On Killing the Goose that Lays the Golden Egg

The Advocate carries the odd story, splashed across the front page of its Acadiana section this morning, that retells the tale one Steve Pellessier told the Concerned Citizens for Good Government yesterday. Pellessier wants Lafayette to sell off LUS to pay for current shortfalls in road funding.

Thank heaven that at least some folks have a classical education. Joey Durel responded humorously but basically dismissively to the suggestion by saying that do so would be like getting “rid of the goose that laid the golden egg.”

The idea of selling off a consistent money-maker, to the tune of 17.2 million and a quarter of the city-parish budget each year, for a one-shot, quick fix play to meet the parish’s road needs following Katrina & Rita is plain foolish. It has to be one of the purest examples of the lessons of Aesop’s fable concerning “the destructiveness of greed, the virtue of patience.”

First, historically LUS has had lower prices than its private competitors (the current rough equity is unusual) and Pellessier appears to know that. Citizens would end up paying twice: once in the form of 25% higher taxes–the money has to come from somewhere–and once in the form of higher utility bills. Second, and this point appears to have very discretely not been raised considering the current divisiveness of the issue in the council, it would be a sale of city assets to benefit almost solely suburban needs and the downstream cost of more expensive electricity would be borne solely by city residents as well. Politically this should be a major nonstarter. The current push to dissolve the city-parish form of government is mostly based on formless resentment. Any movement in this direct would give that movement a basis in real injustice and a real constituency.

Beyond the foolishness of the idea of killing the goose you’ve got the fact that this goose is fertile. The goose in the fable is obviously sterile–it lays golden eggs but those eggs don’t hatch. It is unique. LUS however is incubating another goose that promises to lay even larger golden eggs. The mere threat of an LUS Telecom network has kept Cox from raising prices. The reality of a cheaper, more capable alternative will save us all a bundle off our monthly bills.

Beyond the cost savings we should all be aware that the income to the city-parish coffers should be substantial. That 17.2 million LUS gives us comes chiefly from electricity…a low-margin utility. The money coming into the coffers from the Telecom division will mostly be from high-margin cable industry competition. How much do you spend on electricity? How much do you spend on cable, internet, and phone service? Think about it…

If there is anything that’s more foolish than killing the goose that laid the golden egg it’s killing one that has offspring that also lay golden eggs.

Though the Advocate story doesn’t mention it Pellessier, in a recent letter, did say that LUS could keep its recently voted-in telecom division. That’s a crock and Pellessier, an opponent of the LUS plan, should know it. Much of what makes the telecom unit economic–and the main reason more cities are not in a position to make the same decision Lafayette has–is that Lafayette already owns and operates the necessary infrastructure in poles and maintenance crews in order to service its electrical division. It is hard not to suspect that a suggestion this off the mark isn’t motivated in some part by left over resentments from having lost that fight.

You’d think a “Certified Commercial Investment Member” — someone who specializes in commercial real estate investments–would understand that trading a growing revenue-producing asset for a one-shot wasting asset is always a bad idea. Don Bertrand makes the point more succinctly:

Don Bertrand said he’s glad to have a discussion about how to fund roads, but that LUS is the city’s best asset. Bertrand said there are other options to raise funding without giving up a revenue-producing entity like LUS.

“When we’re done, we’ll have roads, but roads don’t produce money,” Bertrand said.

Franchise Bill Passes in House

Correction 6/5/05: A reader email alerts me to an error in this article: Trahan voted for the bill, not against it as I originally reported in the summary table below. I must have misread the officially tally that I’d linked to in the paragraph above. My bad. (Strikethroughs denote the original mistake and red text the corrections.)

The state-wide franchise bill backed by BellSouth moved through the bowels of the House today. (You may correctly assume I think this bill s__t. Insert appropriate scatological jokes here.)

