Month: March 2006

There’s another wrinkle in the set of Louisiana bills being offered by the Acadiana delegation to overturn or substantially modify the notorious Local Government Fair Competition Act. One of them, HB 537, might look at first glance like it just adds the names of new sponsors to HB 257. The lineup of Representatives Robideaux, Pierre, Trahan, and Alexander and then Senator Michot, gives it more weight. Their names on the bill helps. My first take was that adding heft to the bill was the point.

But I was wrong.

HB 537 doesn’t just grandfather Lafayette out of the (un)Fair Competition Act and provide a full wireless exemption for Louisiana localities, 537 effectively repeals all of the act except for the referendum provisions for any local government whose people vote for telecommunications in the way described in the Act. Here’s the deceptively simple change; in the originally filed bill, HB 257, description of the “scope” of the new law you find that it won’t apply to any local government:

(2) Which has held an election on or before August 15, 2005, pursuant toR.S. 45:844.50(A)

That would have excluded Lafayette (but only Lafayette). HB 257 cuts the August 15th bit:

(2) Which has held an election pursuant to R.S. 45:844r

The law and all its obnoxious and anti-municipal bits that force prices higher and impose absurd conditions on the operation of public utilities remains on the book but no longer applies to anything that can actually happen. –A city must vote to offer the service and no city which has voted will have to follow the rest of the provisions of the law. (Readers with a long memory may recall that this is basically the same strange way that the anti-muni “Broome bill” was gutted. [1,2,3])

This amendment basically repeals all but the feasibility study and referendum parts of the law. (Check the difference in the “scope” section, by eliminating language about August 15th it effectively widens the exemption to all municipalities, not just Lafayette.) This is almost surely the bill that Acadiana will ride forward with. It will be a perfect fit with the rhetoric of self-determination.

I can still wish for full repeal…Lafayette dodged the bullet of a vicious, full-scale, incumbent campaign during the referendum only by making it clear that the community and its officials both were willing (and even eager) to match every attack from the incumbents with a fast, hard return that emphasized local pride and lambasted “out of state monopolies.” BellSouth and Cox, used to casual intimidation of little local guys, got none of the fawning respect they are usually able to count on as a consequence of their proven political power and enormous wealth. After enduring an initial firestorm of response to their ugly tactics they flinched during the homestretch.

Lafayette is unique in many ways–and lucky to boot. No other community ought to have count on having the resources and fortune Lafayette did in order to do what’s right for their people. We elect representatives we trust to do the research we as individuals don’t have the time or inclination to do. Utility decisions are exactly the sorts of technical decisions that we elect representatives to make for us. There is no reason to make a referendum issue out of this particular decision unless it is to make it more difficult to offer competition to the incumbents. That isn’t a good enough reason to single out telecom decisions. (A city could decide to offer electricity without all this bowing and scraping in the direction of incumbent monopolies.)

Still, this is not bad law, all told. The feasibility study and referendum requirements are enough to concede to power and campaign contributions.

You might want to congratulate the guys while they’re doing good: Representatives Robideaux, Pierre, Trahan, and Alexander; Senator Michot

Lagniappe: HB 244/SB 192, the “Poison Pill” bill would apply the governance provisions to “subsidized” private providers. If it were to pass first and then this “Referendum & Wireless Exemptions” bill were to pass the result would be to effectively turn the table on BellSouth. The onerous, absurd restrictions BellSouth intended to apply only to public utilities would suddenly apply only to them. As we used to say on the playground: “Turnabout is fair play.” Sly.

A guy can dream….

State Legislation Department, repeal!!

Here’s a fellow who doesn’t think that TV is going to be replaced by DV (Downloadable Video) any time soon. He has a point–for anyone who’s relying on the Cable or Phone companies for their broadband.

He is worried about how far short the stated plans of the incumbents fall of the capacity that widespread DV will require. Says he:

I tried to address the expectation that the telcos are rapidly rushing in to meet this need and to provide competition for cable incumbents. In fact, by their own best estimates, they’ll be able to reach no more than 40% or so of American households with fiber over the next seven years.

