Month: November 2006

The Advocate headline says it all: “LUS says court ‘tilted’ law against cities.” That’s pretty much the whole story. Recent briefs filed with the Louisiana Supreme Cout argue that the third circuit has erred by taking a compromise and transforming it into a tool that the incumbents can use to block implementation of the plan the voters called for in July more than a year ago. That transformation involves ignoring the written intent of the law and the context in which it was passed. From the story:

This summer, the Louisiana 3rd Circuit Court of Appeal put a stop to LUS’ plans, saying the method that LUS planned to use to pay back up to $125 million in communications bonds violated the so-called Local Government Fair Competition Act.

That law was passed in 2004 at the behest of the telecommunications industry as a way to ensure a “level playing field” between privately owned and publicly owned communications businesses.

But the 3rd Circuit ignored the Legislature’s intent and is “interpreting the law so as to tilt the ‘level playing field’ against local governments,” LUS argues in a brief filed with the Louisiana Supreme Court.

Laws usually have preamble sections that establish the purpose of the law and detail its intended effects and the (un)Fair Act has an extensive section that lays that out. This section is often ignored as window dressing by lawyers and courts but has a serious and essential role in determining “intent.” Legal interpretation is at least as difficult as every day interpretation–and determining what a sentence should be understood to mean often depends on hearing it with ear for the context and the intent of the speaker.

“Legislative intent” is the label given this legal principle but, as commonsensical as it may seem when that intent is written into the law, other theories of legal meaning that revolve around a literal reading of the text that is informed by nothing outside the text are often opposed to it. (If you see an echo of arguments over Biblical interpretation I’d say you are most likely seeing a similar pattern.) So, in the end, Lafayette’s future may well come down to which camp on the arcane topic of theories of legal meaning a few men on the State Supreme Court belong.

As lagniappe:

As readers may recall these pages have always been adamantly of the opinion that the Local Government (un)Fair Competition Act is…unfair. It is bad for Lafayette and local governments that might want to follow in its footsteps. Mike Stagg, my partner here, went down and testified against it in the legislature when the official line was that this was a “good compromise.” The Louisiana Supreme Court is the last hurrah for the interpretation that the law is reasonably understood as a fair compromise of any sort. Being right on this will be cold comfort. I’d much rather we were wrong…..

There’s a good article in today’s Advocate that lays out, quite neatly, the history of the fiber fight in Lafayette. Blanchard, the Advocate’s reporter on the story, provides the history as the backdrop to his discussion of the Fiber To the Home Council’s (FTTH Council) friend of the court brief in support of LUS and the city of Lafayette.

Blanchard’s analysis of the FTTH Council brief focuses on the loan structure of the Lafayette project. He notes that the so-called Fair Competition Act was supposed to provide a “level playing field but actually forced LUS to pay market-rate for loans from within the company that its private competitors would not have to pay for. But that (un)fair requirement is precisely what is under attack by the Naquin lawyers who want it eliminated in spite of plain language in the law that anticipated loans offered at fair market rate.

It is a twisty logic that the incumbents and their agents are arguing and it is astonishing that the 3rd circuit bought it.

We’ll see the Naquin lawyers response on the 21st and oral arguments will be the 28th.

By the by, The article closes by expressing some doubt about the project:

During the delay caused by the lawsuit, interest rates have risen, but the cost of the technology has also fallen, giving officials hope that — with a favorable ruling — the communications project will still be financially feasible.

In truth, interest rates are still not above the level projected in the feasibility study. True, we’ll be paying a lot more in interest than we would had the incumbents simply accepted the will of the people. There was a window of very low interest rates of which we should have been able to take advantage. But the current rates are no more than were originally anticipated. The silver lining is the rapidly falling cost of the sort of fiber-optic equipment that LUS is anticipating installing–due mostly to Verizion’s large FTTH build in the US and to rapid FTTH deployment worldwide. As Laignaippe when our purchase is finally made we’ll almost certainly get a higher base speed than the 100 megs we talked about during and immediately after the campaign—LUS will surely install the sort of equipment scheduled for the first upgrade several years out.

The prospect of BellSouth being bought out by AT&T has been a topic of discussion on these pages, much of it unhappy but resigned. Mostly this merger has been seen as a done deal–the prevailing regulatory atmosphere has been such that it was hard to imagine any merger that wouldn’t be approved by the current administration with little concern for consumer concerns.

But in the last few days there has been chatter online about the FCC’s inability to come to grips with the issue–the vote to approve the merger has been delayed three times. The problem is that the deciding vote, a recently appointed Republican, has recused himself from participation as a consequence of having recently worked with a company that has an interest in the outcome. The consequence is that the FCC has been deadlocked on a vote setting conditions for the merger with the Democrats on the panel holding out for conditions that would ensure that the reconstituted AT&T would not abuse its monopoly power to set high entry level charges and that it would adhere to the traditional common carrier rules–rules that enforce net neutrality. AT&T has balked at the latter condition. Scuttlebut had been that, given the overall climate, AT&T would get its way.

But that climate may be changing soon:

If Democrats gain control of the House or – though less likely – the Senate, that would change the regulatory climate for telecom mergers, analysts say.

