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Lafayette, La., Overbuild Gets the Green Light

11/21/2004 7:00 PM Eastern

The Lafayette, La., city-parish council has overwhelmingly approved a telecommunications overbuild by its local utility — a project opposed by cable incumbent Cox Communications Inc.

On Nov. 16, the nine-member council voted to form a communications division within its local utility, the Lafayette Utilities System.

That’s the first official step toward enabling LUS to seek the roughly $111 million it must borrow to launch a fiber-to-the-home telecommunications operation.

75% WANT IT?

The project will be funded via municipal bonds.

LUS officials presented the city with survey results which found that 75% of potential consumers said they’d switch to the municipal telecommunications provider.

Cox also conducted its own survey. Its findings: consumers perceive a risk with the municipal telecom system and object to the planned borrowing that would fund it.

But LUS officials obtained copies of the questions asked by Cox’s contract firm, and argued that the survey was a “push” poll designed to elicit answers matching the MSO’s position.

LUS officials believe a municipal system could capture enough of the community’s 55,000 residents and 6,000 businesses to sustain itself. The infrastructure will build upon a 65-mile fiber loop that’s already in place.

The council took the vote after two public hearings. The utility overbuild was approved by an 8-1 vote, according to the city.

LUS intends to offer a triple-play bundle that officials said would be priced less than products from the two local incumbents, Cox and BellSouth Corp.

Both companies have disclosed their own triple-play plans. Cox has added telephony to its local product menu, which had already included digital cable TV and high-speed Internet service.

BELLSOUTH IN, TOO

In the wake of a decision by the Federal Communications Commission that exempts incumbent telephone companies from sharing their networks with other telcos, BellSouth Corp. said it would also soon offer a bundle of products in Lafayette.

But supporters of the municipal network note that both projects will be fiber-to-the-curb, and that LMU’s new build would have more capacity and flexibility because neither coaxial cable nor copper would be a component.

The overbuild is not subject to a public vote. A state commission must issue the proposed bonds.

 

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