Pat Ottinger, City Attorney, Steps down

Pat Ottinger, the city attorney through the entire (successful!) fiber fight is stepping down. The media are all carrying the story; you can look at fleshed out versions from The Independent, The Advertiser, and The Advocate.

Ottinger is the unsung hero of the fiber fight. He worked long hours and fought tirelessly to make sure that Lafayette got the chance to make its own future in spite of well-funded corporate lawyers, Cox, BellSouth and their stooges in the state legislature. His work was instrumental in defending what we had won after the referendum battle. Lawyers don’t get much glory; that’s not the sort of profession you go into if glory and adulation are what makes you run. We’ll surely get a more complete run-down on his accomplishments in the coming weeks as editors put together their stories and in that larger history the legal battles that swirled around Lafayette’s decision to build its own future will be far from the only story. But that is the one I’ve watched closely and I can say without reservation that Lafayette was well-served.

The city has lost a real public servant, one whose earnestness and self-evident competence should serve as a standing rebuke to those who’d disparage those among us who choose to serve.

Lagniappe: I spent a few minutes looking through old LPF stories…the first one to mention Ottinger by name is worth your review as an example of the value of having an Ottinger on your side: The City replies to the BellSouth lawsuit

“Let LUS join cable cooperative”

The Advertiser opines that the National Cable Television Cooperative (and by implication Cox cable) should let LUS join the coop. They’re right. Some of the highlights from the editorial:

LUS is seeking membership in the cooperative, a body created by the federal government to leverage the purchasing power of small cable TV companies.

…the lawsuit was just another punch thrown in the fight between LUS and its private competitors. The court was right to reject the lawsuit and to allow LUS’ attempt to join the cooperative to proceed.

…Denying LUS membership in the cooperative is fundamentally unfair.

…Originally, the membership applications of LUS and city utilities in Wilson, N.C., and Chattanooga, Tenn., were ignored. Wilson and Chattanooga eventually were granted membership, but not LUS.The private competitors of the other two systems are not members of the cooperative. Cox is. There’s nothing subtle about that.

Indeed, there is nothing subtle about what is going on here. Cox is playing bully-boy with its more than 6 million subscribers (vs. Lafayette’s 52,000 Total households) to keep Lafayette out of a buying coop that is chartered precisely to allow small guys like LUS to compete with the likes of Cox. —Leading to the conclusion that is also the title of the editorial:

Let LUS join cable cooperative.

LUS wins first round with NCTC re FCC (But what about the FTC?) —Updated

LUS has successfully argued that the National Cable Television Cooperative (NCTC) was wrong to attempt to use the Federal Courts in Kansas to prevent LUS Fiber/LCG from complaining to the FCC (or the FTC or, well, anybody they want to) about the NCTC blocking their bid for membership. The case has been thrown out of court with the Federal Court in Kansas stating that it had no jurisdiction and, further, that the planitiff the NCTC was really trying to use the courts as an inappropriate battleground or as way to try and establish a decision before a case is actually brought—neither of which is legitimate:

The timing indicates that plaintiff is attempting to use this declaratory judgment action for purposes of procedural fencing or to provide an arena for a race to res judicata.

Folks who’ve followed the long fiber fight in Lafayette (currently in its seventh year) will recognize this as the latest iteration of the incumbents using the court system to delay LUS Fiber from moving forward. The consistent result for any case pursued to final appeal has been for the final decision to find in LUS’ favor. This is simply the latest instance in which the real result, and likely the only really intended result was to cause delay and expense for the people of the city.

The immediate backstory for this instance is that LUS and two other municipal fiber to the home providers had been denied entry to the NCTC which provides their coalition of small cable firms with prices for content that are competitive with those the large multi-system cable companies are able to get. LUS had to wait during a two year moratorium on new members was put in place during 06 and 07; the moratorium was extended multiple times. LUS Fiber then immediately applied for membership when the NCTC lifted the moratorium on new members. But the NCTC quickly inducted two very unusual new members completely at odds with their previous membership: large cable corporatons Charter and, yes, Cox Communications. LUS and other muni providers were put on indefinite hold—their applications simply not responded to—far in excess of the organizations own deadlines for acting on applications. LUS and the other muni providers finally signaled their intent to ask the FCC for relief on the grounds that this exclusion from the cheaper prices available through the “small provider” coop amounted to anti-competitive behavior. The NCTC quickly offered to admit the other two cities on the condition that they drop their complaint. Neither city faced competition from either Cox or Charter who now had members on the board of directors. They agreed. LUS, who does compete with the largest (brand new) member of the NCTC was not offered membership and the basis for refusal to act on LUS’ application has yet to be explained. Except, of course, by the Lafayette utility which unambiguously points to Cox. No denial or confirmation has been offered by the NCTC.

