take a remarkably generous attitude towards its citizen/owners.
That, potentially, is a vast competitive advantage. It means that LUS can pursue business models that its competition simply cannot emulate. And “value pass through” is not theoretical or forbiddingly abstract in practice: Passing the value through is exactly what LUS is doing when it lets its citizen-owners use the full 100 megs of intranet bandwidth and offers symmetrical bandwidth. Private corporations are loath to follow suit because doing so would mean letting customers use resources they might eventually find some way from which to profit.
Value pass through need not be limited to bandwidth infrastructure issues like symmetry or full intranet usage. It can apply to infrastructure at higher levels. LUS can provide—or support—all manner of infrastructure. On the purely video side it could offer “channels” to anyone local at ridiculously low prices (as Burlington, Vt. is doing) it has bandwidth to spare. Why not? On the richer internet side it can host neutral servers that any citizen/customer can use. The utility can host cheap applications that are open to anyone who has an IP address on the network. It can host free or cheap online storage. LUS would be wise to host (or sponsor) servers providing all manner of higher-level infrastructure capacities. It would be a trivial expense to host a server that provided users with the ability to multicast streams of video (broadcast) or to reflect a video to a specified set of users (“unicast”). Application serving, online storage, and facilitating advanced technologies would all increase the value of the network for the community of users and that, not simple profit-taking, is the goal of a utility company. Happily, it would also raise the percentage of people who’d take the service and thereby add to the bottom line.
(An aside: Google acts like a utility; and is hugely successful as a consequence....the business model of offering your customers “free” value to make richer use of your network is the basis for the most successful new business model of our era.)
If value pass through, massive bandwidth, symmetry, and high-level infrastructure represent key advantages for LUS and Lafayette then those advantages should be used to offset any inescapable disadvantages the local network will face when dealing with Cox (and AT&T, should it get its act together).
LUS’ disadvantage: Size And LUS does have a key disadvantage: size. We are tiny compared to Cox. And even smaller compared to AT&T. Nor do we have, yet, a clearly visible wireless strategy and a wireless strategy will be considerably enhanced by the size of LUS’s competitors.
Large size makes a few things potentially easier, among them: regional content, regional network effects, and technical prowess. People want to communicate with and about local things. (Most phone calls are local, for example. Regional content like high school football has a larger area to draw from than the city of Lafayette.) So Cox will be able to establish valuable products like local calling circles and regional sports networks that LUS simply will not be in a position to match.
Large size also means that Cox and AT&T can afford to spend big bucks putting together sophisticated interfaces to their content and building devices that allow them to integrate wireless and wired, phone and internet, and generally to try and lock people into unified world where they can offer easy integration. —For instance they could work on making it easy to program your DVR from a phone or see a telephone caller’s name and number on the TV when the phone rings.
Advantages and Disadvantages. Lemons into Lemonade. So regional network effects and the ability to spend on integration and interface issues favor large corporations. But home town loyalty, massive bandwidth, symmetrical bandwidth and, most crucially, a willingness to pass value through to citizen-owners favor local, municipally-owned competitors. LUS can build higher-level infrastructure that drives participation and adoption.
Capitalizing on Advantages: Broadband and Symmetry
LUS can do what no private provider will: encourage bandwidth usage. And kill the old broadcast model while doing so. It will be to LUS’ advantage to do so since it will lead to a place where the competition will simply be unable to follow.
The most obvious driver of bandwidth usage is video and LUS needs to be thinking about how to drive levels of use so high that Cox and AT&T cannot match local demand. The way to accomplish that is make it possible and easy to use video phones, simple to use security cameras casually, to send video’s of T-boy’s birthday to grandmama, to watch a live stream of the Tuerlings game broadcast by a fan, to talk to salesfolk at a local store, to sign into a video “channel” organized by the Chamber of Commerce...or the Wetlands Coalition, to attend class, to, even, view locally produced full-length documentaries. Local video needs to become a casual, normal, accepted, unremarkable way to communicate, share, and promote products and ideas. If that level of usage can be reached LUS’ network will be wildly popular...and the intimate local content will make other networks look weak in comparison.