This is the same bill that strips localities of their property rights in regards to Telecom (and only telecom) companies. Local governments ability to make contracts that serve the interests of local citizens based on their ownership of local rights of way would be usurped by and handed over to corporations. The most immediate effect will be to exempt AT&T/BellSouth from the current rules that require that cable service be offered to all in a community by any corporation that leases their property. AT&T has been insisting that it won’t pay a dime in franchise fees, and doesn’t have to pay attention to local desires about how its land is used and what is placed on that land. In some places it has sued to forbid local governments from exerting their property rights and in others it has been sued for ignoring them. In all cases it is clear that AT&T believes it has no obligation to pay franchise fees. This will have a huge impact on local income. Lafayette gets $900,000 a year and New Orleans got $5,000,000. That’s based on cable income. Every dollar BS takes from Cox will mean another dollar in taxes that someone in those cities has to pay.

There has seldom been so raw an example of our state representatives selling out the interests of localities to boost the profit margin of one of the world’s largest corporations. Their mothers would be ashamed.

The bill passed 73 to 26. If you like to see a list of the heels and heroes visit the page detailing the final vote. If your representative is a heel you really ought to let him or her know.

Here’s how Lafayette’s reps did. Even up. That sad showing is twice as good as the state average. I expect that’s pretty much a product of Lafayette’s first hand experience with the untrustworthy nature of BS. No better than the state’s average and that’s a real shame.

Ernest J. Alexander Hero Republican
Clara Guilbeau Baudoin Hero Democrat
Wilfred T. Pierre Heel Democrat
Gillis J. Pinac Heel Democrat
Joel C. Robideaux Heel Independent
Donald Mark “Don” Trahan Hero Heel Republican

Pinac, who represents the sliver of Lafayette that includes Duson was particulary embarrasing though. As the chair of the committee he has used his leadership role to pretty consistently help the telecos out on several bills. Maybe the mayor of Duson should give him a call. though. As the chair of the committee he has used his leadership role to pretty consistently help the telecos out on several bills. Maybe the mayor of Duson should give him a call.

FYI: Lafayette Wireless

Found in the “notes” to both wireless bills being considered today in the House Commerce Committee:

The Lafayette City-Parish Government is also studying the feasibility of providing a wireless Internet system for public access. A representative of the Lafayette Utilities Systems told us that capital costs for a typical wireless system could be $110, 000 to $140, 000 per square mile, depending on density and geography of the covered area. Operation and maintenance costs could be 25% to 40% of the capital costs per year.

These Fiscal Notes are from the office of the legislative auditor and serve to inform legislators about the fiscal impact of proposed laws. The analyst says these bills will have no impact on state government and will only impact local governments if they choose to build wireless networks.

It’s good to see this a bit more out in the open (though responding to the legislative auditor’s questions don’t really constitute public discussion). It’s also gratifying to see that LUS is studying the possibility in useful detail.

According to Wikipedia the city of Lafayette covers about 47.7 square miles. Working with the figures LUS gave the auditor the cost to provide Lafayette with a wireless system would work out to between $5,247,000 and $6,678,000. That’s roughly between 4% and 5% of the $125,000,000 planned investment in our fiber-optic network. (But with a substantial continuing cost.) That’s been the cost estimate bandied about on Lafayette Pro Fiber for awhile. It would be a great thing to go ahead and build out a wireless net concurrently with and integrated into the fiber-optic network. LUS would achieve some economies by combining the two operations.

But more important would be the integration of the two networks. Since we began the odyssey toward a publicly owned telecom network the “holy grail” of a triple play of cable TV, telephony, and internet has expanded and has become a “quadruple play” with the inclusion of wireless data/cellular services. Such a package is in the works by both AT&T/Bellsouth and Cox. A strong, high bandwidth wireless system would allow LUS to offer its own, tightly integrated, powerful counterpoint. Such a network could, by building on the ubiquitous LUS fiber backbone provide much more bandwidth than is being contemplated in any other wide-area wireless network. The difference would be as striking as the difference between the fiber-optic based system and older technologies. High bandwidth wireless would support wireless VOIP and a partnership with a cellular company would provide roaming capacities outside the local network.