And most of that will be in the form of hybrid fiber/legacy copper networks, such as that being constructed by AT&T under the banner of “Project Lightspeed…”

More importantly, in 60% of the country, there are simply no new networks on the horizon, and the existing infrastructure from the telcos — DSL running at speeds of just 1.5Mbs or so — simply won’t be adequate to be considered “broadband” in five years or so.

There are ways around this, and the comments do a good job of pointing out what they are.

But it’s pleasant to realize that this, at least, is not something we have to fret over in Lafayette.

Well, there’s a crowd of telecom bills wandering the halls of the state legislature ready for the session to open on Monday. Here is a pregame list of the players. They range widely from bills that would repeal the Local Government Fair Competiton Act, to ones that would extend it to private companies, to ones that would provide various exemptions. There’s also a bevy of emergency preparedness bills and a set of bills that would transfer municipalities rights to control their rights of ways through franchising agreements to the state.

It’s hard to know which bills will actually turn out to be important but with this list you can try and keep track as game advances. We’ll be most interested in those that directly effect municipal issues like Lafayette’s fiber-optic project, New Orleans’ WiFi system, and state franchise attempts. I’ll try and do occasional updates to this list and a fuller post/summary of individual bills contents and implications.

Typically the bulk of bills are prefiled–meaning they are officially registered in advance of the session. Prefiling of bills has closed but each legislator can put forward five more before April 18th, so we’ve likely not seen the last of them.

Here is the current list:

• HB 244, Robideaux, SB 192–Michot, Poison Pill, Would apply most of the rules that apply to municipal telecom entrants under the Local Government Fair Competition Act to “subsidized” private telecom providers. (Prefiled)
• HB 245–Robideaux, SB 495–Michot, Repeal!!, Would Repeal the Local Government Fair Competition Act. (Prefiled)
• HB 257, Robideaux, SB 243–Michot, Exemptions Would exempt Lafayette from the Fair Competition Act and exempt all wireless technologies. (Prefiled)

These three have been covered in these pages previously. But there is another batch that, for now, I’ll just list. More later….

• HB 537, Robideaux, Exemptions Redux, Would exempt Lafayette from the Fair Competition Act and exempt all wireless technologies. (Prefiled) [This version of the bill has several Acadiana co-sponsors: Representatives, Robideaux, Pierre, Trahan, and Alexander as well as Senator Michot]
• SB 211, Murray, Wireless Exemption, Would exempt all wireless technologies from the Fair Competition Act. (Prefiled)

• SB 386–Ellington, HB 699–Montgomery, State Video Franchise-panel, Would eliminate local video franchises and vest control in a panel appointed by the governor. (Prefiled) [co-sponsored by in the Senate by Smith]
• HB 258, Farrar, State Video Franchise-PSC, Would eliminate local video franchises and vest control in the Public Service Commission. (Prefiled)

• HB 540–Burns, Emergency Preparedness, Would mandate the development of a an emergency preparedness system. (Prefiled)
• HB 619–Burns, Emergency Preparedness–Coastal, Would mandate the development of a an emergency preparedness system in coastal regions. (Prefiled)

Louisiana Legislation Dept.

New Telephony posts an article today giving additional detail to the story on BellSouth, Wireless, & New Orleans I posted earlier today. Based on presentation N. O. CIO Mefferet made at a Voice Over Network Conference in San Jose, the piece makes clear that the city is confident that BellSouth is attempting to block its WiFi network.

The article recounts a good bit of the heroic story of getting an operations center back online after the storm and the role wireless technologies and plain old geekery played in patching together some semblance of a communications and control network. It’s inspiring stuff.

But a large part of to the tale concerns the smoldering resentment of BellSouth. The telecom giant, on Meffert’s account, is unrelenting in opposing anything that might someday cut into a profit it might claim. Meffert says:

Although the Wi-Fi network today is critical for the city’s functioning, and Meffert is looking for sponsors, such as Google Inc., to expand it to 100 percent of the city, he reports that BellSouth has opposed the city’s development of the network.