(If that recounting was too condensed or abridged please take a look at the account on “Stop the Cap” What makes their take even more interesting is the fact that the author has a prior, at one time supportive, relationship with the NCTC. His judgment is damning.)

The Case at Hand:
The NCTC asked the court for a “declaratory judgment” that would have precluded LUS/LCG from seeking any of the remedies that its FCC filing said were possible. Those ranged from asking the FCC for redress, to asking the FTC to withdraw its letter stating that the NCTC was not in restraint of trade, to requesting congressional review, to seeking redress under Louisiana law. The court walked through each claim by the NCTC and essentially found that the plaintiffs, the NCTC, asked the court to assert an authority it did not have—and to effectively reach a decision in advance of having a case actually presented.

Consequences, FCC:
So the complaint to the FCC will not be blocked. When Lafayette will hear back on that is anybody’s guess but the filings with the Kansas court claimed that they thought that the chance of having to go beyond the FCC to receive satisfaction were small. That sounds like confidence to me. That confidence is reinforced when I realize what a potential “nuclear option” the NCTC is risking if LUS and Lafayette were to go to their second option…

With LUS’ complaint cleared to go forward what the NCTC has to decide is what they’d risk by allowing their pro-Cox position to be struck down by the FCC. Mainly it would seem to be that they’d lose their much of their current ability to arbitrarily deny an applicant membership. Their defense would have to put up some sort of reason to deny—something which they haven’t deigned to do to date. Each potential defense, and were Lafayette’s response successful, endangers an excuse which they might want to use at a future date. (For example: it would be risky to try and claim that LUS is using a different, IP-based technology from the rest of their clientle both because that isn’t entirely true—IP is already embedded in much cable tech and they’ve admitted other muni providers using identical tech—but more worryingly because the loss of this excuse would endanger their ongoing policy of refusing to admit small, local telephone companies that are beginning to offer video.) Letting the FCC reach a conclusion on this matter is an open-ended risk for the NCTC; they can’t know how far the new FCC under Genachowski will go. Openly stating that they are excluding competitors of current members would be even more risky, especially if they are successful—where the Federal Communications Commission might let such blatantly anticompetitive activity slide if it thought it served some higher purpose related to its telecom-related mandate it is unlikely that the FTC would be happy to hear that the NCTC had explicitly changed its raison d’être to one that is intends to exclude competitors in order to gain an advantage for its members. The central purpose of the Federal Trade Commission is to prevent collusion in restraint of trade..more on this below.

I won’t be surprised if we soon hear that the NCTC has decided to let LUS join provided they drop their FCC complaint.

…Especially if they consider that even a refusal to act in Lafayette’s favor on the part of the FCC might have truly dire results if the city has to go to its second option.

Potential Consequences, FTC:
The second avenue of redress mentioned by the city’s lawyers was asking the Federal Trade Commission to withdraw its “business letter.” That pretty much mystified me until I dug up the latest version of the FTC’s letter. As it turns out what the letter does is to certify that the FTC does not think that the NCTC operating practices constitute an illegal restraint of trade that would lead them to start enforcement proceedings. But reading the letter makes it clear that its all pretty tentative and as I read it I started to wonder if the new size and constitution of the NCTC after it has bulked up and changed its nature by bringing in some of the nations largest cable companies (it now constitutes the largest group of customers in the nation) would change the FTC’s view. And then I hit the final substantive paragraph, reproduced in full with my emphasis:

For these reasons, the Department has no current intention to challenge the NCTC’s proposed procedures for jointly negotiating national cable programming contracts for its active members. This letter expresses the Department’s current enforcement intentions, and is predicated on the accuracy of the information and assertions that you have presented to us. If the conditions you have presented are substantially changed—if, for example, a major MSO or a DBS provider were to join NCTC or there were other significant changes to NCTC’s active membership—the conclusions we have drawn would no longer necessarily apply. In accordance with its normal practice, the Department reserves the right to bring an enforcement action in the future if the actual activities of NCTC or its members prove to be anticompetitive in any purpose or effect in any market.

