Lafayette, Louisiana’s city-owned fiber network, LUS Fiber, has a lot to celebrate. The city first proposed fiber as its fourth utility in 2004, and citizens voted 62% – 38% in 2005 to approve bond funding. Since then, Lafayette has overcome numerous significant legal hurdles, successfully building out the system to bring 100% fiber-optic access to the city without spending one dime of taxpayer dollars.
To Terry Huval, the Director of the Lafayette Utilities System (LUS), the network’s greatest success is its ability to serve a “pent-up” demand in the community. “It’s easy to see the enthusiasm from citizens and businesses,” he says, “when customers attend the same baseball games and shop at the same grocery stores as their internet service provider.”
Not only is LUS Fiber serving its neighbors with a very high-quality service, but the network is sparking positive economic development throughout the region. The network has helped grow the local economy, previously dependent on oil and gas, into a diverse ecosystem that includes several new tech companies. For example, Tapes Again, a media production company, announced in 2013 that it was relocating to Lafayette in order to take advantage of the network, and three additional tech companies committed in 2014 to bring 1,300 new jobs to the area.
The robust network has given the city a chance to better serve its residents. Most recently, the city installed smart meters for its water and electric systems. The smart electric meters provide real-time recording of electric usage, with data that is made available to both LUS and the customer, allowing the customer to monitor and adjust electric usage. During a recent and highly unusual deep freeze, the city was able to use its fiber connectivity to open certain valves at its water towers only when necessary to provide the Fire Department adequate water pressure to fight fires. The smart meter system offers new services for residents, too: the meters will let a resident know within 24 hours if there has been an uncharacteristic use of a utility in their home. This allows customers to know if they have an undetected water leak before they receive an unusually high water bill.
It’s the electric utility that benefits the most, says Huval. Monitors have been put in place that alert the city when the electricity goes out. This allows the city to get the lights back on as quickly as possible, which is a huge benefit to businesses. The average length of a power outage in Lafayette is ¼ the state’s average, which saves businesses and residences in the city an estimated $25 million per year.
LUS Fiber is saving Lafayette residents money in more ways than one. A recent report out of Harvard’s Berkman Klein Center for Internet and Society ranked LUS Fiber first in the nation for price savings when compared to local competitors. “Our customers and supporters are aware of the positive impact LUS Fiber continues to have in Lafayette,” Huval said. “This study brings nationwide recognition of our dedication to providing our community the best services, at the best prices. Being ranked No. 1 in the country for cost savings is a distinction that we at LUS Fiber are honored to bring to Lafayette.”
Another significant achievement for the network has been achieving cash-positive status. Louisiana state law prohibited the city from using any state or utility money to build LUS Fiber, so the utility had to borrow the money and build the network from the ground up. “We had to borrow money and earn revenue just like a regular business,” says Huval. For the first several years the project was in debt, but Huval wasn’t fazed. “You can’t build out the infrastructure without spending a lot of money, and you aren’t going to get return on that investment until you have time to grow your customer base,” he says. “This isn’t a short-term fight.” The city’s investment paid off, and the network achieved cash-positive status in 2012. In 2017, LUS Fiber turned over $5 million in profit and is projecting even larger profits this year. LUS Fiber is using these profits to expand its system beyond Lafayette and into other nearby areas.
The investment is nearly “future-proof,” too: the system was first built to offer 100 Mbps, but was later upgraded to a 1-gig network. Now, the city is looking to upgrade to a 10-gig system, increasing the network’s current capacity by tenfold for roughly 3% of the original cost.
Other communities that are looking to build their own networks should combine a dream with a healthy dose of reality, says Huval. “It’s tough to build a system like this from scratch, even in the best circumstances. It’s not for the faint of heart.” A city has to be prepared to work through challenging financial and political situations, he warns. He suggests assembling a team with heart and soul, and working hard to gain community trust. Finally, he advises, have faith in the impact of a well-built network: “When the new company is bringing in new jobs to the community, it’s a win – even if it is only breaking even financially.”
Nine years after serving its first customers, LUS Fiber has a 42% take rate in its service territory and is growing every day. Lafayette hopes to continue to embrace its smart city capabilities, specifically to develop a police department initiative that uses smart cameras to help its police department. In addition, the city has its eyes on smart street lights, smart traffic controls, and new safety features for the public, such as brightening street lights when an incident has occurred.
In the end, Huval credits much of the network’s success to grassroots community support and the hard work of LUS Fiber. “From the beginning, Lafayette’s citizens understood that this was about more than just downloading pictures.”