“They say I’m going to compete with them, that government shouldn’t compete with the private sector and that we will be using federal funds,” said Meffert. “We will not go above 512k, which is not a huge network pipe. We are not going into the cable business and the network business, not competing with any of that, and they think we are. They told me that to my face.”

There is a law in Louisiana, passed about a year ago, that bars municipalities from competing commercially with private interests for communication services…

That municipal network legislation includes an exception in emergency situations. According to Meffert, there is now an effort in the state legislature to end that exception, which would force the city to close down its network. “Our lobbyists are saying they politically will succeed,” said Meffert. “We put in legislation to open a window for 512k, and it was killed before it went to committee.” Meffert says, no matter what the state legislature does, the city leadership will not turn off the network because too many citizens depend on it.

Meffert is talking about bills that were shot down in the special session and about bills that are being proposed now for the upcoming regular session. He’s also, IMHO, conceding too much upfront. New Orleans went to the legislature hat in hand, humbly asking for the crumb of being allowed to keep its emergency system going in the face of extremely slow rebuild by BellSouth and a publicly announced doubt by the company that all its old infrastructure would ever be rebuilt. BellSouth and its lapdogs in the legislature simply slammed the door in their face.

It’s time for New Orleans to learn what two years of battle have taught Lafayette: there’s no getting along with these guys. They don’t keep their promises and they’ll lie shamelessly. I have no doubt that when Meffert says that they’ve told him some pretty ugly stuff to his face that he’s telling the truth. On the other hand there are plenty of reason to disbelieve the public pronouncements of BellSouth; BellSouth’s denials fit a well-established pattern.

Meffert and the city of New Orleans would be best served by an aggressive, public attack on BellSouth and BellSouth’s law that prevents them from serving their people. This sort of attack is what worked in Lafayette and led to our referendum victory. Private discussions and quiet legislative entreaties are utterly useless with these guys. The current flurry of net commentary on Meffert’s VON talk make it clear how easy it would be to pursue this course and how sympathetic the public would be. New Orleans and the Acadiana delegation would make a potent and hard to ignore lobby in the legislature. Somebody pulling in the folks in Lake Charles–who’ve done a lot with little help or attention–would make it a solid coastal Louisiana trifecta.

New Orleans should fight for complete freedom. It shouldn’t settle for a puny 512K network deliberately crippled to accommodate BellSouth. If New Orleans is to have the control of its destiny it so desperately needs, if it and not a handful of out-of-state corporations are to decide what sort of supporting infrastructure shapes its future, then it needs to have a horse in the race that has plenty of room to maneuver.

Repeal the law and watch Lafayette’s municipal system take off. Cox and BellSouth would suffer some real competition–which is all they really fear. If BellSouth and Cox pussyfoot around about providing services that New Orleans thinks are vital to its community’s revival Lafayette would prove a salutary lesson in what can happen if the incumbents don’t pay attention to community needs.

Repeal!!

Lagniappe:
Muniwireless covers the same VON talk.
The Wireless Report also has the story.

update:
The Red Herring Story, “Wi-Fi Fight Brews in Big Easy” with the subhead:
“City CIO says he’d rather go to jail than shut down the city’s free wireless network.” was the day’s # 4 story at digg.com when I checked in around 6:30

One of the few bright spots in New Orleans’ slo-mo recovery has been the widely praised free municipal WiFi network that has filled in the blank spots left by the slow rebuilding of the city’s telecommunications infrastructure. Articles from venues such as Forbes have praised the city’s verve and willingness to find creative ways to do for itself.

A lot of national attention has focused on the ability the wireless mesh network showed in bouncing back from the storm’s devastation. The traditional networks showed no such resilience and are still not able to support the city’s need as a quote (my emphases) from a recent ComputerWorld article shows:

…as the lone public communications system left in the city, it also carries VoIP traffic that is the lifeline for many city businesses, said the city’s CIO, Greg Meffert.

The storm wiped out wireline phone service and cellular networks…

“We still have a third to a half of the city blocked out for telecom and power,” Meffert said.

