My previous post reported on the responses of local government to HB 699–the state-wide franchise bill. Both the Louisiana Municipal Association and the Police Jury Association have recently issued urgent alerts to their members. I was struck by the prominence of the belief that BellSouth/AT&T won’t pay the franchise fees they are promising. That’s a little unusual. Thinking a law is a bad one for the people you represent is one thing. Telling those people you believe the proposed law is dishonest is something entirely different.
The local governments of Lousiana appears to have concluded that BellSouth, and its new master AT&T are bad actors.
One of the most striking and unique features of the battle in Louisiana over this issue has been that Louisiana’s local governments have clearly recognized the likelihood that AT&T (after it has bought BellSouth) will not pay franchise fees as the bill appears to promise–and regard the conciliatory phrases in the bill that indicate that the telephone company will pay fees as so much flash and noise. The corporation’s real object, they clearly understand, is to prevent local government from making service for all — and equal prices for all — a condition of AT&T/BellSouth using community-owned rights-of-way by moving control of the rules governing the use of local property to the state level.
The basis for thinking they do not intend to pay local communities a dime is clear cut: AT&T has repeatedly made clear that it considers its product an “information service.” It has written a clause into HB 699 that excludes “information services” from the definition of services for which franchise fees are owed. The conclusion is pretty obvious and doesn’t require an advanced degree in the law or technology–or experience in anything other than human nature.
In two separate negotiating sessions over the last weeks BellSouth’s representatives have pretended they did not understand the implications of the phrase “information service.” That’s just not credible and has to be seen as a sign of fundamental dishonesty. The FCC’s definition of this phrase is what allowed the phone companies to enter the internet business and is at the heart of their current DSL broadband business. It is impossible to believe that any executive or telecom lawyer is not familiar with the phrase or the way that their DSL business is dependent on the exclusive federal control the FCC established for that category. Similarly it is just not credible that any BellSouth executive does not understand that their new product is an xDSL-based product. They MUST understand what their counterparts across the table are worried about. The refusal to deal with that legitimate concern directly, and the unfulfilled promises to get their lawyers to “look into it”and “get back” with them are fairly interpreted as deceptive.
There is a cure: the phone company could acknowledge the central significance of the phrase “information service,” acknowledge its belief that its IPTV service is an information service, acknowledge the role of federal definitions in exempting such service from local or state control, and then explicitly and voluntarily give up exclusion for video services delivered by “channels” in Louisiana and agree to pay for the use of local property in the same fashion that cable companies do. That’s the sort of thing a corporation might do to clear up any uncertainty about whether or not it will actually pay what it is promising the people of Louisiana it will.
BellSouth/AT&T has not done anything like this–and has not even been willing to acknowledge the existence of the issue in a fair and open manner.
There’s a very rancid taste left by all this. What the people of Louisiana need to recognize based on this (and similar dishonesties in Lafayette and New Orleans) is that BellSouth simply cannot be trusted to negotiate openly and honestly. In our everyday business dealings we understand what to do when we come across people whose self-interest overpowers their integrity. We first try and exclude them from anything for which we have responsibility. And, if that is not possible, we try and hem them in with rules and watch them like a hawk with the plain presumption that they will exploit any opening for their own benefit. Finally we try and develop alternate partners for the future. Lousiana should do the same.