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Sample Community Fiber Promotional Material from Lafayette
LUS Fiber Testimonials and a Radio Ad
Resource: 2005 Lafayette Referendum Flyer
Cable Monopoly Result of Private Sector, not Public
A common misconception is that local governments award exclusive (or monopolistic) franchises to cable companies and that is why the US has so little cable competition. However, no local government has done this since the 1996 Telecommunications Act 1992 Cable Act made the practice illegal.
But even before the '96 Telecom Act '92 Cable Act, local governments tended to award non-exclusive contracts to cable companies because they wanted more competition, not less -- as illustrated in this article about Cox preparing to renew its franchise agreement with New Orleans.
Federal laws and Federal Communications Commission decisions also have sharply curtailed the city's negotiating ability. Even if other companies were seeking permission to provide cable to local customers, said William Aaron, a legal adviser to the council on telecommunications issues, council members could not arbitrarily refuse to renew the Cox franchise. The council could do that only on the basis of certain limited criteria, such as that the company has not lived up to the terms of the 1995 agreement. Cox has had a nonexclusive franchise to operate in Orleans Parish since 1981, meaning that other companies also can apply to provide cable services, though none has done so. The franchise was renewed in 1995.For years, state and federal policies have limited local authority to require just compensation for access to the valuable right-of-way because the cable and telephone companies pretended that they would invest more and create competition if local authority were preempted. Local authority has been significantly preempted in many communities without any real increase in competition or lowering of prices. No surprise there - another victory for companies better at lobbying than providing essential services.
Lafayette Dealing with Expected Headaches
Competitors will pay less for programming than you do, and in turn play hard ball by lowering rates for customers. Good luck keeping up with technological advances, expansion needs and growth costs; it's a risky proposition for a public entity used to maintaining rather than adapting. Your opportunities will be limited because you can't provide services outside the city limits. You'll be criticized for offering programming such as adult movies, and you'll be told you really should be focusing on your core business: running power, water and wastewater plants.Terry Huval delivered that message in 2000, long before Lafayette committed to building their community fiber network -- a network that delivers some of the fastest speeds in the nation at the lowest rates and has already delivered hundreds of jobs. Nonetheless, LUS Fiber is behind the take rate goals they had set in the business plan. The expenses are higher than forecast because Lafayette was unfairly denied entry to a coop that secures lowers rates for television contracts for members. The only discernible reason for rejecting Lafayette is that Cox joined the coop after Lafayette committed to building its network. There is little doubt that Cox was influential in denying Lafayette's application, likely increasing LUS Fiber expenses for offering cable channels by more than 20%. This is just one of the many ways that the telecommunications market is rigged to benefit incumbents at the expense of all of us -- residents and small businesses alike. We will not have real choices in competition until government policy treats telecom like the essential infrastructure it is. Mike Stagg, a long time supporter of the network is quoted in the article, challenging LUS Fiber to improve its marketing:
Can they do better? Probably so. Part of it is the fact that, just from a mindset standpoint, LUS is a utility and utilities generally do not compete," Stagg said.
Is Lafayettte Community Broadband Doing OK or Great?
LUS estimates that the citizens of the community have saved 5.7 million dollars—in part direct saving from LUS' cheaper phone, video, and internet services and in part as a consequence of Cox lowering its prices and giving out special rates. Those special rates were discussed in the meeting with Huval pointing out that Cox had petitioned for and received permission to treat Lafayette as a "competitive" area. That meant that Cox could offer special deals to Lafayette users and, as we all know, has offered cuts to anyone who tries to leave. Those "deals." as Huval pointed out to Patin don't include the rural areas of the parish where Cox has no competition.But it doesn't end there. LUS Fiber, due to anti-competitive laws pushed through the state's legislature to handicap public providers, is actually subsidizing the City -- providing more benefits to everyone, even those who do not subscribe to the network.
Again it all goes back to the (un)Fair Competion Act. One of the things in that act a concession that LUS Fiber would be able to borrow from LUS' other utilities just like any other corporation could set up internal borrowing arrangements. This is not a subsidy, it's a loan—with real interest. One of the efforts to raise an issue by Messrs Patin and Theriot centered around "imputed" taxes. Those are extra costs that Cox and ATT got the state to require that LUS include in order to force LUS to raise their price to customers (you!) above the actual cost. (Yes, really. See this.
Louisiana Leg uses Porn Excuse to Target LUS Community Network
Lafayette's LUS Fiber Creates Videos, YouTube Channel
Lafayette's publicly owned FTTH network has created a YouTube channel featuring a commercial aimed at residential subscribers (in 15, 30, and 60 second spots) as well as a longer video aimed at increasing economic development. Both are embedded below.
These are "no-brainer" marketing techniques that every community should have at a minimum to promote their services.
Lafayette Offers 100Mbps Residential Tier ... And Ruminations on Bandwidth Caps
The other residential tiers are cheaper than their corresponding business tiers by 45-48%. Nor, according to Huval's remarks in the comments is the monthly usage cap any different—in both the residential and the commercial versions of the 100 meg package is capped at 8 terabits. (Note: that'd be about 1 terabyte of hard disk storage.) The idea behind the higher prices for businesses is that they use much more bandwidth than households—and LUS pays for its connectivity by capacity.This brings up something I don't think I previously noted in discussions about LUS Fiber - it comes with a monthly transfer cap. I cut the cap chart out of their user agreement [pdf] above. Remember, 8 bits to the byte. Thanks to DSL Reports for the link to the user agreement. This raises an interesting discussion. Private cable companies typically enforce caps because their network cannot physically support many users using a lot of bandwidth simultaneously. When hundreds of users share a single connection (as with cable), a few major users can seriously impact the experiences of others. In a FTTH network like Lafayette's, there is no real danger of one user's activities affecting another's. However, there is a danger of racking up a high bandwidth charge for LUS Fiber if many users are constantly using a lot of bandwidth.
Herald Tribune Series on County and Community Networks
"We decided for the kind of money these people are asking us, we would be better off doing this on our own," said Kevin Kryzda, the county's chief information officer. "That is different from anybody else. And then we said we would like to do a loose association to provide broadband to the community while we are spending the money to build this network anyway. That was unique, too." The new project will use a contractor to build a fiber network throughout the county and a tiny rural phone company willing to foot part of the bill in return for permission to use the network to grab customers of broadband service. The combined public-private network would not only connect the sheriff's office, county administration, schools and hospitals, but also would use existing rights of ways along major highways to run through Martin's commercial corridors.Michael Pollick correctly notes that Florida is one of the 18 states that preempt local authority to build broadband maps. However, they incorrectly believe that Martin County is unique in its approach.