After nearly five years of planning and fighting with local cable and phone companies, the Lafayette Utilities System opened its fiber-optic broadband network for business.
The utility began offering service this week, according to the Lafayette, La. local newspaper, The Daily Advertiser. A small number of customers already have phone, TV, and Internet service. And beginning Friday, LUS will begin marketing the service to customers in the first phase of the roll out. LUS plans to roll out service gradually in three phases and expects to offer a triple play service to all residents throughout the city by 2011.
The utility system, which built a fiber network to service its utilities business, had been offering wholesale bandwidth services to Internet service providers, and providing retail broadband services to city agencies since 2002. In 2004, the agency began looking at ways to offer broadband services to residents and businesses.
BellSouth and Cox Communications, the local telephone and cable companies serving Lafayette, strongly opposed the utility system's plan. And they filed several lawsuits to stop the utility from raising the funds to build the network.
But after the public voted in favor of the project and the utility fought a series lengthy legal battles that went all the way to the Louisiana Supreme Court, LUS was finally able to sell bonds to fund its project.
The new network was supposed to launch in January, but it was delayed by negotiations over television programming, The Daily Advertiser said.
It's easy to see why Cox Communications, the local cable operator, and AT&T, which bought local phone company BellSouth, are threatened by LUS. Pricing for the new triple play services are very competitive. Consumers can get a triple play bundle from about $85 to $200 a month. And the broadband services offer download and upload speeds between 10Mbps to 50Mbps. The standalone broadband service costs about $29 for symmetrical 10Mbps downloads and uploads; $45 for 30Mbps, and $58 for 50Mbps service. The service doesn't require a contract and there's no installation fee.
The maximum download speed offered by AT&T is 6Mbps for $43 a month. And it's cheapest is a 768Kbps service for $20 a month. Cox only offers Internet download speeds up to 15Mbps. Depending on what specific services are selected, bundled pricing from AT&T and Cox is comparable. The big exception is that AT&T and Cox offer these prices as part of a promotion, whereas LUS prices are the actual standard prices and will not expire.
Lafayette is just one of many cities that has tried to build it own broadband network. Other cities and regions such as Provo, Utahhave attempted to do the same thing. In nearly every instance, cable and phone companies have tried to prevent these network build outs.
They argue that it's unfair for public utilities and cities to use taxpayer money or government bonds to build competing networks. It will be interesting to see how this debate shakes out under the new Obama administration. President Obama has made it clear that he hopes to fund projects to bring broadband service to every American. And there is a chance that some of these public utilities and other non-traditional entities may end up with some of the billions of dollars in promised federal funding to build these networks.