Making video communication unremarkable is quite possible. But it will require active promotion on the part of LUS and the Lafayette community. We will have to break our own path—fortunately that’s something we’ve done before.
LUS has already made an amazing start. We’ll have true bandwidth, true symmetrical bandwidth. It will be cheap. It will be ubiquitous. Those are the necessary if not sufficient conditions to move to a visually rich communications system. With the lowest tier, even in the first year, being 10 megs there will be no one on our network that will have too slow a connection to regularly use a video phone or watch full screen HD streaming video. Even when we are communicating with the outside world. When we are connecting to our fellow citizens we’ll have the full capacity of local network available to us, limited only by the electronics on the wall of our house...currently 100 megs. And everyone here will have the same 100 megs of intranet capacity. Regardless of what they pay for their connection to the outside world. That sort of uniformity and capacity will make it possible to build networks--human networks of people talking, playing and working--based on the expectation that you can communicate with huge resources.
We’ll have a dense population of uniformly high-bandwidth subscribers in a small city. Once a tipping point is reached everyone will want to be on such a network. First in Lafayette and then, when others see what is possible, elsewhere.
Reaching that tipping point though will have to be a goal that we work toward. Having the necessary conditions is not sufficient.
Getting There: Supporting Higher Level Usage
Bandwidth and Symmetry give this community a huge leg up on the future. The future will be possible in Lafayette come January. But they aren't enough alone to ensure that we make the shift ahead of other communities. The community will need more to make the jump. Luckily LUS is a public utility and it has already show that it thinks in terms of giving the community the most it can. That is why we have big bandwidth and a 100 meg intranet.
Public utilities can and often do pursue such a "generous" policy—and LUS has shown every sign that it understands the value of this. (For details see "On Really Getting It") A generous attitude turns the ROI attitude on its head: anything that benefits the user is good unless it does serious damage to the bottom line. The owners must be pleased first, just as in any business. But since the consumers actually are the owners in a public utility scenario pleasing them includes giving them what they want, mostly--which is lots of reliable services for as little as is possible. That is what public utilities do. They “pass value through” to their community.
We’ll still have two sets of needs that someone will need to generously provide; they will be both social and technical. Social needs are essentially educational. Technical needs are essentially infrastructure.
Social Support On the social side we’ll have to teach people how to use new tools. Dialing the telephone was once a daunting technical challenge involving unfamiliar concepts like codes that stood for locations and an elaborate set of rules about when to release the rotary dial. (Really) Use needs to be taught. In our era we’ll need to teach folks the rudiments of lighting, (backlighting is rude) how to upload video, a bit about politely providing a compressed stream to the poor people who view our stuff outside the city, and something about how to usefully tag our products. If that seems crazy and forbidding go back and look at the phone video I linked to above. In 5 years it will all be second nature--but until that time we’ll need to provide basic education.
Beyond basic communication we’ll also be undertaking to create media...to broadcast our kid’s soccer games, to hold business meetings virtually, and to create advocacy films and websites. We’ll need to learn how to do this well. The schools should be involved and we’ll need a community center, or several, to foster a new layer of people who are the equivalent of today’s photographers and newsletter writers...again, we’ll know this has been a success when nobody really needs to be taught this any more; when it is absorbed from the culture and every small group has its “Uncle Bob” who knows how to get it done.
AOC --Acadiana Open Channel, the PEG channel— who already does a similar task for TV production and film needs to be retasked to include these functions or some new organization created to serve these educational functions.
An AOC-like organization will also be needed to host Uncle Bob’s videos, to run the server, to vet the new “channels” and playlists made available by groups and individuals, and to keep the technical backdrop going. Community access channels will remain, if renamed in any new big broadband future that takes local communities seriously. Someone has to do the work.