The mesh creates a Wi-Fi cloud over the downtown business district and the French Quarter, with the bandwidth segmented for public safety and public Wi-Fi…

He said the situation is likely to continue indefinitely because the traditional wireline phone companies say they will not rebuild in the city for a long time. “We’re letting this Wi-Fi technology become indigenous infrastructure to help bring the city back,” Meffert said.

He said businesses have no alternatives, so law firms are actually doing business over VoIP out of coffee shops, “as long as it’s in the cloud.”

Four months ago, the city population was 50,000, and now it’s 250,000. “The wireless network is part of what’s making them able to come back,” he said.

Given the fact that the wireless network is proving a workhorse in providing service where BellSouth can not or will not rebuild its been hard for many people to understand BellSouth’s well-documented and remarkably mean-spirited opposition to the city’s wifi network. (This is largely a matter of experience, folks from Lafayette have become familiar with BellSouth’s unwillingness to let a community do for itself what BellSouth refuses to do for them.)

It’s no secret that BellSouth has been pulling jobs out of New Orleans, that it’s rebuild effort has been slow to the point of obstructionism. A lot of that is explicable by assuming a cold-hearted business calculation that demands a certain size return on investment and doesn’t much value loyalty. You deal with large corporations with no organic ties to the community and that’s they way they think.

You’d think that same cold calculation would apply to the wireless network: what they don’t intend to supply they could leave to others without injury to themselves. Why do they buy themselves such bad press and political trouble if they don’t intend to do it themselves?

Because, it’s now revealed, the DO intend to do it for themselves. When they get around to it. And, astonishingly, as a product that would charge businesses extra for wireless as a backup to BellSouth’s slow repair of their primary, landline services. The city stepping in and quickly just making public property freely available is embarrassing. But the real issue is that BellSouth really doesn’t want the community to help itself cheaply if it foresees the chance to make a buck off the failures of its aging infrastructure.

From the Reuters story, BellSouth to test Wi-Max, sells wireless as backup:

“Coming into hurricane season, BellSouth is also starting to push its existing wireless service as a backup option to help businesses maintain data links between offices if services on the wired network are disrupted.

BellSouth, operating in nine southeastern states, used wireless technology last year to help provide communications in New Orleans after hurricane floods drenched the city’s wired networks.

‘There’s a higher level of customer interest in these solutions based on the hurricanes,’ said Michael Bowling, vice president for development at BellSouth.”

Astonishing. Part of this story is that BellSouth is just as willing to stand in the way of state efforts to build a wireless emergency network as it is to stand in the way of a municipalities like New Orleans or Lafayette doing so. A bill promoting a statewide wireless emergency system in the recent hurricane-themed special session of the legislature died, according to its author, because of “telecom” opposition. In Louisiana that really means one company: BellSouth.

BellSouth is not a good corporate neighbor. Their interests diverge from ours and they are not in the least afraid to promote their interests over ours. It’s time we recognized the reality of the situation and started acting as if we understood it.

This story from the Washington Post is really about the LUS fiber project and the (for now) hidden costs BellSouth’s legal tactics are imposing on our community.

Sure, on the face of it, the story is about federal health experts directing local school districts to prepare for the possibility of a pandemic of bird flu to strike the United States. But, it is also about what could be Lafayette’s secret weapon to dampen the social and economic impact of such a pandemic on our community should it strike.

That secret weapon is the LUS fiber project.

Here are key passages that hint at the challenges such a pandemic could cause:

Who coordinates decisions on closing schools or quarantining kids? If classes shut down for weeks, how will a district keep kids from falling behind? Who will keep the payroll running, or ease the fear of parents, or provide food to children who count on school meals?

Then there’s this from North Carolina:

In North Carolina on Tuesday, Education Secretary Margaret Spellings joined Health and Human Services Secretary Mike Leavitt to encourage schools to prepare. Spellings said schools must be aware that they may have to close their buildings _ or that their schools may need to be used as makeshift hospitals, quarantine sites or vaccination centers.

