Sticker Shock LUS’s commercial gigabit bandwidth pricing appears to reinforce a gap the service was meant to close.

by Mike Stagg

Executive coaching specialist Fred Reggie
Photo by Robin May

Fred Reggie has been incorporating more video into his executive coaching business and decided to look into a bandwidth upgrade from his 10-megabit-persecond basic LUS Fiber service to take some of the time out of the video uploading process.

Reggie’s office is in Lafayette off Doucet Road. “I’d seen the ads and the information on the LUS website about gigabit residential service being available for $89.95, so I decided I wanted to upgrade to gigabit level service at my office,” Reggie says. A gigabit means a network can move 1,000 megabits of data each second.

He called LUS Fiber to see about getting the service and was hit with a severe case of sticker shock. That $89.95 gigabit service available to residential customers (with two LUS services) would cost his business, Fred Reggie Associates, $500 per month, or a cool $6,000 per year.

The LUS customer service rep couldn’t give Reggie a reason that justified the huge jump, so he took his frustration to his personal Facebook account at the end of 2016:

LUS, what are you thinking?? Okay, it’s time for a serious rant regarding LUS Internet pricing!

I have a business account with LUS and currently pay $74.95 per month for my internet service at my office. The upload/download speed is 10 Mbps. Today, I called to express my interest in upgrading to 1000 Mbps (1GB) after seeing on the LUS website that the rate for that speed would be $89.95 (with two LUS services - I have phone and internet). The representative I spoke with informed me that for “business” accounts the cost would be $500.00/month - you read that right, FIVE HUNDRED DOLLARS!!!

She said that business accounts were more because when there is a problem or outage, they receive priority service. So I should pay a $410 premium per month or $4,920 per year to have the same feature I could have at a residential address for 15% of that rate.

I am a one-man business using one computer. How can LUS justify this and why is there not a visible cry of outrage over this gouging? How can the Public Service Commission turn a blind eye to this? I’m sure there are others much smarter than I who can offer some rationale.

This appears to be bureaucracy at its best! Reggie does not live inside the city, so he could not get the gigabit service at home and transport files there from his office to upload on LUS’s symmetrical bandwidth network. (Upload and download speeds are the same on LUS’s fiber network, unlike services offered by commercial carriers that have fast download speeds but slower upload speeds.)

The pricing and the encounter with the LUS customer service rep reminded Reggie of encounters with large corporations rather than his hometown-owned bandwidth provider.

“It struck me as something like AT&T would do,” Reggie says. “You know, ‘We are the phone company and we can do it, so we will.’” Reggie also finds it troubling that the LUS customer service rep could not direct him to a higher authority to appeal the pricing issue.

“That means there is no customer service manual,” Reggie says. “It means you’re stuck.”

LUS Director Terry Huval does not deny the pricing figure quoted to Reggie by the LUS customer service rep, but says the municipally owned fiber company does not advertise commercial rates as they do residential rates.

“Those rates are subject to negotiations, which can involve building access issues, network access issues and other factors that can affect our ability to deliver services,” Huval says.

But, from a service delivery standpoint, Huval concedes that there is no difference between the gigabit of service provided to residential customers and the service provided to commercial customers ranging from sole proprietorships like Reggie’s to multi-national corporations with operations in the city.

“What’s different, though, is the level of usage,” Huval maintains. “In larger operations with more employees you’re likely going to have more network usage and traffic. The challenge for us is setting price points that keep us competitive in the market while enabling us to remain viable as a business.”

Those points, though valid, suggest a market strategy that is more in line with corporate providers than a community-owned network competitor with obligations beyond its bottom line.

The one-price-fits-all corporate pricing on gigabit service appears to discriminate against small businesses and entrepreneurs, flying in the face of the premise on which the LUS Fiber project was sold to the community.

Numbers provided by the Lafayette Economic Development Authority show that small businesses are the norm rather than the exception in Lafayette Parish.

“According to ReferenceUSAGov, an online database, there are currently [as of Dec. 6] 16,243 businesses in Lafayette Parish,” Brittany LaCour Deal of LEDA says in an email. “Of those, 15,775 (97 percent) have fewer than 50 employees and 14,900 (92 percent) have fewer than 20 employees.”

Deal says she is not aware of any listing of entrepreneurs or sole proprietors in the parish.

As Reggie has since learned, bandwidth rates — whether LUS’s or those of its competitors — are not subject to regulation. They are at the whim of providers and what they think the market will bear.

Like the recent so-called “solar tax” fiasco, though, the fact that LUS has no readily accessible channel for communications with residents on policies and pricing means that decisions on bandwidth pricing — like net metering — are made in the isolation of its headquarters. (Read more on that issue in the November ABiz story, “LUS ‘solar tax’ points to larger issues with the local utility.”) Some issues are apparently not considered. For instance, could a tiered commercial gigabit grade service be made available, based on business size? Are the bandwidth needs of major engineering firms the same as small agencies producing video?

What mechanism would small business owners use to put ideas like this up for consideration before LUS Fiber’s leaders? None presently exists.

What does exist is the reality that $6,000 a year is relatively small change to large companies but a huge hurdle to small ones. LUS’s bandwidth pricing is reinforcing a divide the community had hoped — and LUS said it intended — to close.