Technical Support There’s a level of infrastructure above the physical connection that really should be attended to. If we can set up some reasonable standards and provide some resources that are easy and cheap for us to do collectively the whole process of “getting there” will take place much more rapidly and the Lafayette network that LUS runs will be much more useful.
LUS and LCG could provide most of this—and perhaps should—but they could also simply support it by sponsoring organizations that provide the functionality.
Most basically, community support organizations should be provided with bandwidth; they are serving the network and making them pay for bandwidth would be both prohibitive and unfair. The community media support, the local portal, organizations that support nonprofits...all need bandwidth to serve the community. If they don’t make a profit they shouldn’t be expected to pay to use resources that are, after all, not scarce.
Server and storage space are the 21st century equivalent of a the TV studio--the necessary infrastructure to make community media possible.
LUS can also establish basic technical capacities that anyone can use. For instance LUS should turn on multicast features in their routers, They should help make sure that a multicast server and a server that supports multicast are available for broad use. That is much like reserving channel capacity for public channels on today’s cable networks. The new networks will also be served by fostering public media.
There are also a wide range of things that the community, in the guise of LUS and LCG could do to keep the network up to date and able to dynamically adapt to changing conditions. Because Cox and AT&T will have much more money to drop in developing integrated applications (like the phone/TV ones mentioned above) than Lafayette ever will it would behoove the community to adopt the broadest standards available and encourage developers to treat a protected portion of the network like a “sandbox”--a safe place to play that encourages innovation. In one example: it is clear now that in the near future the standard set top box for cable television will be based on a standard called “Tru2Way.” This is a published standard and allows anyone to write applications that can be used on any compliant box. If history is any guide cable companies in general will try and strongly restrict what people can actually do with their signal and what applications are allowed to run on their boxes. The companies will want to control the experience (and dollars) of “their” users. Innovation will generally be restricted and nifty new services will not make it to market. (Want to know why your HDTV can’t surf the net? It’s not because such technology wasn’t developed a decade ago in rudimentary form.) If the Lafayette network adopts only boxes that run this standard and adopts an open attitude about allowing others to add value we’ll likely end up with advanced integration and a better user interface than any of the larger, slower, more constraining network providers.
Conclusion:
This has been a long piece but the take-away is relatively short: The success of the new LUSFiber network is dependent upon maximizing the advantages it gives its citizen/customers and finding ways to compensate for the networks inescapable weaknesses. Bandwidth, symmetry and the ability to pass-through value due to the network being community-owned are fundamental advantages. Size is any local network’s fundamental disadvantage. LUS needs to focus on making its advantages essential to the community; a process which will require both education and building another layer of infrastructure above the fiber itself.
Even if LUS has an advantage in a standard face-to-face commercial matchup (and it clearly does) it would be wise to play a deeper game; one that focuses on making the new network central to how we live and play in Lafayette. That means helping citizens find rich ways to use the network; especially help using the network to communicate locally. In that arena Lafayette’s network is free to adopt policies which will make it overwhelmingly more useful to community members—policies which its competition cannot match.
The Lafayette community has already demonstrated that it is up to the task and LUS has shown that they have right generous spirit to pursue their part of the effort.
What remains is to settle down to the hard work of making it happen.
Kevin Blanchard does his usual exemplary job of capturing the little ironies and quirks that make following the news so interesting.
In this morning's story on yesterday's big TechSouth Governor's award luncheon he covers the highlights of the event. If you'd like to find out more about the technology behind LITE and how BP uses in oil exploration the story is a great starting point. Our own Ramesh Kolluru comes in for well-deserved praise as well.
But if, like me, you're starved for a little knowing smile skip down to the end and read the bit about EATEL winning its Governor's award for best "Technology Company of the Year."
