Policy

Lafayette Votes for Muni

7/22/2005 8:00 PM Eastern

In a stinging rebuff to opposition by cable and telephony incumbents, Lafayette, La., voters have resoundingly approved the parish government's move into the broadband business.

The referendum, held Saturday, July 16, was approved by a vote of 62% to 38%. Twenty-seven percent of voters turned out for the election, approving a measure to issue $125 million in bonds for the project.

CLOSELY WATCHED

Other municipalities have closely watched the election. Since advanced services are available to Lafayette, provided both by Cox Communications Inc. and BellSouth Corp., regulators elsewhere wanted to see if taxpayers would understand the benefits of an all-fiber plant and approve a third landline provider.

The local utility, Lafayette Utilities System, has been creating plans for more than two years to build a fiber-to-the-home plant to pass 55,000 residents and 6,000 businesses. Supporters asserted that the project, dubbed “Fiber for the Future,” could move forward upon approval by the local parish government without a referendum

However, the incumbents and the Louisiana Cable Telecommunications Association successfully challenged that approval process in court earlier this year. Changes in state law mandate a public election on projects which use public funding, the incumbents argued.

Incumbents used the delay to advertise and editorialize against the project, emphasizing the financial implications for ratepayers or taxpayers should the project fail to meet business targets.

“BellSouth and Cox wanted the people of Lafayette to speak, and now the people of Lafayette have spoken loud and clear. Now it's time for BellSouth and Cox to accept what the people have said and stop throwing hurdles in our way,” Terry Huval, director of LUS, said in a statement.

The battle for broadband in the community drew national attention to the Lafayette and to the issue of municipal broadband. Mayor Joey Durel, a staunch and vocal proponent of the project, also said in a statement, “This is a huge moment for Lafayette and America. Our citizens have sent a powerful message — Americans want their local governments to do what's necessary to be 21st-century cities second to none.”

MORE APPROVALS NEEDED

This does not mark the end of the approval process. The bonding methodology must be approved by the state Public Service Commission. State law bars cross-subsidies for municipal broadband projects, so opponents are likely to question the propriety of using the traditional utilities backbone, paid for by ratepayers, to back up the bonds.

The rest of the approvals, plus the buildout, could take another two to three and one-half years.

September