La. Overbuild Clears Another Hurdle

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The city-parish council of Lafayette, La., has overwhelmingly approved a telecommunications overbuild by its local utility.

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

This marked the first official step toward enabling the utility to seek the approximately $111 million it must borrow to launch a telecommunications operation featuring fiber-to-the-home architecture.

The project will be funded through municipal bonds.

LUS officials presented the city with survey results indicating that 75% of potential consumers said they would switch to the municipal telecommunications provider.

The incumbent cable provider, Cox Communications Inc., conducted its own survey. Cox’s version indicated that consumers perceived a risk with the municipal telecommunications system and objected to plans to borrow to fund it. But LUS officials got copies of the questions asked by Cox’s contract firm and argued that it was a “push” poll designed to elicit answers matching Cox’s company position on the overbuild.

LUS officials believe a municipal system could capture enough of the community’s 55,000 residents and 6,000 businesses to sustain the telecommunications operation. The infrastructure will build upon the 65-mile fiber loop 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 underprice products from the two local incumbents, Cox and regional Bell operating company BellSouth Corp.

The incumbents have both announced that they have their own triple-play plans. Cox has now added telephony to its list of local offerings in the area, where it already offers digital-cable and high-speed-data service.

And in the wake of a decision by the Federal Communications Commission that exempts incumbent telephone companies from sharing their networks with other telcos, BellSouth announced that it, too, will soon offer a bundle of products in Lafayette.

But supporters of the municipal network noted that both projects will be fiber-to-the-curb, adding that the new build will have more capacity and flexibility because it will not have coaxial cable or copper as a component in its proposed network.

The overbuild is not subject to a public vote. The project must still go to a state commission to issue the needed bonds.

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