And just so you don't have to even click for your smile:
Gonzales-based EATEL was presented the Technology Company of the Year for its phone, cable and high-speed Internet service delivered over an entirely fiber-optic network.
EATEL President Robert Burgess thanked Cox Communications — a major sponsor of TechSouth — for its “formidable” competition.
“Because of (Cox’s) size, capability and market strength they force us to be at the top of our game every day,” Burgess said.
That competition has “helped” EATEL succeed, Burgess said.
Burgess than made a joking reference to Lafayette Utilities System’s fiber-optic based telecommunications service, expected to start up early next year — also in competition with Cox — saying he’s sure LUS would appreciate some help.
“We’ve had more than enough assistance,” Burgess said, drawing laughter from the audience, which included LUS and Cox officials.
“Please, any attention you give to us, please give it to (LUS),” Burgess said.
What Kevin does not have to say out loud is that lead sponsor Cox (with its name on every piece of promotion and occupying the suite of booths spanning the entrance to the affair) has recently been locked in an unusually public and expensive battle with EATEL. Cox is offering a super special that amounts to a 12 month 50% discount on its triple play package (with HBO!) but is only advertising it in the small area south of Baton Rouge where local telco EATEL is eating market share with the same FTTH technology for which they were receiving the technology award.
That's rich.
EATEL, as faithful readers of this blog will know, responded by taking out a series of full-page ads in the Lafayette Daily Advertiser which promoted, in vivid red and black, the deal in Lafayette as well. Louisiana law forces Cox to make the deal available throughout its service area but does not force it to promote it as evenly. So EATEL stepped up to "help" Cox out. So, on EATEL's account the two companies are engaged in an exchange of "favors." (That's rich, too.) After an initial confusion among Cox's operators, who initially denied the price reduction was available in Lafayette, the company trimmed its sails and made the best of a bad matter by allowing Lafayette residents in on the deal. Lafayette is a much larger market than East Ascension parish and extending the deal to Lafayette surely makes the attempt quash little EATEL with long-term price specials MUCH more expensive.
(Wanna know how you can get in on the deal? As a little fillup you'll be using a unified technology whose protocols will be similar to LUS' even if the capacity of LUS underlying infrastructure is vastly larger. After you get used to an all-IP household you can flip over to LUS' faster, locally-owned version. The Cox deal does not require a contract but is guaranteed for 12 months.)
/irk on/ As a little added fillip: Cox is sensitive on this matter—I wandered by the Cox booth at TechSouth (they give great floor prizes) and one of their booth guys struck up a conversation trying to encourage me to try Cox. I told him I already had cable and internet from them. He switched to urging me to try their VOIP. I couldn't resist at that point. I told him I was considering the "half-off" deal advertised in paper. ;-) He paled a little (though that might be my imagination) and said it was a good deal. As it is. But he then overreached by claiming that Cox had always intended to offer it to everyone. That it was only being "test-marketed" over there. Now that is just plain silly—and insulting. It was no accident that it was being offered in the only place in this market that Cox currently faces a local, FTTH-based competition. By all accounts EATEL is gaing substantial market share. I tried to point that out and that offering that large a reduction for 12 months had to be a bit more than a casual promotion. He countered by saying that Cox had done it elsewhere. I scoffed. He said he'd been working for Cox in Northern Virginia where they did the same. I doubt he expected anyone in little ole Lafayette to smile and point out that this proved my point about fiber competition—that is where Verizon's Fios FTTH network is going head to head with cablecos and is producing some of the highest speeds in the country. It's fiber taking market share, I said, that caused the long-term "specials" in both places. He wouldn't back off the company talking point that it was all just normal marketing and that it was just a coincidence that his company offered a 50% reduction in the one small place where they had fiber competition---and, oh yes, where they compete with fiber in Virginia. By the end I actually was insulted...Cox is, as EATEL says, a formidable competitor. They are shaping up to be the Verizon of cablecos—willing to really invest in the future of their network even at the cost of today's profits. That's both impressive and worthy. But their Achilles heal is their contempt for their communities, their customers, and even for individuals who walk up and talk to a representative at a trade fair. They need to learn how to be honest with folks. It'll go much further than hype, FUD and self-serving dishonesty. /irk off/
Post Scriptum: Blanchard is setting down his pen soon to go back to school and change professions. I, for one, will miss him and gently intelligent toss-off articles like this one.