The biggest challenge would be how to keep the education process going during a state of quarantine:

Children age 5 to 18 tend to be the biggest spreaders of flu viruses in the community, experts say. Schools may be ordered to close to prevent spreading the disease.

In Massachusetts, school administrators are considering using an automated phone bank to announce homework assignments and update parents. Another plan would use the Internet for communication between students and their teachers.

Ah, there it is: “use Internet for communications between students and their teachers.”

The fact is that existing telecommunications infrastructure is not adequate to sustain heavy traffic for any extended period of time. See the report on the attacks of 9/11/01 and what happened in the wake of Katrina and Rita along the Gulf Coast.

As anyone who has ever communicated via email knows, it’s a poor substitute for face-to-face contact, particularly in relaying critical information. It’s a poor substitute because everything relies on how good one is at conveying information via typed words and how good another is at interpreting the meaning of those same words. Email is weaker than a phone conversation because in a phone conversation the listener can hear inflection and emphasis. Email is decent, but it is fairly ineffective because it is so ‘thin’ compared to the richer context of signals and meaning that get conveyed in a normal face-to-face encounter.

So, imagine the quality of, say, education when the sole communication between students and teachers is via email.

What the LUS fiber system offers Lafayette is a robust network architecture which could allow live streaming audio and video delivery of classroom instruction using the kind of rich media environment that can both engage students and convey knowledge to them.

According to the Lafayette Parish School System website, there are more than 30,000 students in the public schools in Lafayette. I don’t know what the number of students is in private schools, but let’s say there are another 10,000.

Could the existing telecommunications infrastructure in Lafayette support the delivery of remote instruction for the several weeks of sustained school closures a bird flu pandemic might require?

If that was all that was needed, one might argue that the network might be able to do it.

OK, so how will business be conducted? Face-to-face? During quarantine?

Other news stories have pointed to business leaders across the country considering telework responses to a bird flu outbreak.

Could all that education and business traffic be carried simultaneously over existing telecom infrastructure?

All the real world evidence we’ve seen in recent years about surges in traffic demand indicates that the existing infrastructure is not up to the challenge.

Communities will pay a dear price for this inadequacy.

But, Lafayette need not be left unarmed. The LUS fiber system offers Lafayette a clear path for a unique response through a network infrastructure second to none. Fiber to every home and business will deliver enough bandwidth for Lafayette businesses and educational institutions to continue to function in ways that will just not be possible in other communities.

This is what we voted for last July when we voted to approve the LUS fiber project.

This asset — this secret weapon — is just one thing BellSouth is trying to deny our community when they sue to kill the LUS plan.

Both the Advocate and the Advertiser have stories today on last night’s passage of the bond ordinance. (Clever, sly, canille ordinance!– on which more later.) A quick look at both stories is a good idea as they touch on various issues.

The Advocate exhibits a “what next” approach. Tracing out what LUS intends to do until the bonds are locked in… or BellSouth sues to stop their competition again.

The Advertiser also takes a look at the rate hike dispute that was recently revived. That’s a likely source of a lawsuit to try and halt the bond issue as BellSouth’s involvement is not immediately visible. And BellSouth might soon want a legal opportunity to try and interfere with the final adoption of the Bond ordinance which does not directly bear their name as plaintiffs.

The Advocate notifies us that we now enter an important waiting period:

Once this new ordinance is officially published in the newspaper, there will be a 30-day deadline for anyone to file suit to challenge its validity — sometime around the end of April.

And that, fair reader, is part of what you need to know to recognize the sly, canille part of the ordinance. The rest of the story can be found on the website of the Louisiana legislature:

So a sly aspect of the ordinance is the time when it was presented. It is presented at a moment when any lawsuit seeking to overturn it will have to be filed during the legislative session. I, for one, had wondered why LUS let such a long time pass between the 3rd circuit ruling and actually putting another ordinance to place before the council. The delay had been attributed to a desire to go over every dot and dash with a careful eye. I now suspect that at least as big a factor was that LUS and the city had a strategic moment in mind for introducing the ordinance. This moment.

