SEPTEMBER 12, 2006 -- The City of Lafayette (search Lafayette) has filed a formal application to the Louisiana Supreme Court asking justices to approve a bond ordinance plan to expand fiber optics to every home and business in the city, a project has been stalled for two years. The city also requested expedited consideration of its application because of the project's importance to the people of Lafayette and its ramifications for every municipality in the state.
In May of this year, Lafayette resident Elizabeth Naquin lost her lawsuit seeking to block LUS's funding in district court and then appealed to Louisiana's 3rd Circuit Court of Appeal. That court ruled that LUS's bond ordinance is in violation of the Local Government Fair Competition Act.
"We've fought for two years to make Lafayette Utilities System's Fiber-to-the-Home a reality," says Joey Durel, Lafayette city-parish president. "While the incumbent telecommunications providers have attempted to stall the issuance of bonds and thwart competition, we believe that our bond issuance plan complies with the law, and it is our hope that the justices will agree."
Supporting the City of Lafayette in its writ application is the Louisiana Municipal Association (LMA), which has filed a brief as an amicus curiae. The Louisiana Municipal Association is a not-for-profit, non-partisan, and non-political organization comprised of approximately 300 municipalities throughout the state. Established in 1926, it serves the interest of the state's villages, towns, and cities. The Brief of the LMA calls the Court's attention to the potential adverse consequences to municipal financing in general, which might result from the 3rd Circuit's decision.
At issue is a law passed by the Louisiana Legislature in 2004 called the Local Government Fair Competition Act. The Act was intended to strike a fair balance between municipal entry and protection of the private sector. As interpreted by the courts, however, it has turned out to be a barrier to progress for LUS's plan and to recovery efforts in New Orleans after Hurricane Katrina. Approval of LUS's plan would affect every Louisiana municipality. Currently, every municipally owned utility with the same opportunities that Lafayette has will also face a barrier and be road-blocked by past interpretations of this act, say LUIS proponents. I
"In order to help keep America competitive in the global economy, we must continue to promote technological progress and healthy competition," argues Terry Huval, LUS director. "In its Aug. 16 issue, Forbes Magazine put Louisiana last in its ranking of the best states in which to do business. Companies need more and more bandwidth to conduct their businesses. The old model of the giant cable and telephone companies constraining commerce by starving businesses' bandwidth is costing our state and country countless jobs," he asserts. "We need to show the nation that Louisiana is a forward-thinking state harnessing technology in a way no one thought possible 10 years ago. The 3rd Circuit's decision would essentially nullify the Legislature's desire to enlist Louisiana's municipalities in this critical effort."
On JulyI16, 2005, Lafayette voters gave the City of Lafayette permission to issue up to $125 million in bonds to extend fiber to every home and business in the city, offering Internet, telephone, and TV service. The measure was approved by a vote of 62 percent to 38 percent. I
Following the referendum, Lafayette says it received congratulations and good wishes from across the United States and around the world. Many observers viewed the lopsided Lafayette vote as a sign that the public has become upset and alarmed by America's decline in international ranking in broadband deployment and wants local governments to take bold action to reverse this trend, say proponents of municipal FTTH deployments.
"In some studies, the United States is ranked as low as 19th among the leading nations of the world, and it is also falling increasingly behind in access to high-bandwidth capacity and cost per unit of broadband," explains Jim Baller, senior principal of the Baller Herbst Law Group in Washington D.C. and widely regarded as the nation's most experienced and knowledgeable attorney on public broadband matters. "We must do all we can to eliminate roadblocks and enable cities to take maximum advantage of 21st-Century technology to boost their economies and benefit their residents," he urges.'
Fiber optics supporters recognize the benefits of the LUS FTTH project beyond just the 58,000 homes in Lafayette. The fiber-to-the-premise that is the foundation of the LUS project means vastly increased bandwidth to area schools. Direct fiber connectivity will also give local businesses an opportunity to compete on a global scale that would be unobtainable without this technology. This will also create new jobs and create new business relocation to the area.
NuComm International, a Canadian company that provides technical and service support, customer care, billing, and data management to companies, announced on Aug.I8 that it would be building its 14th and largest customer contact center in Lafayette. Company officials cited the city's technological developments, namely the LUS fiber telecommunications project, as a principal reason for locating to the area. The company will hire 1,000 workers initially with eyes on expansion.
"The fact that the owners of the new call center came here because of Lafayette's innovative communications plans signals what is possible and how attractive that goal is to out-of-state businesses," asserts Durel. "We are committed to making the LUS Fiber-to-the-Home project a reality, so we can make Lafayette competitive with the leading cities in the world and serve as a model for the rest of the state."
The LUS Fiber-to-the-Home project also will enable residents who before now could not afford high-speed phone, television, and Internet to receive it in their homes. The proposed cost of the three bundled services through the LUS plan would be roughly 20%Iless than the competition charges. The city was also planning a major initiative to make computers and training available to individuals for whom broadband has not been a meaningful option.
A recent report by Leichtman Research Group puts Louisiana in the bottom five of all states in terms of broadband penetration into homes. The study shows only 21.3% of Louisiana's residents have broadband access, far less than the national average of 35%.
Since LUS first proposed the plan two years ago, interest rates for bonds have increased significantly, which could jeopardize the project. Lafayette and LUS leaders believe that a speedy decision could save the project--and, therefore, the consumers--millions of dollars.
"When you boil down the arguments to the basics, it is easy to see who's looking out for the greater good of our community," contends Durel.
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