By offering such a product LUS could again leapfrog its competition and provide its citizen/customers services that would be unrivaled in capacity. There’d be a raft of associated benefits–the possibility of a free (or very low cost) low bandwidth tier could be an effective way to address the digital divide (and make visitors and tourists remember us fondly). Full available bandwidth could be a part of, or a cheap add-on to standard bundles–and could be so inexpensive as to make that addition an easy decision.

This is the sort of bold move that has always marked Lafayette; Let’s go for it.

(And let’s all hope for a quick resolution of the current lawsuits.)

“Outsourcing Big Brother”

I try and point to something fairly thoughtful and, usually, upbeat on Sundays in the hope that people will find something interesting to reflect upon on the day many of us devote to rest. Today that’s Feld’s “Outsourcing Big Brother” which qualifies on the thoughtful if not upbeat dimension. (I’ve been chewing over a wild idea that is at the intersection of geeky and social and, if I get it formed up before obligations of the day you might get that to chew on too.)

Most of us have a pretty upbeat sense that the internet is a technology that promotes freedom. Feld agrees and celebrates that aspect. At the same time:

It is the paradox of our time that just as new technologies offer unlimited possibilities for freedom of speech, government “deregulation” creates new bottlenecks. It is a race between the new technologies for freedom and what I call “censorship by outsourcing.”

While Feld’s thesis might appear to be derived from this week’s headlines this essay is actually almost a year old and sounded its warning before the recent revelations of collusion between big government and big corporations made this topic the day’s hot ticket.

What seems most worth thinking about is Feld’s contention that some forms of “deregulation” that we usually think of as fostering freedom collide with free speech rights on the internet. The tension between frees speech and corporate ownership of media is nothing new–we even have a hackneyed saw about it: “Freedom of the press belongs to those that own it.” In this instance the worry is that deregulation is actually in the service of concentrating ownership (not the usual intent) and that the resulting huge corporataion (Like SBC/AT&T/BellSouth/?) have a vested interest in pleasing and sustaining the regulators at the federal level on whom they depend for their very existence.

The thought that deregulation leads to corporate consolodation and a general loss of freedom is an idea that seems counterintuitive on the surface but looks pretty credible if you look at the actual dynamics of this particular case.

So, if you’re interested in a little dark reflection on what is an overcast day here in Lafayette, take a look.

Oh, what the hey…Here’s a teaser:

…[The internet’s] nirvana of free speech did not arise spontaneously out of nature, or even as the result of technological determinism. The internet grew out of two important principles. The first was “common carriage,” the idea that the provider of the essential service (here, the phone lines that carried the original dial-up internet) must make that service available to everyone at the same rate and cannot interfere with anyone using the service. Mark Cooper has called this principle of common carriage “essential to the DNA of capitalism.” Historically, we have applied it to inns and tolls, so that goods could move freely. We applied it again to railroads, then public utilities like electricity and phones. This prevented the entity that controlled transport of goods or information from using control of this essential facility to extort monopoly prices or favor one type of goods or services over another.

The second principle was the right to interconnect. If I run a communications network, I have a right under US law to interconnect with any other communications network. This allows networks to compete. Without this principle, a rival network could never have a chance. The competing network would refuse to connect, and the few customers on the new network would not be able to reach the majority of people on the other network. (Economists call this phenomenom a “network effect.”)

The internet arose from this universe of common carriage and interconnection. It placed control of content and services in the hands of the people at the edges of the network, rather than under the control of the network operator.

But the FCC has eliminated both of these requirements…

BellSouth Lies

From a CNet story dealing with the fallout from recent revelations involving the NSA and phone records. Without further comment. Emphasis mine.

A CNET News.com survey published in February asked telecommunications carriers whether they ‘turned over information or opened up their networks to the NSA without being compelled by law.’ Neither Verizon nor AT&T would answer yes or no to that question.

