BellSouth Lawsuit in the News

The Advertiser and the Advocate both carry stories this morning on yesterday’s ruling against BellSouth. As I noted in a post last night, the judge found BellSouth’s strained understanding of the word “pledge” and its insistence that LUS’ enterprise had to go into default in order to meet its pledge incorrect. He noted that the (un)Fair Competition Act puts no limit on the ways a debtor can contract with a creditor to pay off their debt–and that the bond ordinance is essentially such a contract.

With that Conque points directly at the heart of the matter that so worries BellSouth: The contract under which the bonds to support LUS will be issued. State law and the state constitution priviledge contracts with bondholders to such a degree that it will be impossible to attack the business practices that are codified in the bond ordinance after the bonds are sold. A lot of doors close for BellSouth in terms of damaging LUS after that occurs. On a number of topics this is their last chance to gain an unfair advantage. Chief among those advantages are that BellSouth and allies want to drive up the costs of this project in direct defiance of the law (un)Fair Competition Law BellSouth originally authored. That law authorizes LUS to “pledge” its assets with the express purpose of lowering the interests costs charged by investors buying the bonds. That is the whole purpose, as declared by the legislature, of that clause. As we all know the largest expense of a project like this will be, not fiber or even the installation costs, but interest paid by LUS and eventually by the people of Lafayette. BellSouth’s challenges are transparently designed to drive up the interest prices paid by Lafayette and that is exactly what the legislature was trying to avoid in the clause that BellSouth transparently misinterpreted.

(I hope it is clear to all that the specious rationales offered by BellSouth during the election that they welcomed competition and were only concerned to “inform” voters about the “risks” of LUS’ plan was dishonest. If there remained any doubt in the public mind the continued attempts to manipulate the situation at Public Service Commission and in multiple lawsuits should make it clear to any citizen that the corporations are merely trying to thwart the emergence of effective competition.)

Legal points aside what was most fun in the Advocate article were the quotes from Lafayette officials. —Strangely the local Advertiser doesn’t bother with talking to local officials; it’s odd to have to go to the Baton Rouge paper for a Lafayette response to the good news.

From the city attorney:

City-Parish Attorney Pat Ottinger, who argued the case for Lafayette earlier this month, said Thursday that Lafayette officials are “delighted” with the decision.

“The judge’s written opinion supports our contention that further legal action from BellSouth is unwarranted,” Ottinger said in a statement. “These endless tactics of legal filings, court hearings and appeals are designed only to delay and run up unnecessary costs to the taxpayers.”

From the LUS director:

LUS’ communications project has been approved by the voters, the City-Parish Council, the Legislature, state Public Service Commission, the state Public Service Commission and “now a court of law,” LUS Director Terry Huval said in a statement.

“The citizens of Lafayette are fed up and frustrated with the roadblocks being erected by BellSouth. It is time for BellSouth to end their tactics of delay that have already created needless costs for the taxpayers of our community,” Huval said.

I think Huval is correct on this…I was at a digital divide meeting last night where I had to push to get the agenda back on track after a conversation in which people were advocating picketing BellSouth. It’d be a lot easier to move on to more useful things if BellSouth and its allies would quit trying to frustrate the desires of their customers.

But BellSouth, as the articles make clear, has promised more lawsuits. I’ll be surprised if they don’t appeal yesterday’s spanking and BellSouth has said that they intend to appeal the PSC ruling against them. It’s all pretty ugly. And pretty small. Enough is enough.