In the News

Published April 1, 2005

Court Says FTTH Plan Requires Vote

A Louisiana court has ruled that the city of Lafayette acted improperly when it approved a $125 million bond issue to fund a municipal fiber to the home (FTTH) system.

The ruling resolved a lawsuit filed by BellSouth, Cox Communications, and Fiber411, a local citizens group seeking a voter referendum on the controversial plan.

Nationwide, municipal fiber advocates and opponents alike are closely watching the Lafayette FTTH project, one of the most expensive municipal broadband systems proposed so far. The Lafayette Utilities System (LUS), which proposed construction of the network, originally pegged the project’s cost at $100 million. LUS raised that projection in December to $110.5 million. In plans provided to the city council in February, LUS requested an initial bond issue of $125 million, plus authorization for a further $10 million should it be needed to complete the system.

The plan calls for loans to be repaid by revenues from the anticipated “triple play” of cable TV, phone, and Internet services LUS will offer. If those revenues fall short, LUS will have the right to cover the shortfall first from its cash reserves. If reserves are not enough, LUS will be permitted to raise electric, water, and sewer rates. In previous statements, LUS had said its utility customers would not be liable for overruns or shortfalls if the FTTH system failed to meet its goals.

Skype Seeks Retail Channels

Skype, the Luxembourg-based Internet telephony applications provider, has teamed with Xandros, a Linux desktop developer, to sell an Internet telephony software package through online retail channels such as and

Skype offers a free, downloadable Internet telephony application for PCs. Two Skype users with broadband connections can use their PCs to talk to each other, no matter where they are in the world, without further phone charges. The deal with Xandros, which will lead to greater exposure among everyday Internet users, could be a boon to Skype and further accelerate the uptake of Internet telephony and voice over Internet Protocol (VoIP) services.

Endangered: The Dorm Phone

The near-ubiquity of cell phones on campus has some universities thinking about eliminating wireline phone service in their dormitories.

“Almost every major school is evaluating it,” Jeri Semer, executive director of the Association of Communications Technology Professionals in Higher Education, told the Washington Post.

Morrisville State College in New York State and Marshall University in West Virginia now offer students cell phone accounts rather than wireline phones, the Post reported. George Washington University, the University of Maryland, and University of Virginia are also evaluating phone options.

Dorm phones were once a cash cow for local phone companies, long-distance companies, and universities. American University in Washington, DC, for example, once made hundreds of thousands of dollars a year from reselling long-distance service, the Post reported. Now, nearly 100 percent of its students use wireless services, which bundle long-distance and local prices with popular applications such as text messaging, games, and downloadable ring tones. With cell phones now the device of choice, AU’s one-time phone windfall has slowed to a trickle of $1,100 a year. It costs the school $100,000 a year to maintain the dorm-wide wireline phone system, officials said.

Firefox Forces Microsoft’s Hand

Microsoft Corp. has reversed course and will deliver a stand-alone upgrade to its Internet Explorer browser later this year, abandoning plans to bundle the upgrade into its new operating system, not due for release until 2006.

The decision comes amid a 5 percent slip in Explorer’s market share, mostly a result of the sudden popularity of Firefox, an alternative browser developed by independent programmers who are part of the nonprofit Mozilla project. Firefox 1.0 became available in fall 2004, and Mozilla reported 5 million downloads by the end of the year.

Users cite as a key attraction Firefox’s superior security features, which they say block spyware, pop-up ads, unwanted Web site redirection, and unwanted changes in browser preferences better than Internet Explorer.

Steven Titch ([email protected]) is managing editor of IT&T News and The Heartland Institute’s senior fellow for information technology and telecom policy.