That has GOT to send a chill through the hearts of the bureaucrats that head up the NCTC. And may well explain the panicky legal response to LUS’ simple notification of intent to take their complaint to the FCC that the court has here so easily dismissed. Perhaps the FTC, not the FCC, is the entity they really fear. The FCC would merely make them play fair. The FTC could destroy them. That they’ve exposed their organization to such a danger should frighten the NCTC membership. And should thoroughly frighten its membership. If LUS/Lafayette were to pursue this it seems very likely that the FTC would have to seriously reconsider its reassurances. After all the NCTC has admitted not one but two major MSOs (mulitple system operators)—Cox and Charter. And it is acting rather transparently in the interests of one of them. That seems like a huge risk for the NCTC take. Playing a game of brinksmanship with LUS could easily lead to the dissolution of the coop. Something which wouldn’t bother Cox or Charter; they’ve always had the heft to go it alone. In fact they’d find it a lot easier to compete with any of the little guys who now take advantage of the better prices the coop offers. It’s win-win for Cox and Charter—either they gain a price advantage over little LUS that competes with Cox or they gain a price advantage over all the little guys when the coop fails to meet FTC standards. It’s hard to avoid concluding that the little guys that the coop was once run to benefit have been snookered.

At the end of the day the real question remains unchanged; the lawsuit did not serve any real purpose but delay and to drain the resources of the defendant:

With respect to plaintiff’s malicious prosecution claims, a declaratory judgment would not clarify the legal relationship between the parties with respect to the question at issue: whether plaintiff broke the law when it denied defendant’s membership application.

Does LUS/LCG and Lafayette have grounds for claiming that this was frivolous lawsuit? I have no idea. But it certainly has proved, in fact, if not in intent, meaningless.

(Court order link via the inestimable Baller-Herbst List…)

The Lafayette legal team has released a press release that outlines their take on the victory in Kansas.

The Advertiser, the Advocate, and the Independent have all weighed in with responses to the LCG press release.

Lafayette, the NCTC, and National Policy

Both the Advocate and the Advertiser have posted stories focusing on the latest move in the Cox/NCTC versus LUS/LCG contest being gamed out in the courts. In this turn Lafayette is has filed suit to dismiss a lawsuit filed in in Kansas by the National Cable Television Cooperative (NCTC). That lawsuit was filed in an attempt to block LUS from pursuing a complaint with the FCC.

So…this is a suit to block a suit which hopes to block a filing at the FCC…there’s a legal logic in there somewhere I am sure. Or in the words of the Advocate:

Attorneys for Lafayette argued in court filings that the cooperative’s lawsuit is an attempt “to drag a Louisiana municipal public utility into court on the plaintiff’s home turf in an effort to avoid being held accountable for its conduct before the Federal Communications Commission.”

The Advertiser:

The FCC complaint by LUS Fiber argued that NCTCS engaged “in unfair, deceptive and anticompetitive conduct that has the purpose of effect of preventing LUS from becoming a member of NCTC and thereby obtaining the huge quantity discounts and other that NCTC negotiates for its members…” “We have stated in our pleadings filed today that the court should dismiss NCTC’s complaint in deference to the jurisdiction of the Federal Communications Commission, or alternatively suspend any further proceedings until the FCC has decided the case initiated by the Lafayette complaint,” city-parish attorney Pat Ottinger said.

The story closes, appropriately, with the note:

NCTC’s largest member is Cox Communications, LUS Fiber’s primary competition.

That Cox is engaging in anti-competitive behavior through its influence at the NCTC is the core of Lafayette’s public relations case; and, given Cox’s behavior here in Lafayette, it seems entirely likely. The fact that the other two cities that had initially joined Lafayette in its complaint, but were after filing suit admitted to the membership process, did not have the NCTC’s largest member as competition is damning. That these cities’ corporate competitors do not belong to the NCTC tends to clinch the argument.