But BellSouth did answer in the negative at the time. A BellSouth representative on Thursday said he could not explain the discrepancy, and provided News.com with a statement saying: ‘BellSouth does not provide any confidential customer information to the NSA or any governmental agency without proper legal authority.’ The statement did not elaborate on what ‘proper legal authority’ might be, and whether it would encompass a mere request from the White House.

BayouBuzz On Monday’s Wireless Vote

BayouBuzz’s Steve Sabludowsky posted a story yesterday that is worth pointing to here. In a story titled “Louisiana Faces Most Important Issue In Legislative Session On Monday” he makes the case that Monday’s house commerce committee vote on freeing wireless communications from the Local Government (un)Fair Competition Act is the most important piece of legislation this season. That’s a pretty dramatic claim but he makes a good case.

The immediate issue is emergency preparedness–the Fair Competition Act prevents cities from using city resources to build public networks that are used to provide services directly to the public–whether free, paid, or emergency-based. New Orleans is evading the law by ignoring it during the “emergency”– a dicey move at best and strictly time-limited. The city would like to continue to offer free wifi service to its beleaguered residents but BellSouth and Cox are standing in the way of a partial repeal.

New Orleans’ need is critical but the need across Louisiana and especially south Louisiana is chronic as Sabludowsky documents. We simply don’t have a decent emergency communications network in place. Neither does the rest of the country as 9-11 demonstrated but in our case the need is utterly predictable. There will be another hurricane, and another, and another. We need to be free to take care of our own. No emergency service is profitable and the incumbents are NOT going to do this for us. We have to do it for ourselves and we have to be allowed to defray the cost however we please–after all it is our resources and we bear the costs both monetary and social. The state should stand out of our way–as they stood out of our way before the incumbents had this odious law passed.

I can add this personal note: I worked at the Cajundome after Katrina and Rita and modern telecommunications, when they came back up, were immeasurably valuable in the immediate aftermath of the storms. Part of what Lafayette Coming Together did at that time was put in VOIP phones, a WiFi node, and a computer lab with an internet connection. Members helped rework the dome’s network infrastructure to handle new traffic and stabilize the existing framework. All this was not as visible as other relief efforts but without them the Cajundome would have worked much more poorly and the evacuees would have had a much more difficult time locating resources. Communications is absolutely crucial.

Sabludowsky asks:

Is there any more important issue on the Legislative agenda than saving lives, saving parishes and saving our state?

He’s right.

The article closes with this plea.

Here are the members of the House Commerce committee. They must know you want the best protection possible. http://house.louisiana.gov/H-Reps/Cmte_CO.asp

Please contact them now. Please attend the hearing on Monday. The lives we save, might be our own and if we fail to set up every means to communicate when we have had a year to do so, Lord help us because Congress won’t. Please forward this column to your friends and business associates. For the record, I am not being paid by anyone for writing this. I have written this column because I truly believe this is the only way to save Louisiana and Plaquesmines, St. Tammany, Orleans, Jefferson, Cameron, St. Bernard and other parishes in the direct path of the storm.

He’s right about all that too…please let your legislators know that the people are watching and that they care whether or not their representatives allow local people to do for local people with the state stepping in to forbid it because a couple of contribution-wielding corporations wants to protect what they imagine to be “their” future profits.

It’s our state.

“Former LUS director Hargis dies at 100”

A brief article about appears in the Advertiser this morning covering the death of C. C. Hargis, the former utility director of LUS. Hargis led LUS during a period when many public electrical utilities were allowed to wither and eventually be sold to private providers. He didn’t allow that to happen the organization for which he was given responsibility.

LUS last year returned 17.2 million dollars to the city-parish treasury. It is an extremely successful company which keeps Lafayette’s money in Lafayette and sells electricty on the open market at a profit that benefits the local community. Old-timers, like Hargis, believe that Lafayette’s having control of its own electrical system, and its ability to retain that wealth locally over many years, was one reason Lafayette’s became the dominant city in the region.

