The Advocate story, LUS to receive draft of PSC pricing rules, gives background for a set of draft rules the Louisiana Public Service Commission (PSC) is expected to issue this week.
The regulation is a result of language in BellSouth’s misnamed “Local Government Fair Competition” Act (Act 736) passed last summer as a compromise to the original BellSouth bill which would have made Lafayette’s fiber-optic project impossible.
The story, while well-written, tends to be a little confusing in part because of necessary technical language such as “in-lieu-of-taxes” and “cross-subsidizaton,” and in part because the concepts seem a little off. I think I can help clarify the matter by giving a little context. You need to clear your mind of the usual assumption that the PSC exists to ensure fairness for consumers and citizens—to make sure that rates are no higher than they must be. Act 736 is not about that. It is about ensuring “fairness” (cough, cough) for telecom corporations–by which the framers of the law (uh, BellSouth) meant that municipal providers should labor under any burden that they do and a number of burdens that no private corporation would ever tolerate. The purpose of this segment of the law is to artificially raise the cost to consumers and citizens above that which they would have to pay were there no such “fair” law.
Ok, stop for a minute and wrap your head around that. The purpose of this regulation is to ensure that you pay higher rates than you would otherwise. And the PSC is supposed to enforce it (don’t you know they hate this). Once you have this Alice in Wonderland concept firmly fixed in your mind the story makes a lot better sense.
Ready? Good. Let’s jump down the rabbit-hole.
One part of the regulations that we will see in draft form this week is that which results from the Act 736 requirement that the PSC make sure that rates to customers are set higher than the actual cost of LUS doing business. This requirement is supposed to account for taxes and fees that LUS doesn’t have to pay because it is a public body or because it already owns the rights of ways for which the fees are paid. (Honestly. That is really the logic of it.) LUS managed, as part of the compromise, to get its contribution to the city government (in-lieu-of-taxes) counted against this requirement. As it turns out, the in-lieu payment is already greater than all the taxes and fees that private providers have to pay, regardless of what sob stories we often hear from telecom corporations. But still, the PSC has to set up elaborate regulations–and LUS has to spend money to track of all this–so that the PSC can confirm that LUS is not saving its customers too much money.
Now if that isn’t strange enough, in addition to asking LUS to charge you for taxes it doesn’t pay and fees to use property it already owns, Act 736 also requires that the PSC impose conditions on LUS that no private business has to endure. The basic idea is that LUS should have to pretend that the new business is not a part of LUS and charge itself accordingly. Private businesses normally start new divisions and enterprises in areas in which their current resources make them better able to compete efficiently. That’s just common sense. You’d think. But in the world in which Act 736 forces the PSC to exist, it is illegal–for public entities. So there will be a “cost allocation manual” that controls what percentage of the work on a pole is assigned to the telecom division and how much to power. There’ll be “affiliate transactions” regulations that mandate that LUS charge open rate for work folks in the power division or sewer divisions do for LUS. There will be endless red tape to prove that they are doing these inefficient things. To what end? Well, to hear BellSouth tell it, to prevent the evils of “cross-subsidization,” which apparently is a bad thing when a public power company uses its resources to support telecom services but a good thing when a telecom company uses its immense technical resources and broadband backbone to muscle into the wireless business. (Cingular anyone?) “Cross-subsidization” is good, fundamental business practice and an important way in which the free enterprise system develops efficiencies to pass on to consumers and enrich owners. There is absolutely nothing wrong with the idea. Except when the efficiencies are earned by BellSouth’s competitors.
The truth is that the real purpose of these regulations is to force unnecessary inefficiencies and costs onto the telecom division. And the purpose of that is to make sure that LUS cannot bring your rates down as low as it would otherwise be able to do.
So, friends and neighbors, the coming rate hearings are not only an inscrutable bureaucratic nightmare, they will also determine just how much how much savings our utility will be allowed to pass on to us and how much phantom inefficiency it (and no private provider) will have to carry on its books when it comes time to determine the rates the PSC allows it to charge you. We will discover just how much BellSouth’s law will cost the consumers of Lafayette. It’s all more interesting than you think.
As I website owner I believe the content material here is really good , appreciate it for your efforts.
Hi, just required you to know I he added your site to my Google bookmarks due to your layout. But seriously, I believe your internet site has 1 in the freshest theme I??ve came across.
After all, what a great site and informative posts, I will upload inbound link – bookmark this web site? Regards, Reader.
Hi, just required you to know I he added your site to my Google bookmarks due to your layout. But seriously, I believe your internet site has 1 in the freshest theme I??ve came across.
Thank you great post. Hello Administ .
