Month: October 2006

The Louisiana Supreme Court has announced that it will hear Lafayette’s appeal of the third circuit’s decision. The decision to hear the appeal was unanimous, 7-0. Oral arguments are scheduled for November 28th…

That is good news. A finding in favor of Lafayette would mean an end to the legal wrangles over the bond issue. That would allow us to go forward without further delay and trying to expedite the construction of the system has been a primary goal of the city and LUS since the incumbents started trying to delay the project. The way this appeal has been argued by Lafayette it is possible that the Supreme Court will not only overturn the current third circuit decision but roll back the previous one that was unfavorable to LUS. (Recall: this is the second time that Lafayette has been frustrated by the 3rd circuit’s interpretation of the (un)Fair Competition Act. The first time Lafayette re-wrote its bond ordinance with additional crippling aspects included that were meant to satisfy the third circuit’s strained interpretation of the law.)

There would be some primitive justice in the possibility that that the people of Lafayette might actually, finally, benefit a little by by the incumbents’ and their agents’ intransigence. Lafyette might well end up with a more favorable ruling interpretation of the (un)Fair Act than if they’d left it alone after their previous win. To what degree the city could take advantage of that new interpretation without re-writing the bond ordinance and starting a new window for legal challenge is not clear to me. But having the law loosened up would be a very good thing–and a favorable ruling would almost certainly loosen the strictures that the 3rd Circuit unreasonably applied.

Frankly, even if the ruling goes against our city I’ll count the appeal a good thing: it will give Lafayette and its allies in the Louisiana Municipal Association solid grounds to go to the legislature and demand repeal of a law which effectively prevents municipalities from building competitive telecommunications networks. The state legislature was told that the law would facilitate fair competition, not cripple new competitors. Even the “author” of the original bill has said that he thought some of the issues the incumbents were suing about had been settled in discussions while the bill was being drafted and wished that the incumbents had not brought suit. When the legislators who were your biggest supporters think you’ve reneged on the deal it is apparent that something is wrong.

Light a candle for the good guys….

Update: KATC has a short blip on the story as well.

“I can’t wait till we get fiber.”

That’s the closing remark in Kevin Faucheux’s letter in today’s Advertiser complaining about Cox’s poor service. He mentions missing channels, truly lousy phone service, and a general “you ought to be grateful” attitude.

That closing remark about fiber is the author’s way of saying that Cox needs competition–and that he, for one, would abandon Cox in a flash.

And that says a lot about why Cox and BellSouth are fighting to prevent competition in Lafayette. You need look no further than customers like Kevin to know that the advent of real competition, competition with a superior and cheaper product, competition with decent service run by locals, would be a very attractive alternative.

In more reporting on LUS’s state Supreme Court appeal the Advocate’s Kevin Blanchard publishes a follow-up report on Lafayette’s filings to supplement his article last week that focused on the Naquin attorneys’ case.

He lays out the structure of the legal case very clearly…and even gets a bit into the legal principles that govern whether or not the Supreme Court will take the case. That level of reporting is always a nice surprise–good reporting on unfamiliar but important topics like this one should be educational but seldom are.

A few teasers, on the basic incoherence of the law:

While one part of that law, called the Local Government Fair Competition Act, says that any communications bonds must be paid back “solely” from revenues generated from the sale of communications services, another portion says that nothing in the Fair Competition Act restricts governments to “pledge” the resources of its other utilities to secure communications bonds…

Additionally, the Legislature when passing the Fair Competition Act declared its intent was not to prevent government-owned communications operations from being able to engage in the same business practices as private competitors, LUS argues.

The law clearly anticipates such loans–it even provides mechanisms for their oversight. The (un)Fair Competition Act is bad law from the first moment in that it exists solely to hobble one class of competitors and to benefit another. But, were that not enough, it deserves to be repealed simply because it is incoherent. Lafayette’s team should not have let those inconsistencies pass. My guess is that the did because of exhaustion and the sense that the inconsistencies cut both ways and theoretically they might end up with more than they would have had those confusions not been resolved. The trouble with such reasoning is that this is an asymmetrical law that only restricts one side of competitive situation. There is no handle in this law that could be used against the corporations; any confusions simply make it easier to tie the process of building and running a public utility up in court. And that is exactly what is happening.

Take a look, it’s a good article. This is an important case, one that should be heard by the Supreme Court on its merits. It’s important law and exactly the sort of issue the court exists to address.

Fiberish news is mostly in a lull with the “big” news being mostly that there is no news. That’s not entirely an nonsequiter—it’s important that LUS is pursuing its first appeal of a court ruling; and it’s important that Congress adjourned after doing nothing on national video franchising or net neutrality. It is not exciting. But it does make a difference. I’ll try and post updates on all these topics over the next few days as obligations allow.

Today’s not-news topic is the LUS appeal.