Sharon Kleinpeter of Cox tells the Independent that folks in Lafayette definitely can get the 75 dollar triple play deal (about half off!) as long as you don't currently have Cox phone service.
It's a good deal and the first sign of real price competition in Louisiana attributable to locally fostered competition.
Cox's Kleinpeter tries to finesse the question of whether they are targeting EATel with this promotion even while admitting that they are only advertising it in Ascension. The implication is that Cox just happens to be "testing" it in Ascension. Sure...it was entirely coincidental that the ONLY place that it was actively promoted was in the ONLY place where a local fiber to the home project was up and running and costing them market share. And it was only a coincidence that it was ONLY offered to folks who were switching phone service to Cox from a local phone company that recently started offering cable tv service over that fiber. Cox really shouldn't try to mislead people so transparently. It will make people outside of Lafayette think that Cox isn't honest about such things. (People inside Lafayette already know this.) Really, it shouldn't be embarrassing to actually admit to competing on price...regular companies have to do it all the time—and do it fairly.
The package a deal...and apparently there is no contract involved. Just a guarantee of the price for 12 months. It'll do till something better comes along.
(Thanks are due to EATEL for uncovering this and to the Independent for following up with such alacrity—the weekly had to ask "embarrassing" questions of a major regional advertiser. They did it, and are running the results, apparently without flinching. It should be noticed. Kudos.)
One of the reasons that LUS has relaxed a bit about making its pricing commitments is that it is increasingly obvious that there will be no national price war on broadband. So LUS can confidently see that with its much longer pay-back time and with no need to chase large profits for impatient stockholders and investment firms it can easily undercut the pricing of corporations who have, essentially, decided to milk the customers of their established monopoly cows for the indefinite future. As AT&T and Verizion roll out broadband services that provide no advantage over cable for the same levels of speed it is increasingly obvious that the two industries have decided not to compete on price.
The latest in this "we-are-competeing-vigorously-but-not-on prices" noncompetition competition between the colliding telco and cableco monopolies in the broadband arena was AT&T's decision to raise prices on its broadband DSL customers...except in former BellSouth areas where its prices were previously higher.
That wasn't what "competition" between the cablecos and the telecos was supposed to bring. You may recall that when AT&T was trying to transfer local municipal property rights to the state level so it could get around the locals' insistence that AT&T serve all of a community with their new services in return for using the community's land they claimed that relieving them of that obligation would yield cheaper prices for the favored few that actually got "competition." Even that half-a-loaf is NOT the way it is working out...and both the cablecos and the telecos like it that way. Two competitors are simply not enough to establish a competitive market and reality is taking its toll on that tale. A few are even noticing that we've been taken:
The announced price hike didn't sit well with some observers.
Routers, modems and other equipment used to deliver bandwidth are dropping in cost as rapidly as bandwidth demands are rising, said Dave Burstein, who operates DSLprime.com, an industry newsletter. "Total cost to the company for the bandwidth it delivers is about $1 a month per customer," Burstein said. "AT&T is raising its rates because it can. It has the market power to do so. Increased costs aren't the reason."
AT&T still has to pay off the enormous costs of trying to absorb BellSouth, among others, a consolidation that our regulators allowed because it was also supposed to lower prices.