In fact, that those other cities had competition that does not belong to the NCTC is a strong argument that more is at stake nationally than simply the interest of a mid-size, aggressive city somewhere along Louisiana’s cost and its huge corporate competitor. As I’ve pointed out previously, other members of the NCTC have engaged in the sort of anti-competitive blocking that Cox has used in Louisiana.

The NCTC used to be a mechanism for small, locally-owned cable networks and municipalities to get relatively fair programming prices for their customers. Over the years the market has changed and single-system mom and pop operations have all but disappeared as large and medium size “mulitple system operators” (MSOs) cable companies have grown by leveraged buyouts of smaller competitors—not by successful competition with other cable companies. Successful head-to-head competition requires building a better network and providing better services. (The route, incidentally, that Lafayette has chosen.) Buyouts only require taking on large debt burdens…burdens in fact so large that they can make finding the money to make major service upgrades very difficult.

Now the NCTC is run by debt-heavy MSOs, not mom and pop, local, cable companies. Cox is merely the biggest. Many other NCTC members are no doubt in the same structural position as Cox cable—heavily in debt—and many of those are in the smaller locales that may be actually losing population. These smaller municipalities could reasonably feel that they’ve lost the local businesses to which they felt loyalty to faceless corporations who do even fewer network upgrades than the small local businesses did. Those small cities and towns are the ones that, nationally, are most likely to consider investment in a fiber network an investment in their future.

The NCTC has a legitimate national function…lowering cable prices for the customers of small cable companies and thereby allowing local alternatives to enormous international telecommunications corporations to exist. The outcome of the current conflict over Lafayette’s membership will be a decision-point for the nation. Either the NCTC will provide that service for all small operators or it will turn itself into an exclusive cartel that uses its purchasing power to push out all competition.

That is a national problem; it is not simply a small side fight down in some damp part of Louisiana.

Correction: It’s been pointed out that Lafayette has not really filed suit in response to the suit. They’ve merely responded to the NCTC’s Kansas suit. Point taken. That is actually clear in the press release. I let a fun line get in the way of a close reading…mea culpa.

Google Hires Baller for I Gig Job

According to Marguerite Reardon, a veteran reporter on these matters now working for CNET, Google has retained Jim Baller. For reasons those of us in Lafayette can easily understand Google feels the need to hire seasoned council to defend itself against the incumbent legal onslaught that is sure to come as soon as they begin to consider actual locales. Baller was the national-level lawyer that defended Lafayette throughout our long battle…from the negotiations over the (un)Fair Competition Act to supporting the city through a long series of lawsuits. He’s earned his stripes and the fact that Google is retaining someone with his history shows that they are at least thinking realistically about the political as well as the technical and economic barriers they and their partner communities are likely to face. From the article:

“Even if Google isn’t planning to compete with broadband providers in the near future, it recognizes that network operators may still feel threatened. This could be why the company has hired Jim Baller, president of The Baller Herbst Law Group, as a consultant. Baller, who is working with Google on this project, has been battling incumbent broadband providers for more than a decade, helping municipalities develop projects to build-fiber-to-the home networks in their communities.

Incumbent phone companies and cable operators have lobbied state governments to pass laws to stop these deployments. Some companies, such as Qwest Communications International and BellSouth, which is now owned by AT&T, actually sued municipalities to stop some projects. Baller has been involved in many of these cases, defending municipal clients against phone companies and cable operators.

In some instances, the incumbent service providers have been successful. But in other instances, they have not. A handful of municipally owned fiber networks around the country have won their battles with incumbent network operators, including one in Lafayette, La., and another high-profile network called Utopia, which connects several communities in Utah. With new federal funding pouring into communities as a result of President Obama’s stimulus package, a new wave of projects is emerging.”

There’s likely to be more work than any one man or firm can handle. Google is smart to hire him on now.

“Municipal fiber needs more FDR localism, fewer state bans”

Christopher Mitchell, the best researcher/commentator on municipal fiber in this country bar none (IMHO) has an outstanding essay up on Ars Technica today that you ought to read.

It holds Lafayette up as the premier example of a city that has done the right thing by its citizens. I have to say that I agree. But more than that: this essay lays out as coldly and directly as I have seen it done the rock-solid case for municipal broadband. It doesn’t pull punches, and it doesn’t bother to engage in histrionics.