Being willing to go their own way, to start, and to repeatedly decide to refurbish and rebuild a utility is one of the clearest indications of how the citizens of Lafayette have always made their own decisions and gone their own way.

That spirit of independence and willingness to strike out on their own path served the community well. Success builds on success. The planned fiber-optic network this site is so concerned with would not be a practical alternative had the local electrical utility not been healthy and well-supported by the community. Hargis supported LUS’ broadband plan and proponents of the project talked of his support with humor and respect.

One of the nicer things about living in a place like Lafayette that you can see the difference that single people who are determined to do the right thing can make. Hargis is one of those whose life yielded great benefits to his community; it is a testemant to the ways in which people can make a difference in the lives of their neighbors.

He earned the honored place in our history that he will occupy.

BellSouth/AT&T Sells Your Privacy to Big Brother

Another chapter in the scandal about spying on us all has unfolded in a headlined USAToday story that has Congress in a justified uproar. BellSouth and AT&T are deep in the middle of this one too. USAToday reports on the latest aspect: The phone companies have sold our phone records to the federal government. All our phone records. Every call. Who to. Who from. Where to. Where from….everything is now sitting in federal databases.

BellSouth, AT&T, and Verizon simply sold it to them. Neither you nor I nor the local police nor anyone at the state, nor even Federal prosecutors hunting Mafia Dons could purchase those records. They are not supposed to be purchasable. They are not supposed to be available to anyone without a court order. This is flat-out illegal. That the phone companies made a tidy profit off it makes it all the more disgusting.

Understand clearly that this is corruption. And it illustrates how corruption always gets a toehold. It is the same story as the one that explains how policemen become bag men for criminals. One side entices the other side into a “little” illegal activity. Both sides now have something on the other–the policeman knows things that are dangerous to the crooks and the crooks know the policeman is on the take. A little mutual blackmail ensues and the pay-off and the level of illegality on both sides gets pushed up. In this case the National Security Agency seduces (most of) the phone companies into illegal but supposedly reliably hidden activity. Both sides engage for a while in their little bit of mutually profitable corruption. If the NSA want just a little more, more records, to record a few suspicious phone calls “on the side,” just to “test” the search algorithms how can the Bells resist? If the phone companies want a little regulatory relief, if the want to keep the competition from snooping into their records or monitoring their networks for violations of contractual agreements can they count on the national security apparatus to run a blocking action for them with regulators. You know they can. The game is fundamentally corrupting. UPDATE: Dana Blankenhorn asks if this corrupt pattern has already played out. That’s well worth considering.

And this wholesale invasion of privacy not the end of it. Not nearly. You can count on it.

I’ve insisted for awhile (1,2) that the technology involved in “monitoring” IP networks of necessity involves sifting through all the data. Earlier installments of this scandal have involved the administration telling us they were not really spying on Americans without a warrant, and then taking the fallback that if they were it was only on our overseas calls. Then we heard from an AT&T technician involved in installing the black rooms that they were setting up the capacity to spy on us all–that technician’s point was similar to my own: that’s just they way spying of packet-based architectures have to be done. Each packet has to be examined to know what is in it. Now we get this new story that phone company records are being illegally sold to the same shadowy agency that we understand was engaging in warrantless wiretapping.

It’s the connection between the the illegal records sales and the warrantless wiretapping that constitutes the next big scandal…

Understand that these records are like a huge index of voice-based video traffic hashed on time and person. There’s a lot that’s not included in IP packets–if you “wiretap” an IP stream you don’t get all the data you might want about the person or the actual endpoints of calls for instance. –How deep this issue goes I’m not sure…anyone who understands VOIP routing headers better than I is invited to comment.– I do know that rerouting VOIP calls is standard practice, that’s how you can get a call addressed to one person or number locally rerouted to your traveling number. That info would not be in the header but scattered around in various servers. But by using the big carrier’s records and correlating that with what you pull from the IP stream you could reconstruct the whole call and all the relevant data about endpoints. The whole enchilada. Of course, if past behavior is any indication the big brother/phone company consortium won’t own up to this. They’ll substitute partially valid arguments about “traffic monitoring” and the value of monitoring chatter and understanding “al Queda’s” social network.