We are less than a week out from the opening day of the regular session in which three (count ’em 1, 2, 3) bills have been introduced that will repeal or radically modify the Local Government (un)Fair Competition Act. If BellSouth or its allies are to sue yet again they will have to do it while three anti-BellSouth bills are being considered in the Legislature that are at least partially based on the idea that BellSouth and its allies prefer to file wild, unfair lawsuits instead of competing at all–much less “fairly.” The bills offer lush opportunities to point out how unfair the original bill is and how much damage BellSouth’s law is doing to south Lousiana in the wake of the hurricane.

BellSouth wants, badly, a chance to dip into Louisiana’s reconstruction funds for a subsidy to rebuild its networks. Recall that one of the bills ( HB 244) would force BellSouth to adopt all the restrictions its law unfairly imposes only on LUS if it accepts “subsidies” from the government. You can bet that BellSouth does NOT want to have to deal with questions during the hearings on whether it intends to ask for “subsidies” from Louisiana while it beats down projects in two of Lousiana’s coastal cities. Especially not while it is simultaneously trying to defend suing the city of Lafayette yet again.

Repeal is a real prospect; authors of the repeal efforts include the man who co-sponsored the original act and, in addition to Lafayette’s continuing anger, New Orleans is sitting out there seething about BellSouth’s attempt to shut down New Orlean’s free WiFi system so it can charge businesses for a similar but “backup” system. (More in a later post on this developing story.)

BellSouth will be forced to choose between adding fuel to fire of repeal by suing Lafayette yet again or standing aside while the bond ordinance gets locked into law. Once the bonds are sold it will be difficult, verging on impossible, to stop construction of LUS’ network.

That, my friends, is a fine definition of canille.

(You can get into the fun by penning a little letter, tapping out a little email, or placing a small call to your legislator supporting repeal and rumbling about the unfair tactics and greedy nature of BellSouth. —Addresses— The more folks express themselves, the more credible repeal becomes and the less BellSouth will want to risk an inflammatory lawsuit. No reason to let LUS have all the fun.)

Almost let this one slip by…and am grateful for a reader alert.

USAToday carried an interesting story on the front page of the money section Tuesday. I’m not sure how many legislators take the most widely read paper in the nation but I hope that lobbyists from Acadiana and New Orleans had the presence of mind to raid the coinboxes and hand out batches to the legislators. From the leading ‘graph:

More than half of New Orleans still doesn’t have phone or Internet access. But that isn’t stopping BellSouth from campaigning to shut down a free Wi-Fi service that has become a lifeline for thousands of residents, the city’s top technology officer says.

That should be enough to convence a few more legislator’s that Louisiana’s interests and BellSouth/ATT&T’s are not the same. (Though they could try just listening to their colleagues.)

But more interesting was the news that EarthLink has signed on to expand the service. Reportedly it will offer a free low-speed tier and a series of higher-speed ones for which it will charge. It will be interesting to how the deal is structured but I have to hope it doesn’t amount to a give-away of community resources–a concern that has emerged about a similar -sounding plan in Philadelphia.

USATODAY.com

Endless Delaying Lawsuits Department

The Advertiser’s version of this story quotes Pat Ottinger with all you really need to know about this story:

“It should not go unnoticed that the lawyers found it necessary to wait approximately four months after their prior lawsuit was dismissed, to file their complaint on the very day that the LPUA and the Council will take up the bond ordinance,” Ottinger said. “It stretches one’s imagination to think that this is a mere coincidence. It is obvious that this is yet another attempt which is designed to impede the will of the citizens relative to the fiber project.”

These are the same characters that joined BellSouth’s previous suit. The first question is “who’s paying?” You can bet it’s not the names at the bottom of the petition. It’s a question reporters and the council should ask. The obvious answer is BellSouth. Follow the money.