The only real price competition we here in Lafayette can expect to see will come from LUS. BellSouth and Cox exist to serve the interests of their stockholders and that means that we should pay as high a price as the company can extract from us. The industry is learning right now that they don't have to compete on prices to maintain their margins--and so they won't. Anything less would be irresponsible. LUS also exists to serve its owners...but their (our) intersts are best served by low prices for high levels of service. Both types of owners will, inevitably, get a company pricing policy based on their interests. But only LUS will actually be motivated to compete on price. (Six month specials like those you'll see from Cox in both today's Advocate and Advocate don't count—that's marketing, not pricing.)
2009, after the launch of Phase 1, will be an interesting and, I'll bet, a satisfying year for Lafayette consumers of broadband.
2007 was the year Lafayette's fiber project emerged from the wilderness and people began to dream in earnest. The final delaying lawsuit was dismissed, the bonds sold, and contracts let for construction. Dreams followed the announcement of intriguing new features like a wireless addition and the 100 megs of intranet bandwidth and people began to dream of what we might do with it it to close the digital divide or provide new ways to strengthen the community.
January........ At the year's beginning we were still awaiting a decision from the State Supreme Court on the last lawsuit holding up the bond sale. The Fiber to the Schools project advanced, ensuring a parish-wide fiber backbone and early hints of a wireless project were realized when LUS put out a bid for a municipal wireless network — one initially designed to provide government services. The competition was clearly still out there as Cox introduced Video On Demand, upping the ante on what Lafayette's network needed to provide in its initial offerings.
February........ In early February Durel's "State of the City" address lauded the fiber build but failed to slake our appetite for new news on the wireless component. The Advertiser's attempt to move into an internet-centric future advanced in fits and starts but it emerged with arguably the best local video site in town, far outclassing the efforts of the local TV stations and proving that with the construction of new net-based infrastructure the race will not necessarily go to the established incumbents. An attempt to resuscitate the breathless prose of the fiber fight fell flat at the Advertiser as a story about the cost of defending ourselves against the incumbents produced no discernible ripple of concern from a populace immunized against such sensationalism by the long fiber battle.
Late in the month, after weeks of waiting, came the Supreme Court decision we'd been waiting—and hoping—for. The Court unanimously overturned the 3rd Circuit's ruling and pretty roundly spanked them for their mistakes in letting the argument go on for so long. The final victory for Lafayette was widely heralded as one that would have consequences in locales beyond Lafayette or Louisiana. Cox, after years of vigorous attempts to delay or destroy the project, testily denied that it made any difference to them. Dreaming about what we could do with the shiny new toy starts almost immediately and LUS announced plans to solicit ideas from the community.
March........ The first, and in retrospect apparently last, of the Fiber Forums is held and the community had plenty of ideas. (Cox and AT&T also attended and took conspicuously copious notes.) If nothing else the forum demonstrated that the LUS understood that a generous attitude will pay unanticipated dividends. And that simple insight is one which will do more to make the system a success than any elaborate business plan. Wireless hopes, big intranet bandwidth, symmetrical speeds and more were all promised and their implications discussed.
An old issue, the digital divide, returned, Lafayette was named a "Smart Community," and the first high paying jobs attracted by the fiber arrived. LUS started to spend visible money on the networks construction, selecting a design firm to lay out plans for the headend building that would house the electronics and for a warehouse to store the masses of equipment that would be needed in the construction phase.
April........ April brought a shower of small advances. The Digital Divide Committee was reconvened, the location of the headend facility at the intersection of I-10 and I-49 was set, and an engineer to oversee the construction and help make crucial decisions was chosen.
May....... March brought a reblooming of the old FUD tactics from the incumbent corporations. Cox kicked off the festival with an embarrassing attempt to pretend its hybrid fiber-coax network was a fiber network in a venue where everyone knew better. Just a bit later we got a whiff of old push poll tactics when a new, apparently limited version was trialed in Lafayette. Then Naquin's (AT&T's PR team?) attorneys carried water for the incumbents by engaging in a rather transparently false threat to sue LUS just a week before the city went to New York to interview for the crucial bond ratings.
