Lafayette Doing OK, Doubles Capacity for Promotion John at Lafayette Pro Fiber recently updated us all on LUS Fiber's financials. According to John, LUS Fiber is doing OK, not great, in its FTTH offering (probably the best deal in the nation for fast, affordable, and reliable connections). In reading deeper, it is clear that the impact of the community network on the public is GREAT, not just ok. From John's writeup:

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.

We occasionally see big cable and phone companies getting creative in their efforts to shut down community networks. In socially conservative communities, restrictions on providing adult content is a common approach. This technique came up several times in North Carolina, where TWC-sponsored elected officials proposed disallowing public providers from offering the same adult content channels that private providers offer. The reason has nothing to do with morals, but rather with the substantial revenue adult content generates. Incumbent providers know that if community networks cannot offer adult content to those who wish to purchase it, they will be deprived a significant source of revenue needed to pay the debt from building a modern network. Bear in mind that no one is forced to see this content or even a scrambled channel (as was common in the "old" days). Community networks allow each family to decide for themselves what content is appropriate -- to the extent community networks differ from private providers in this regard, they provide more tools to filter out content that some may find inappropriate. Last week, the Louisiana House briefly considered a bill to limit Lafayette's authority to make adult content available to subscribers that request it. House Bill 142 exists solely to put LUS Fiber, an impressive muni FTTH network, at a disadvantage. John at Lafayette Pro Fiber has excellent coverage of the situation, with both an initial post featuring eyes-a-rollin' as well as an in depth followup "Lafayette delegation kills anti-LUS bill." The latter is essential reading for those new to understanding how any legislature works. And anyone building a network that will compete with big companies like AT&T, Cox, Time Warner Cable, et al. had better know how legislatures work because those companies live in the Leg.

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.

On August 19, 2010, I was one of hundreds of people telling the Federal Communications Commission to do its job and regulate in the public interest. My comments focused on the benefits of publicly owned broadband networks and the need for the FCC to ensure states cannot preempt local governments from building networks. My comments: I’ll start with the obvious. Private companies are self-interested. They act on behalf of their shareholders and they have a responsibility to put profits ahead of the public interest. A recent post from the Economist magazine’s technology blog picks up from there: WHY, exactly, does America have regulators? … Regulators, in theory, are more expert than politicians, and less passionate. …They are imperfect; but that we have any regulators at all is a testament … to the idea that companies left to their own devices don't always act in the best interests of the market. They go on to say If companies always agreed with regulators' rules, there would be no need for regulators. The very point of a regulator is to do things that companies don't like, out of concern for the welfare of the market or the consumer. When we talk about broadband, there is a definite gap between what is best for communities and what is best for private companies. Next generation networks are expensive investments that take many years to break even. With that preface, I challenge the FCC to start regulating in the public interest. The FCC does not need a consensus from big companies on network neutrality. It needs to respect the consensus of Americans that do not want our access to the Internet to look like our access to cable television. But while Network Neutrality is necessary, it is not sufficient. The entire issue of Network Neutrality arises out of the failed de-regulation approach of the past decade.

Lafayette's LUS Fiber network, after recently kicking off its ad campaign, has decided to offer 100Mbps residential connections after a number of requests from subscribers. The network previously offered a 100Mbps business service for $200 -- it seems they are now just allowing anyone to subscribe at that level and price. As John notes at Lafayette Pro Fiber blog, this is the only tier for which residential plans come with the same price as business plans.

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.

A few weeks ago, the Herald Tribune ran a number of articles about broadband by Michael Pollick and Doug Sword that discussed some community fiber networks and efforts by Counties in Florida to build their own fiber-optic networks. The first, "Martin County opting to put lines place," covers the familiar story of a local government that decides to stop getting fleeced by an incumbent (in this case, Comcast) and instead build their own network to ensure higher capacity at lower prices and often much greater reliability.

"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.

Jonathan Feldman's "The State of Broadband," in a July Information Week cover story, is a breath of fresh air. Too often, these articles are written by someone with little background who extrapolates after discussions with the PR wing of several big companies. But Feldman has a keen grasp of reality and is aware of the many communities that offer far better services than the big companies like Comcast and AT&T.

The state of broadband matters to your organization. There's been considerable consumer interest over the past several years, culminating in an FCC plan announced earlier this year to expand broadband coverage and speeds and promote competition. IT organizations can benefit by staying in touch with those regulatory issues, as well as taking advantage of new technology trends, such as wireless broadband, and partnering with alternative providers and municipal networks that buck the status quo. There are clearly risks in doing so, but taking no action almost guarantees that enterprise IT, with pockets of presence in rural and other nonurban areas, will continue to be held back by low-capacity, high-expense networks.

I was even more impressed when I came upon a chart showing "selected rates for business Internet service for small and home offices." As would be expected, it showed Verizon FiOS, AT&T, Charter, and Comcast. But to give a sense of what is possible outside these major carriers, it showed LUS (community fiber network in Lafayette, LA) Fiber prices -- which completely blew away options from the major carriers. There was nothing even close. He also notes Chattanooga's impressive 150Mbps tier -- which, as I often hasten to note, is not to suggest that community fiber networks are only successful if they can offer such impressive speeds. Chattanooga has access to bigger pipes at lower prices to connect to the Internet than most communities. And they are certainly taking advantage of that local situation! My only quibble with the article lies with the assertion that competition is on the way for most of us. I think competition is on the way for very few of us, absent community investment.

John at Lafayette Pro Fiber posted about an upcoming Lafayette TV ad. Apparently, this is an advance copy. It emphasizes the ways in which LUS differs from privately owned networks. Community networks, no matter how technically superior to incumbent offerings, must have an outreach or advertising strategy. Having the best network does little good if few people know about it.

LUS has asked the court in Kansas to dismiss a lawsuit against it by NCTC (I previously explained this situation here). Down in Louisiana, a local paper is continuing to cover it and John at Lafayette Pro Fiber has explained the situation as well, with more context about the NCTC. Once this lawsuit is dismissed, we'll hope for a ruling from the FCC that the NCTC cannot simply discriminate against some municipalities based on the private company incumbents doing business there.

In an editorial about the LUS Fiber lawsuit against NCTC, the local Lafayette paper made the following observation:

We've had our own reservations about LUS Fiber to the Home, based on concerns about a government enterprise encroaching on a market in which private-sector entities were already providing service. But LUS has, from all available evidence, enhanced the competition in the local marketplace in terms of both price and technology.

Those who claim community broadband networks decrease competition and incumbent investment do so against all empirical evidence.