I cand do no better than to excerpt the case he lays out and emphasize the parts that delight a Lafayette partisan but really, you’d be better served to read it yourself and not bother with my abridgement…it’s not long and it’s well-crafted.

The “broadband market” in much of the US happily provides snail-speed connections at inflated prices when compared to many of our peer nations….Recognizing the disconnect between the best interests of distant shareholders and the best interest of their community, cities across the US have built their own networks, taking a page from the thousands of small cities that built their own electricity networks a century ago when private utilities ignored them…

Lafayette, Louisiana is a good example. The city begged its incumbents to beef up local broadband networks and was rebuffed. This Cajun country community decided to build its own next-generation network. The incumbents argued that the households and businesses of Lafayette had all the broadband they needed and sued to stop the city. This year, after years of litigation, the victorious city began connecting customers to LUS Fiber.

LUS Fiber may offer the best broadband value in the country, offering a true 10Mbps symmetrical connection for $29/month. Those wanting the 50Mbps symmetrical connection have to pony up just $58/month—about what I pay to my cable provider in Saint Paul for “up to” 16/2 speeds.

Lafayette and Monticello were lucky because they had the power to build a digital network. Many communities do not…. Eighteen states impose some barriers to community broadband….Though Monticello and Lafayette have succeeded in spite of barriers, many other communities are unable to persevere, and watch their younger generation leave for modern opportunities elsewhere…

…communities have fought this fight before—when electricity was only available to the urban and affluent. Profit-maximizing companies not only refused to build the grid to low-profit areas but argued those areas should not be permitted to wire themselves. Fortunately, FDR saw things differently:

I therefore lay down the following principle: That where a community—a city or county or a district—is not satisfied with the service rendered or the rates charged by the private utility, it has the undeniable basic right, as one of its functions of Government, one of its functions of home rule, to set up, after a fair referendum to its voters has been had, its own governmentally owned and operated service.

We need FDR to remind us that we are discussing the basic right of a community to invest in its future. Communities must not be held hostage by an absentee company that knows it can overcharge and under-invest without consequence.

Wireless is nice for mobility, but does not threaten the wired monopoly or duopoly. These networks—particularly full fiber-optic networks—are natural monopolies. There is no natural “market” any more than one could imagine a competitive market in streets or metro airports. This is infrastructure—the foundation for many other markets…

Industry-funded think tanks have produced many reports claiming publicly owned networks are failures. Their methodology is suspect—equating long-term investments in next-generation networks with lost money….The truth is that publicly owned networks do quite well. Communities typically borrow from outside investors to build the network and pay off the loans over a 15-20 year period with revenues from phone, television, and broadband services…

State barriers to publicly owned broadband networks may benefit monopolistic cable and telephone companies but can cripple communities within those states. Of course, such policies also give a competitive edge to cities in other states who have moved ahead.

Actually,” says Lafayette’s Republican Mayor, Joey Durel, “I often say with tongue firmly planted in cheek that I hope that the other 49 states do outlaw what we are doing. Then I will ask them to send their technology companies to Lafayette where we will welcome them with open arms and a big pot of gumbo.

Cold weather is gumbo weather and we can sit down over a bowl and watch TV with our grandchildren, and later help with their homework over a medium that we own. It’s been a good week for self-reliance in Lafayette regardless of the icy weather and Mitchell’s essay is nice reminder of how good we have it.

PS: Check out Christopher’s blog:, and for some background on the topic of municipal restrictions his recent post.

Set Top Box Follies: More

I posted earlier on the predictable objections of Cox to LUS’ request for a waiver of FCC regulations that have been waved for everyone else for a long time. I complained that LUS wasn’t being treated fairly and suggested that LUS’ competition and the innovative services it has already offered are just what the FCC has been saying it wanted to accomplish through its regulation.

I’ve snagged Jim Baller’s reply to Cox and the Consumer Electronics Association‘s objections to LUS’ waiver request. (And I am still trying to track down the initial petition and Cox’s written objections, just for the record…if any of you see a copy floating past or know how to burrow at the FCC better than I please drop a line.) —see post script.