But the hidden nut of all this goes back to the technician who is confident that what he helped AT&T install for the NSA is a system capable of secretly wiretapping all Americans. Just tapping the IP stream is not enough…nor is buy phone company index data. But mash those together and put some real computing horsepower and a lot of storage into it and you could effortlessly spy on any citizen you wanted to. All it would take would be the willingness to ignore a little thing called law.

The Silver Lining
In all the dispiriting muck there are two real gems: Leslie Cauley, who broke the story, and Qwest, the fourth Bell–the one that didn’t go along and wasn’t for sale.

You should remember Leslie Cauley’s name and read what she puts under her byline. It took a rare combination, tech savvy, and political astuteness to know that there had to be a story to dig up. It took courage to decide to keep digging and doggedness to see it through. Plus, she can write. Of course, she’d already proven her savvy about the intersection of tech and politics..Cauley was the reporter who did the story Bells dig in to dominate high-speed Internet realm” that focused national attention on Lafayette’s fight for fiber.

Qwest is due kudos as well. Qwest is the smallest of the giant baby Bells and often dismissed as financially struggling. Much of its territory is in the relatively sparsely settled west and it struggles financially. But Qwest has significant overseas lines and a strong national backbone–which BellSouth for instance does not. Qwest, under the leadership of two CEOs demonstrated that it had a corporate culture that respected its customers’ more than it desired the money offered it or feared the loss of federal business the administration suggested might be the consequence of refusing an illegal request.

Qwest has some of its long-haul fiber in Lafayette. There’s now additional reason for LUS to drop AT&T as a supplier… and a very good reason to pick up Qwest. Between an LUS first mile and a Qwest backhaul contract we could get a least a little shelter from those who’d run roughshod over our liberty for a few bucks and a cozy relationship with the regulators.

Good for Leslie, Good for Qwest. —Bad on all those other jerks.

Lagniappe: For fun–a Whitacre/Suess mashup in poem

Endless Lawsuits, Part 23

An Advocate story this morning points to yet another lawsuit filed by the class-action lawyers out of Plaquemine. This one demands Lafayette construct rules for rate complaints so they can get about their business of contesting rate increases years ago by blocking the current sale of LUS’ fiber optic bonds. (They’ve constructed some tenuous connection there–a connection that, apparently, does not apply to any of the other sets of bonds LUS is in the process of selling. Sounds suspicious? It does to me, too.)

This is the same meddlesome bunch that filed a lawsuit prior to the referendum that tried (and failed) to convince various and sundry courts to hear their case and allow them to paw through LUS’ records. Class action lawsuits have often been used as fishing expeditions through corporate records–something of which Cox and BellSouth are painfully aware. Turning the tactic against a local public utility was a new twist in this tale.

When the original lawsuit was filed it was pretty clearly part of the incumbent’s efforts to drum up public FUD about LUS’ in lieu of tax payments. That bit of propaganda gained no traction with the voters. That lawsuit was an obvious legal clone of BellSouth’s suit de jure recast in the form of a class action lawsuit. The legal similarity was so striking that Judge Ware dismissed the case because he understood that BellSouth had already lost the same argument in Conque’s court.

The current lawsuit does the same thing that the lawsuit that BellSouth and Cox let die as part of their deal with LUS/LCG: it seeks to block the sale of the bonds that would allow LUS to begin building the system the people of Lafayette voted for last July 16th.

The Eastin-Naquin class action lawsuits have always been creatures of BellSouth and, LUS/LCG’s “deal” not withstanding, this one is too. Make no mistake, BellSouth and perhaps Cox are behind this baby and it’s new offspring.