Both the Advertiser and the Advocate have run pieces recently noting that the wheels are turning in the LUS appeal to the state supreme court. The whole thing is a mite confusing because nobody in the administration much wants to talk about what was a large issue before the appeal showed up on the state Supreme Court docet: this is, by law, supposed to be an expidited appeal. The ability of third parties to block the issue of bonds approved by local communities was strictly limited. Naquin’s Plaquimine attorneys just made it under the gun of the deadline. If she were to withdraw her suit no new suit against the bond ordinance could be filed. BellSouth’s it’s twelfth-hour threat suit died after cutting a deal with the city and that death was final, at least on the account of the bond law. They cannot now initiate a new one.

The law follows up strict deadlines for filing with strict deadlines for the case being heard—right through the Supreme Court. But we haven’t heard anything about the Supreme Court recently. That’s because, lawyers tell me, that the Supreme Court holds itself above the law on the issue of its own scheduling and nobody wants to talk about it—most especially the city appellants. As a matter of state law there is no effective appeal beyond the Supreme Court. And if they decide that a law infringes on their prerogatives to whom do you appeal?

So we wait to see, if in their majesty, they’ll take the case. And wait to see if they’ll handle it quickly and fairly.

That’s not right, I think most of us will agree. But there it is. The people approved this after a huge battle fought against it by powerful corporations. They knew what they were voting for. Standing in the way of it is simply wrong. Whether it is a single self-interested woman, a powerful corporation, or the State Supreme Court.

With that bit of background out of the way…….The Advertiser article pretty simply recounts the bare fact that LUS answered the Naquin attorney’s arguments on Friday. It didn’t deal with the substance of either side’s arguments.

Kevin Blanchard over at the Advocate published before the city issued its rebuttal but it does go over the points that Naquin’s attorney’s make and notes the Louisiana Municipal Association’s (LMA) friend of the court brief in support of Lafayette. Blanchard covers Naquin’s arguments and I have to say they don’t make much sense to me. They dismiss the LMA and Lafayette’s concern that the 3rd circuit’s earlier ruling fundamentally reinterprets state bond law–but that has been a concern since before the latest Naquin appeal and a major reason why many state-wide wanted that decision appealed. It is a real concern as the LMA filing demonstrates. The corporations are playing with the laws that enable local governments to operate effectively in order to get their way on stopping Lafayette’s project. Many bond issues use the word “pledge” and any that try and use a “pay as you go,” “revenue-based” bonds are particularly in danger. It is a dangerous game the corporations are playing.

Blanchard also reports that Naquin’s attorney appear close to conceding that traditional legal interpretation has always allowed the “fruits” of “pledged” assets to be used to pay off debts. But then the lawyers get into some sort of convoluted “fruit of fruits” and claims that property cannot be the fruit of itself. I honestly can’t imagine what they can mean by that — they appear to be saying that revenue derived from an asset cannot be considered to be part of the value of the pledged asset. If that is what they mean; that’s a nutty argument. Most assets, from rental property to stocks are valued precisely on their rate of return–on their fruits. If that were removed they would have a hugely reduced value. It’s a bad misunderstanding of fundamental economics to think substance and return are separable in theory or practice.

So we wait for the Supreme Court to act. While we wait there are still unresolved issues that might make news if only the reporters would pursue it: Who recruited Matthew Eastin and Elizabeth Naquin, notably uninvolved citizens? Who turned them onto a couple of law firms in Baton Rouge and Plaquimine? Are they paying for all this litigation? If not, who is? Who, in fact, benefits? There is real news out there. We’re just not seeing much of it.

Dana Blankenhorn posts a bit called: ESPN Mobile:When Will They Ever Learn? In it he exasperatedly blasts the idea that the internet is a “content delivery” device:

The idea that mobile devices, or Internet devices, are merely conduits through which people will passively pay for content has been around for a decade, and despite continual failures, the message never seems to get through to the content companies.

The point of departure for his ire is the ongoing falure of “mobile services” and ESPN mobile in particular. He could have named everything from AOL to the plethora of pay news portals that struggle to ignore the lessons of the runaway success of everything from email lists to mobile phones, to bloggers, to digg, to flicker.

It’s not about establishing distribution “channels.”

It’s about communication. Engaging people has always been about conversation.

Our current channel madness–folding content chosen by the provider into a limited media that the public was willing to pay for–grew up in a period of bandwidth scarcity. Newspapers, broadcast TV, Cable, the AOL’s of the world and ESPN mobile all share one trait–You could accept that packaging or do without. That’s fairly stable until real choice arrives. AOL was killed by and newspapers are succumbing to the web’s open abundance. In today’s digital age the providers struggle to maintain the illusion of scarcity in order to create profit centers for themselves. The brohaha about network neutrality is about nothing more than the phone companies wanting into the game the cablecos are playing.

When LUS opens up big pipes in Lafayette it will, locally, mean the end of bandwidth scarcity. You can look for channels, walled gardens, and every other form of corralling content to be in eminent danger.

What’ll replace it? It’s worth thinking on.

Lafayette will have a vote in that election–by what we choose to build here.