Baller does a great job of laying out his points clearly and tightly—it’s easy to see why he has such a good reputation. Here’s an argument extracted from his reply to comments in the case (all emphases mine):

In January 2009, LUS launched a multichannel video programming service over this system, designed from the ground up to operate on LUS’s advanced FTTH network. The LUS video service – offered in direct competition to Cox Communications’ cable service in Lafayette – includes a full lineup of basic, expanded basic, and premium programming in digital form through LUS’s IPTV system…

Cox seeks to thwart or delay this competition by urging the Commission to deny LUS a waiver….

Baller reviews the history in which all the market segments have been granted repeated time extensions and finally unlimited waviers.

By its present petition, LUS requests a waiver similar to those which the Commission has already issued for similarly-situated IPTV system operators. While the Commission’s prior orders included various complex considerations relating to the DTV transition and other matters (addressed in LUS’s petition and below in response to Cox’s comments), the issue in this case is simple and straightforward: LUS would sincerely like to comply with Section 1204(a), but having performed a diligent search, it has been unable to find commercially available navigation devices that would enable it to do so. In other cases in which this has been true, the Commission has granted the MVPDs in question waivers from its rules. LUS merely asks for similar treatment, until such time as commercially available devices are readily available…

Baller points out that LUS’ request can be granted based on different sources of regulatory authority and that in one —

Under Section 629(c), the Commission “shall” issue a waiver from the integration ban “upon an appropriate showing by a provider of multichannel video programming and other services offered over multichannel video programming systems … that such waiver is necessary to assist the development or introduction of a new or improved multichannel video programming or other service offered over multichannel video programming systems, technology, or products….”

Under Section 629(c), “waivers of [the integration ban] are granted when doing so ‘is necessary to assist the development or introduction of a new or improved’ service, such as, for example, a nascent MVPD offering from a new competitor.”

Congress could not have intended that the FCC derail state-of-the-art projects like Lafayette’s by imposing standards that are technologically impossible to meet. For that simple reason alone, a waiver under the Commission’s general waiver authority is appropriate.

I’m enough of a policy nerd to actually enjoy reading such a nicely crafted piece and if you have any such unsavory tendencies I recommend you click through and read the entire thing. If you do you’ll find a few nice hooks left in the text for LUS to pull tight if circumstance warrants. For instance when Cox requests that it be granted a similar waver if the FCC grants one to LUS, Baller replies:

Cox claims that it is already complying with the integration ban. If that is true, then it presumably does not need a waiver, and there is no factual basis for the Commission to grant one.

Of course Cox is not really complying with the law now and there is substantial reason to believe that an FCC dominated by Democrats will be tempted to recognize that and act forcefully on it….leaving Cox to worry that its latest promise to bring its technologies up to date so that its navigation technology will actually be separable from its legitimate security issues won’t work again this time if the issue is opened up before the commission. In the unlikely event that LUS is denied its waiver the tables would be turned and LUS would be in the best possible position to turn the tables and assert that a level playing field required that the FCC force Cox in full and complete compliance immediately. In that case making the open claim that it doesn’t need a waiver opens up the possibility that LUS — or other competitors — will call its bluff. There’s a little of the old “make my day” threat lying just under the surface. I can feel the chest-thumping silverback lying just under the surface of the measured writing and I have to admit that I like it.

A final caveat: Cox apparently argues that only fully digital systems qualify for a waiver. While my inner policy nerd is happy, the geek side evoked by Cox’s silly claim that LUS’ service isn’t all digital wants to point out that LUS is actually providing a fully digital service to every household that buys its service—but that some people choose to have the digital signal transformed (digitally! :-)) into an analog format for use with older equipment. Technically that is exactly what happens. That little twist, on my account, is a nifty bit of digital innovation…and the tongue isn’t pressing too hard against the cheek when I say it. LUS’s system is all-digital already and they’ve creatively found a way to comply with the integration ban for those tiers of service that are sold for use without any set top box or with a DVR, like a TiVo, that the consumer is allowed to buy and freely use as their own navigation tool separate from LUS’…they’ve already gone the extra mile. I’d also lean harder on LUS’ actual innovations, like the 100 megs of internal bandwidth and, especially the internet via the IP set top box that couldn’t be practically accomplished without the box for which the FCC is being urged to deny a waver. But, I suppose the policy nerd that insists on sticking to the central point and dismissing silly claims about digital as the distractions that Cox clearly hopes they will be is right. Don’t muddy the waters or help your opponent do so. But….the FCC might find the truth of Lafayette’s all-digital network compelling policy arguments if they take Cox’s bit of misdirection seriously and the details of innovations that would be harmed by the denial of a waver could only strengthen that part of the argument.