June........ As the seasons turned Huval went to Councilor William's "Real Talk" and talked—about the retail wireless plans, about a faster construction schedule, about a larger basic cable lineup than anticipated, about internet speeds where the slowest package would be faster than the fastest speeds available in most of the country. Oh yeah, and symmetrical bandwidth coupled with a 100 meg intranet. Enough to leave the most ardent proponent breathless. Lafayette Pro Fiber floated a dream about a "Lafayette Commons" that would take our commonly owned network and use it to make a place to share local information build community.
The bond sale was authorized and the bonds were put on the market. The first unit sold solidified the legal standing of the entire business plan since bond holders are constitutionally protected from any change in the plan no future legal challenges to the basic plan can be successful.
July....... In July LUS' Huval was honored by his national peers—he was both given an achievement award and made the chairman of the board of the American Public Power Association. The success of the fiber fight clearly raised his stock nationally as well as locally. The bond sale closed; meaning the money was in the bank and available to spend. The newly hired engineer's men were in the field surveying poles—making sure there was plenty of room for the fiber to be hung.
August........ Joey Durel took over leadership of the Louisiana Municipal and pledged to work "to give local governments more ability to control their own destinies while not placing roadblocks in the way of our progress." Among other things, that probably referred to the infamous imposition by the legislature of the (un)Fair Competition Act. An LMA with aware leadership will fight such laws. The City-Parish Council approved the fiber funding plan. Dreaming about what might well turn out to be the nation's best telecom system continued apace and a new Digital Divide report was made to the council.
September....... Another small media tempest erupted as the kids headed back to school. The headend building came in way over budget and LUS had to scale back and issue a new set of specs to keep its price under control. The headend was one in a series of public projects whose price spiraled upwards in the wake of Lafayette's post-Katrina/Rita building boom.
Cox fired its most effective shot yet across the bow of LUS by securing a long-term contract with ULL athletics for exclusive rights to telecast replays of coaches programs, sporting events and university athletic programs on its cable systems—and we can rest assured they'll not be reselling such valuable material to the local opposition. For ULL fans this is a very big deal—such deals have lead to a lot of fan anger on both coasts where such deals are more common.
The Advertiser endorsed the dreams of bridging the digital divide in a supportive editorial and Huval spoke up on Federal broadband policy in his role of APPA chair saying plainly that the incumbent telecom corporations had failed American in spite of massive subsidies and called for letting "the public sector take the reins in communities where citizens want them to do so."
October........ Dreaming of a better wireless network provided a bit of fun in October. The surprise announcement that LUS would imitate Apple and open its own "fiber storefront" to educate and promote the brand was greeted with approval. And the construction news rolled on with Alcatel being picked to provide the electronic guts of Lafayette's new system.
November........ LUS signed a franchise agreement with the city-parish that was virtually a copy of Cox's and immediately tried to reassure folks during its approval that the agreement wasn't nearly all they hoped to provide the community. One of the few areas where LUS laid out a plan in their franchise agreement for going beyond what Cox had already done was in its support of AOC, the local access channel. That touched of some dreaming about what a 21st century AOC might really look like. Mike weighed in with some dreams about an asynchronous Lafayette in which AOC or a surrogate would play a major role.
If history repeated itself with the franchise agreement, an awareness of the recent fiber battle seemed completely missing from the minds of some candidates for the state representative seats up for grabs this year. Let's hope their more aware colleagues educate them as to what a successful telecommunications utility could mean for the hopes and dreams of their community.
December........ As the year wound down toward the holiday season the bid on the revamped fiber headend was accepted and the crews were spotted in a North Lafayette neighborhood moving wires on poles in preparation for hanging fiber.
The future is upon us. Since the plan is to light up a section of the city somewhere near the first of the coming year, with any luck next year's edition of this missive will be able to say that fiber has been lit up in Lafayette and that we no longer need to wait for the future.