I really love to read such an excellent article. Helpful article. Hello Administ .
Thank you for great content. Hello Administ. casinolevant casinolevant
Nice article inspiring thanks. Hello Administ . Website Giriş için Tiklatın : https://www.melekhali.com.tr/
Nice article inspiring thanks. Hello Administ . venusbet venusbet
Hello! I could have sworn I’ve been to this blog before but after browsing through some of the post I realized it’s new to me.
Everything is very open and very clear explanation of issues. was truly information.
Hello! I could have sworn I’ve been to this blog before but after browsing through some of the post I realized it’s new to me.
Thank you for content. Area rugs and online home decor store. Hello Administ .
Thank you for content. Area rugs and online home decor store. Hello Administ .
Thank you great post. Hello Administ .
Thank you for great information. Hello Administ . sollet extension sollet
Great post thank you. Hello Administ .
Great post thank you. Hello Administ .
Everything is very open and very clear explanation of issues. was truly information.
I really love to read such an excellent article. Helpful article. Hello Administ .
Great post thank you. Hello Administ .
Nice article inspiring thanks. Hello Administ . Website : cami halısı
Great post thank you. Hello Administ .
Thank you for content. Area rugs and online home decor store. Hello Administ .
Thank you for great article. Hello Administ .
Great post thank you. Hello Administ .
Thank you great posting about essential oil. Hello Administ .
Thank you for great content. Hello Administ.
Nice article inspiring thanks. Hello Administ .
Great post thank you. Hello Administ .
Thank you for great article. Hello Administ .
I really love to read such an excellent article. Helpful article. Hello Administ .
I really love to read such an excellent article. Helpful article. Hello Administ . Websiteye Giriş için Tıklayın. a href=”https://cutt.ly/SahabetSosyal/” title=”Sahabet” rel=”dofollow”>Sahabet
Good info. Lucky me I reach on your website by accident, I bookmarked it. Onwin Giriş için Tıklayın onwin
Nice article inspiring thanks. Hello Administ . Onwin Giriş için Tıklayın onwin
I really love to read such an excellent article. Helpful article. Hello Administ . Onwin Giriş için Tıklayın onwin
I really love to read such an excellent article. Helpful article. Hello Administ . Websiteye Giriş için Tıklayın. a href=”https://cutt.ly/SahabetSosyal/” title=”Sahabet” rel=”dofollow”>Sahabet
Thank you for great information. Hello Administ . Onwin Giriş için Tıklayın onwin
Great post thank you. Hello Administ . Website Giriş için Tıklayın. Starzbet
Everything is very open and very clear explanation of issues. was truly information. Website Giriş için Tıklayın. Starzbet
Thank you for great content. Hello Administ. Website Giriş için Tıklayın: tipobet
Hi, just required you to know I he added your site to my Google bookmarks due to your layout. But seriously, I believe your internet site has 1 in the freshest theme I??ve came across.Website Giriş için Tıklayın: tipobet
Nice article inspiring thanks. Hello Administ . Website Giriş için Tıklayın. Starzbet
After all, what a great site and informative posts, I will upload inbound link – bookmark this web site? Regards, Reader.Website Giriş için Tıklayın: tipobet
Great post thank you. Hello Administ . Website Giriş için Tıklayın: tipobet
Hello! I could have sworn I’ve been to this blog before but after browsing through some of the post I realized it’s new to me.Website Giriş için Tıklayın: tipobet
Thank you great post. Hello Administ .
Thank you for great article. Hello Administ .
Thank you for great content. Hello Administ.
Everything is very open and very clear explanation of issues. was truly information.
Nice article inspiring thanks. Hello Administ .
Thank you for great content. Hello Administ.
After all, what a great site and informative posts, I will upload inbound link – bookmark this web site? Regards, Reader.
Thank you for great information. Hello Administ .
Thank you for content. Area rugs and online home decor store. Hello Administ .
Hi, just required you to know I he added your site to my Google bookmarks due to your layout. But seriously, I believe your internet site has 1 in the freshest theme I??ve came across.
Thank you for great information. Hello Administ .
Great post thank you. Hello Administ .
Thank you for great content. Hello Administ.
Hello! I could have sworn I’ve been to this blog before but after browsing through some of the post I realized it’s new to me.
Thank you great posting about essential oil. Hello Administ .
Thank you for content. Area rugs and online home decor store. Hello Administ .
Good info. Lucky me I reach on your website by accident, I bookmarked it.
After all, what a great site and informative posts, I will upload inbound link – bookmark this web site? Regards, Reader.
Thank you for great article. Hello Administ .