The Advocate’s version lays out some of the details of the complaint, the history of the complaint’s previous dismissal by the courts, and also notes that the LPUA (the city subset of the council that regulates LUS) is being asked to recluse itself by plaintiffs. A key detail is the complaint stretches itself to find a way to involve bond issues that have no discernable relationship to the allegations about rates that are at the core of the complaint. This will give BellSouth yet another path toward filing a delaying appeal. But this one will not rely on the (un)Fair Competition Act. If that act is repealed this challenge, however weak, can be fired up to provide a last line of defense for BellSouth against the threat of local competition.

It is abundantly clear that BellSouth understands that it will have the least capable network in Lafayette when LUS comes on line–and that in a battle between Cox and LUS the first casualty will be BellSouth Lafayette. So BellSouth is using it considerable advantages in lawyers and compromised legislators at both the state and federal levels to prevent open competition with better networks. Welcome, Lafayette, to the world of modern corporate “competition” where neither price nor service determine the outcome if sheer size or influence can be substituted. More proof, should more proof be needed, that this has never been about “free enterprise” but has always been about extending monopoly power.

Kevin Blanchard of the Advocate has a story in the this morning’s paper previewing tonight’s joint LPUA/council meeting on the fiber optic bond ordinance. The article exhibits his laudable ability to provide the reader with the background necessary to understand the story. It covers the history and legal technicalities that lead up to tonight’s vote in a clear and concise manner. Take a look; it’s worth the time spent.

He goes over the central issue of default particularly clearly; the appeals court had bought what are in my opinion some obscure arguments about the legal definition of a “pledge” that the trial court and most participants didn’t seem to know existed. A pledge was said to require a default. From the Advocate:

The new ordinance provides for a default…

But the new ordinance folds in a new section that allows the communications system to “obtain loans from any source (including the city) for purposes of providing covered services and for any other purposes consistent with applicable law.”

Those loans could conceivably be used to make bond debt payments and therefore stave off default. The loans would have to be repaid at a market interest rate and be subject to audit, the ordinance says…

In its ruling, the 3rd Circuit affirmed the ability of LUS to loan itself money with market rate loans.

“We recognize that the city could loan the communications services funds derived from other sources so long as the loan is ‘at interest rates and on terms and conditions available to private enterprises in the open market,’ ” the court said in its ruling.

What’s being said here is that it’s pretty obvious that the city and LUS won’t allow the telecom unit to go into default and that they are writing into the bond governance ordinance a device that clearly provides for preventing default.

So what’s the big deal, you might ask? Why not just do it that way from the beginning? The big deal is that this is yet another clear attempt by BellSouth to raise the cost of doing business ONLY for LUS and hence for LUS’ customers. As to why LUS didn’t want to do that way from the, it is because LUS actually does have its rate payers best interests at heart. Doing it BellSouth’s way will potentially jack up the price its customer/owners have to pay and LUS, naturally, doesn’t want to go there unless forced.

BellSouth in Lafayette can take money from any division (cell, phone, cable, etc.) anywhere in its region (and soon ATT’s!) and use it to subsidize its “competition” in Lafayette. Their gargantuan size makes it a trivial matter. If the LUS telecom division wants even the smallest semblance of the same flexibility it will have to pay a premium for it. The right hand will have to pay interest to the left hand. From the company’s point of view it’s just as silly as a family charging a spouse interest on the money “loaned” for lunch…in the end it all comes from the same pot.

Since it’s legal, even under the appeals court ruling, to transfer monies by a loan the only question is whether LUS (the company) will have to charge to LUS (the telecom division) interest on loans. Now it will. That means LUS will have another expense it wouldn’t otherwise have and that BellSouth will not have, driving LUS’s price up and its margins down. Happy day for BellSouth, a sad day for competition and Lafayette citizens.

This is yet another reason to push hard for repeal in the Louisiana legislature. Of the three bills that seek to mitigate or repeal BellSouth’s law the one which would amend the (un)Fair Competition Act to force government-subsidized companies like BellSouth to abide by the same rules the public utility does would be particularly satisfying to pass. If the “subsidization” clauses applied equally to both BellSouth and LUS you can rest assured that BellSouth’s lobbyists would be buying lunches in every fine restaurant in Baton Rouge to secure the (really)Fair Competition Act’s repeal.