If you just skimmed LUS Fiber’s Comprehensive Annual Report, you might come away with the impression that things are going great over there. LUS Fiber’s physical infrastructure is in good shape, its financial health is strong, and it’s embarking on grant-funded expansions in all directions.
But read a little deeper and a more troubling picture emerges. One where LUS Fiber isn’t flying high but instead has taken on a series of unprecedented risks that threaten the present and future of this public enterprise.
You can read the full report, which includes detailed information about LUS as well, here. Or, if you don’t want to pore through hundreds of pages of bedtime fodder, here is what I’m worried about.
LUS Fiber isn’t growing
While the report states that “[LUS Fiber] continues to show notable positive customer growth each year,” it also includes this table:
| Fiscal Year | Number of Customer Accounts | Increase in Customer Accounts (%) | LUS Fiber Total Passings | Increase in LUS Fiber Passings (%) | LUS Target Market Share |
|---|---|---|---|---|---|
| 2019 | 21,291 | 4.3% | 51,452 | 1.2% | 41.4% |
| 2020 | 22,053 | 3.6% | 52,011 | 1.1% | 42.4% |
| 2021 | 22,735 | 3.1% | 52,543 | 1.0% | 43.3% |
| 2022 | 23,210 | 2.1% | 53,022 | 0.9% | 43.8% |
| 2023 | 23,237 | 0.1% | 53,460 | 0.8% | 43.5% |
Note how LUS Fiber’s increase in customer accounts has shrunk every year for five years running. And last year it dropped all the way to 0.1%. Fiber literally added just 27 accounts over the course of an entire year.
This poor performance is reflected in its revenue numbers too. Fiber missed its $44.8 million budgeted revenue target for retail sales by $2.8 million. Of course, these results shouldn’t be surprising given that …
LUS Fiber isn’t marketing enough
You might think I’m exaggerating, but check this out from the report: “It has been several years since the last marketing campaign was launched; however, LUS Fiber is in the process of launching one in FY 2024 in an effort to recapture some of the market share that it has lost over the last year while also growing into the new areas that are being build [sic] out too.”
Let that sink in for a moment. The public business everyone who lives in Lafayette owns hasn’t been adequately marketing itself and as a likely result hasn’t been growing like it should. And as another result has created a multi-million dollar hole in Fiber’s budget. Though part of that hole has been filled by the fact that …
LUS Fiber doesn’t have enough people
Again, this may sound like hyperbole, but I’m speaking literally. Of the 83 positions authorized for LUS Fiber in the budget, only 63 of them are filled. So at a time of unprecedented expansion outside of the parish and stagnation in Fiber’s core markets, one in four desks at Fiber is empty.
Making matters worse is this gem: “LUS Fiber has vacancies in its current management structure. These roles have been vacant for multiple years and filling them has become a top priority.”
That’s right. After former Mayor-President Josh Guillory ignored the advice of Fiber’s consulting engineer at that time and hired Ryan Meche instead of restarting the search for a more qualified director, most of Fiber’s more experienced staff and all of its senior managers left.
Then, over the last few years while Fiber has been run by someone with zero previous senior management experience, the past administration just left the senior manager roles empty or filled them with never-ending interims.
Now, amid the frenzy of grant-fueled expansions: “As the system expands outside of Lafayette, operating expenses will increase proportionality. LUS Fiber will need to actively expand its staff in FY 2024 and plan for increases in operating expenses in multiple categories.”
So Fiber not only has to fill 25% of its current team, it also has to hire a bunch of new people. Oh yeah, and apparently part of why there are so many vacancies is because Fiber’s not offering market rates in what has become a very competitive job market. So all those new people are likely going to be more expensive, putting further stress on Fiber’s finances, especially at a time when …
LUS Fiber has taken on tremendous risk
Not to beat a dead horse, but these expansions are hugely risky. Not only are we spending millions stretching a skeleton crew across an area larger than the state of Rhode Island, but the expansions themselves carry a ton of risk.
There’s the market risk of how many people will actually sign up for service. Many of the areas Fiber’s building out are very poor. And the federal broadband subsidies for the poor just ran out of money. In the report, Fiber projects connecting 5,000 to 7,000 new customers through the expansions. But insiders I’ve spoken with think Fiber’s more likely to only connect 1,000 to 2,000 new customers.
There’s the operational risk of managing a bunch of glass fibers strung between electrical poles in the middle of hurricane country. LUS Fiber is self-insured, meaning when a storm hits, Fiber is on the hook to pay to repair any damage that’s done. So now we have radically increased the area where Fiber’s at risk financially. A single storm could wipe out any potential net profit from these expansions for decades to come.
But wait, there’s more, because …
LUS Fiber may be riddled with malfeasance
According to Lafayette Consolidated Government’s annual audit, which was also released last week, some shady stuff may be happening at Fiber. Multiple people were given free or reduced cost services. Almost 80 Amazon Fire sticks have gone missing. Someone even bought a PlayStation 5 that can’t be accounted for. And this is what’s been found before any real investigation has been done into what has actually been going on at Fiber.
The new administration needs to get to the bottom of this mess to ensure that any potential corruption has been rooted out. Especially with Fiber’s new director starting this week and since …
LUS Fiber has a lot of work to rebuild what’s been lost
As a big supporter of Fiber, it’s hard not to get melancholy when I think back on how far we’ve fallen. Several years ago — before former Mayor-President Joel Robideaux tried to sell LUS and LUS Fiber and then hurled false accusations of illegal subsidies causing the early retirement of longtime Director Terry Huval and before former Mayor-President Josh Guillory hurled false accusations of deleted emails and appointed a Fiber director who Fiber’s own expert deemed underqualified — Fiber was in pretty good shape.
The network was working. Most of the roles were filled by capable, experienced people who were committed to Fiber’s mission. Fiber was growing slowly but sustainably. All Lafayette needed was to stay the course and everything likely would have been good if not great with Fiber.
Instead, as a community we have made a series of missteps that put the future of Fiber at risk. Thankfully, it’s not too late to save it. I still believe in Fiber, and its future can still be bright. While I haven’t yet met the new director, Michael Soileau, I’m hearing good things about him. He brings private sector experience that may be exactly what our public enterprise needs to navigate its way out of this mess we’ve created.
But we need to stop pretending everything’s fine at Fiber and start the hard work of recovering from the last few years of mismanagement.