If the incumbents actually believed they could effectively compete they would. This endless round of lawsuits and lawsuits to support the lawsuits is evidence that they fear the idea LUS represents–and don’t care what the people of Lafayette think of them.

“Is AT&T’s Whitacre playing politics with IPTV for low income households?”


A reader points me to a recent blog entry on ZDNet that asks whether AT&T’s Whitacre is playing politics when it announces that it will be serving 5.5 million low income households with Lightspeed, its IPTV/data project. (Thanks, reader!) Lightspeed is what any new phone company upgrade in Lafayette will be called after AT&T acquires BellSouth.

Of course AT&T’s playing politics.

The ZDNet reporter does the first thing that is necessary to interpret a teleco’s public pronouncments: he asks how the company thinks it will benefit from what it is saying rather than simply repeating their carefully crafted words.

Articles in the last few days have uncritically reported Whitacre’s remarks before a group in Detroit without putting the remarks into any context which might make them meaningful. There’s both state and local contexts which should be taken into account.

First, AT&T is funding a huge battle in Michigan to put in a state-wide video franchising law similar to the one it is pushing Louisiana. In Michigan the Michigan Municipal League (MML) has fought back vigorously, staging events and developing coalitions over the last several months. Muncipalities representing over 60% of Michigan’s population have passed resolutions condemning the law and AT&T has responded with platoons of lawyers and local advertising. The issue in Michigan is the same as in Louisiana–resisting the state taking of local property and outrage at the clause which would allow AT&T to serve only the wealthiest parts of the community.

AT&T is being given a painful and damaging black eye in the state as MML hammers home the point that AT&T has promised its investors that it will only offer the service to 5% of “Low Value” customers while it will offer it to 95% of “High Value” ones. “Low value” has been defined as those spending less that $110 dollars a month on communications services. A close look at AT&T’s own numbers show that it only plans to serve about 52.5% of its current customer base with the new service. Nobody in rust-belt Michigan, or depressed Cleveland misses the point–places with contracting economies, neighborhoods that are not wealthy, and rural areas with their low population density are being written off. AT&T is not going to waste their time with those guys and it wants to make sure that local governments don’t make serving local communities an all or nothing proposition as current franchise agreements require.

So Whitacre is not just playing politics; he is doing damage control. It has also got personal in Michigan. The Michigan Municipal League has demanded that Whitacre himself tell Michigan communities why he is not responding to their requests for competition and staged an embarrassing event to coincide with the Whitacre’s speech to highlight their positions. A press release from the MML reported that:

As Whitacre spoke, a 10-foot-tall, 20-foot-wide mobile billboard circled outside The Masonic Temple in Detroit with the message “AT&T: Why won’t you call us back? — Michigan’s communities.”

To read the mainstream press’s account of the speech you’d think that nothing was going on in Michigan — or outside the doors of the club where the speech was held — that could have promted Whitacre’s concilatory remarks.

But that’s not nearly all. Whitacre’s AT&T is also being hammered on the national level by Rep. Dingell of Michigan who painfully forced Whitacre to respond in writing to the charge that AT&T has no intention of actually entering into franchise agreements–and forced the company to restate their belief that their new project Lightspeed is an information service which by federal mandate is not subject to state law. (So why ask for a franchise bill at all? For the same reason that such bills are being driven through legislatures by the Bells across the country: to make sure that local municipalities don’t force them, as they currently force the cable companies, to serve all the people of the community in order to get permission to run their lines through the public’s property.)

Whitacre would also love to placate Michigan’s Dingell, if that is possible. Saying the right thing in Michigan right now is actually important.

Is Whitacre playing politics? Of course he is playing politics.

In Michigan and in Lousiaina…and in South Carolina, and in Illinois, and in the halls of Congress. That’s what the phone companies do.

(As I get ready to post this I’ve run across an article that expresses similar sentiments on Broadband Reports. Bove’s doubts are more historical than mine and an interesting contrast.)