“AT&T is taking somewhat of a risk (by holding out for the fewest conditions) in that potential success by the Democrats could embolden the opposition,” Merrill Lynch analyst David Janazzo wrote in a note to clients.

If Democrats win the House, then in January they would take over the chairmanships of committees that oversee telecom regulation. Levin says congressional hearings then “wouldn’t be fun” for AT&T.

That gives you one more thing to think about as the returns come in Tuesday night.

A second group has joined the Louisiana Municipal Association (LMA) in filling “friend of the court” briefs in support of Lafayette’s fiber to the home plan. The Advocate this morning reports that the Fiber To The Home Council has joined the LMA, whose support had been previously announced.

Amicus curie briefs like these are important because they offer the court a broader and often more authoritative view on the issues brought before the bench. The current lineup offers points of view from the perspectives of the city, the state, and now the nation.

The new FTTH Council brief, I understand, was authored by Jim Baller. Baller is widely held to be the nation’s most influential lawyer on the subject of broadband and has been a tireless supporter of the concept of municipal broadband. Baller has consistently promoted the idea of a national broadband policy–something few who follow the subject believes exists now–and holds that municipal broadband is an essential element in any practical plan to bring the US back to a competitive level of broadband speed and adoption. Baller was also involved in crafting the now infamous “Local Government (un)Fair Competition Act” and would certainly have a unique basis from which to explore the unanticipated consequences of the law that has been used to keep the fiber-optic network plan in court.

John Gallanger spoke to the paper on behalf of the LMA. I met him during the video franchise battle in Baton Rouge during the last legislative session and have respect for his obvious smarts. The LMA holds that the third circuits circuitous redefinition of bond law is dangerous to the bonding authority local governments have always enjoyed.

Point of personal privilege:

I look forward to giving these briefs a close read — sometime after the election on November 7th. I’m supporting Mike Stagg for Congress….a candidate who actually understands these issues and showed his commitment to Lafayette’s fiber plan in the clearest possible way: by assuming a leadership role in the fight to get it. Boustany was urged, repeatedly, to help co-sponsor a bill that would have provided federal protection for municipal broadband programs by forbidding the states to prohibit them or to author laws, like the (un)Fair Act, that effectively prohibit them. Mike’s opponent has yet to utter discernable support for his home-town’s most ambitious and embattled program, has voted against net neutrality, and just yesterday came up with a 25% score on C|Net’s scorecard of votes in support of technology issues. That score put him in the bottom 5% of the house. From the point of view of a technology advocate he’s not what a Lafayette that sees itself as a high-tech enclave needs.

The Advertiser online has a longish interview with Joey Durel. It’s a bit odd in that it seems organized not around reporters questions but around redigested questions solicited from the papers “readers.” If you’ve ever glanced at the tone the Advertiser has allowed to spring up around its online discussion forums you’ll not be surprised at the unformed and vaguely hostile questions the process puts in Claire Taylor’s mouth.

But what warrants mentioning the interview here is that deep into it Claire repeats a question about using money from LUS or the fiber project for roads. This, of course, is just dumb. That money is simply not available for anything else. (Elsewhere the same crew of questioners has made a big thing out of “dedicating” money.) This has been pointed out often and really is no longer reasonably viewed as an honest question.

What’s interesting though is that Durel claims that even with expenses Lafayette is 2.5 million to the good on the fiber initiative. The idea is that the long delay between Cox rate raises in Lafayette–a delay no one else in the region experienced–can be attributed to not wanting to further offend Lafayette and fuel its already white-hot anger at the corporation while there was a chance the city might still back off.

That $2.5 million is an interesting number and pretty credible if you take into account just how much money Cox pulls out of the community every month. I’d dearly love to see the background figures on this.

Here’s the interview segment that deals with fiber:

CT: Another said that hundreds if not million of taxes dollars have already been spent on the fiber project and planning and campaigning, fighting the legal battles, and the project still hasn’t been built. Shouldn’t that money been spent on roads instead?

JD: No. Let me state very clearly that money was not available for roads. As I stated earlier, in government, unlike you and me, if you have some money in savings, and you can’t pay your house note this month you can take money out of your savings. In government, LUS has certain laws that regulate it. We can’t just go to LUS and say you have some extra money. We want it. We can’t go to the school board and say look you all have a property tax that you are getting a bunch of money and I know you have your needs, but I think we want the extra money this year. We can’t go to LUS and just take money to build roads. It’s against the law. What people don’t realize is that the fiber project has saved this community, I just saw something in the last week or so, had saved the consumers in this community over $2.5 million.

CT: How’s that?

JD: Because Baton Rouge received pricing increases on their cable that we did not receive.

CT: We did get increases.

JD: We got one recently. But they have gotten some before we did. But because we were talking about a fiber optic project we didn’t have price increases. So in this community, we did some math, and found out we have saved this community $2.5 million, which is much more than we spent on legal fees. So I think it’s money well spent. By the way, LUS hasn’t caused the legal fees to be spent. People should not be mad at LUS for spending legal fees to try to do something great for this community. There are other people that that anger should be redirected at.