LUS wins fiber fight

Fiber optics may be reality in two years

Claire Taylor
The Louisiana Supreme Court cleared the way Thursday for Lafayette Utilities System to launch its fiber-to-the-home project nearly three years after the idea was introduced.

In less than two years, some residents and businesses may be surfing the Internet, watching television or phoning friends through LUS' fiber optic network.
Three years after the first customers are connected, everyone in the city of Lafayette who wants fiber service through LUS should have it.

"By the end of 2008, Lafayette could legitimately be the most connected city in America," said Lafayette City-Parish President Joey Durel.

Officials claim LUS can offer phone, cable and Internet for about $85 a month, lower than rates charged by existing providers such as Cox Communications and BellSouth, both of which fought the LUS project in the legal system and in the court of public opinion.

Durel, a businessman who introduced the fiber initiative in April 2004, four months after taking office, described the win Thursday as a "slam dunk" because the state Supreme Court ruled unanimously in favor of LUS, without conditions.

The Supreme Court ruling settles a lawsuit filed in 2006 by Lafayette resident Elizabeth Naquin who argued that the bond ordinance LUS was following to sell bonds to build the project violated Louisiana's Local Government Fair Competition Act.

Naquin, who has never appeared in court during multiple lawsuits against LUS, was represented by Plaquemine-area attorneys. Neither Naquin nor her attorneys could be reached for comment Thursday evening.
Lafayette Consolidated Government, in the past three years, spent $3.5 million on the fiber-to-the-home project, including nearly $1.2 million in legal fees.

City-Parish Attorney Pat Ottinger said Thursday that no additional lawsuits challenging the bond ordinance can be filed because the time for doing so has expired.

Chief Justice Pascal Calogero Jr. wrote the 29-page opinion that reversed a 2006 Third Circuit Court of Appeals decision that stopped LUS from issuing bonds to build the fiber network.

Calogero's opinion states that the Local Government Fair Competition Act allows LUS to pledge revenue from its electrical, sewer and water divisions as a secondary guarantee of the bonds to build the fiber project.

Another section of the Act that prohibits LUS from using revenue from its electric, water and sewer divisions to subsidize operations of the communications/fiber operations was incorrectly considered by the appeals court, Calogero wrote. That prohibition only applies to subsidizing the fiber program once the fiber division is running, not during construction, he wrote.

Most of the arguments raised by Naquin's attorneys were posed after a legal deadline, the opinion states. But even if they were considered, they would have been ruled against, he wrote.

The state Supreme Court ruling clears the way for LUS to begin the process of selling up to $125 million in bonds to pay for the fiber project. The bond process could take up to three months, he said.

Once the bonds are sold, it may take up to 18 months before the first customers are using LUS' fiber, said LUS Director Terry Huval.

One year after the first customers are served, LUS must submit to an audit by the Legislative Auditor and Public Service Commission. At that time, additional "attacks" are likely, Huval said.

Fiber was promoted by Durel and economic development leaders as a tool for attracting technology-based companies that may bring high-paying jobs to Lafayette.

"This levels the playing field with big cities that have fiber, and our technology community can compete," said Gregg Gothreaux, president and CEO of the Lafayette Economic Development Authority.

With fiber capabilities, Lafayette can become the place where businesses come to test new ideas, he said.
Stephen Handwerk, president of AffordableConsulting. com, envisions video game developers conducting real-time tests of peer-to-peer gaming using the fiber network. Lafayette also can become a "branch location" for Hollywood, he said.

"Newsgroups are going crazy right now. Businesses are watching. They're not going to wait to build or relocate here until fiber is deployed," Handwerk said. "They're going to come here now."

Richard Warren, part of a large grass-roots campaign, Lafayette Coming Together, that campaigned for the fiber project, said he hopes entrepreneurs benefit from the fiber initiative.

But more importantly is that low-income residents have affordable access to high-speed Internet, particularly for educational purposes, Warren said.

Bridging the digital divide that separates those who can afford high-speed Internet service at home from those who cannot was one of the benefits cited by officials touting the fiber project.

Walter Guillory, executive director of the Lafayette Housing Authority, praised the tenacity of Durel and others in city-parish government, but said he plans on holding officials to those promises.
Originally published February 23, 2007

HOME

John Rowland/jrowland@theadvertiser.com

City-Parish President Joey Durel is all smiles during a news conference at City-Parish Hall on Thursday about the Louisiana Supreme Court's ruling in favor of Lafayette Utilities System's fiber-to-the-home plan, as LUS Director Terry Huval looks on.

When can I get it?
  • Bonds may be sold within 90 days.
  • Eighteen months after the bonds are issued, the first LUS customers should be using fiber for telephone, television and Internet.
  • One year after first customers connected, an audit will be conducted by Louisiana Public Service Commission and Legislative Auditor.
  • Three years after first customers connected, everyone in the city who wants fiber should be connected.
    SOURCE: LUS Director Terry Huval, City-Parish Attorney Pat Ottinger


  • What has it cost?
    Legal fees paid in association with the Lafayette Utilities System fiber-to-the-home initiative, 2004-06:
  • Baller Herbst Law Group, $316,748
  • Kean Miller et al, $304,124
  • Milling Benson Woodward, $275,965
  • Ottinger Hebert LLC, $192,160
  • McGlinchey Stafford P., $64,118
  • Spiegel and McDiarmid, $24,441
    Total: $1,177,556
    Costs associated with the July 2005 fiber election:
  • $61,988, Louisiana Department of State
  • $2,901, Lafayette Parish Clerk of Court
  • $1,637, Louisiana Secretary of State
  • $200, State Bond Commission
    Total: $66,726 (plus legal costs that were not separately calculated)



  • Who got the work?
    Ten companies receiving the most work from the fiber-to-the-home project:
  • R.W. Beck (engineers), $1.2 million
  • CCG Consulting (feasibility study), $446,720
  • Graham Group (public relations/marketing), $321,832
  • Baller Herbst Law Firm, $316,748
  • Kean Miller (law firm), $304,124
  • Milling, Benson, Woodward (law firm), $275,965
  • Ottinger Hebert (law firm), $192,160
  • Haynie and Associates (lobbyist), $130,000
  • McGlinchey Stafford (law firm), $64,118
  • Department of State (election costs), $61,989
    SOURCE: Lafayette Consolidated Government
  • ADVERTISEMENT