PS—As we came into New Orleans but before I found the signal I could use to post this I got a set of useful links requested of Jim Baller: the original petition, both Cox and the CEA’s objections, and LUS’ response. The obsessive among you might want to peruse them too. As will I if I ever get a reliable signal.

  • (LUS Petition)
  • (Cox Opposition)
  • (CEA Comment)
  • (LUS Reply)

Local Goverments in Court over Telecom Law

Louisiana’s parishes and small cities are in court this week defending local property rights against what was once known as “BellSouth’s Law” according to a short in Advocate. The law, passed by the state legislature, contained something for every corporation: BellSouth, now AT&T, got to ignore local property rights and get permission to build out a cable network without negotiating with the local governments that actually own and maintain the rights-of-way they want to use and the cable companies got the right to simply cancel contracts with local governments. (More coverage at LPF: on the most recent version of the law (especially); some on the first attempt in 06 which was wisely vetoed by Governor Blanco: 1, 2)

The current lawsuit (there promise to be more, Lafayette, for instance, has a separate beef) is about that latter clause–the one that lets cable companies cancel legal contracts without the permission of the local community. The state constitution expressly forbids new laws that abrogate existing contracts. The local governments are using that entrée to try and invalidate the whole law.

It’d be a good thing if they’d succeed. Moving control away from local hands and up the governmental ladder is generally a bad idea. The argument that AT&T and the cable companies use that claims that such a law would enable competition is simply wrong: competition was always possible, exclusive contracts are illegal under FEDERAL law, and NO local government would dare stand in the way of any competitor to the poltically despised cable company. From a purely practical point of view more competition usually means more business and more business means more income for local governments… So the idea that local governments would somehow want to impede competition is purest nonsense and was always meant for the rubes in the legislature. I suspect laying that claim before a judge is a mistake.

Here’s to hoping that the judge shows good judgment. I’m not particularly counting on it.

TV4US Astroturfing Alexandria

This is rich. TV4US, the telco astroturf organization that promoted the recent statewide video law is now back with the same tired “If you disagree with AT&T running roughshod over local communities you are against competition” nonsense.

A “your mail” letter to the editor from TV4US’s Lizanne Sadlier in the Alexandria Town Talk claims that “Some cities are now saying that the Consumer Choice for Television Act, passed overwhelmingly by the Louisiana legislature and signed by Gov. Jindal, is not good for us.” (The “us” Ms Sadlier is referring to is unclear; maybe its those of “us” who live near her up in her Arlington, VA suburb of Washington, DC?—a point raised in a sharp post at CenLamar.)

What Alexandria, the Louisiana Municipal League, and the Police Juries are actually saying (in a lawsuit) is not so much that AT&T got the legislators to enact a law that stripped communities of control of local property for the benefit of their corporation but that the legislators voided constitutionally protected, long-standing contracts the cable companies had long had with local communities. Alexandria is merely the first city to face the consequences of cable companies benefiting “Consumer Choice” Act—which as in North Carolina does NOT include competition. The practical consequence is that the cable companies that TV4US and similar astroturf organizations rhetorically attack in order to get laws passed are the actual beneficiaries; they get to ignore local property rights and do exactly as they please. In Alex that has meant suddenly dropping ongoing negotiations with the city to find out why the cable company was not keeping its promise to open a customer service center. Apparently since the city no longer controls the property they need to sell their product, why bother with them or even return their calls?

Oh, and that competition thing TV4US and AT&T say justified their manipulation of state law? Savvy watchers will note that since that law passed here there has been NO (count ’em, zero) new instances of competition from the telephone companies.

What is going on in Alex is, of course, just the same sort of sleight of hand that went on in North Carolina: the telcos get a law passed that is supposed to “enable” a competition that was perfectly possible without it and then, shock, no additional competition appears. But the cable companies immediately start exploiting their new privileges to shortchange local communities. A little bait and switch?

Getting a little attention from a faux “grassroots” organization for sticking up for local rights should be a badge of honor. Good for you, Alexandria

“Groups attack cable TV change”

This morning’s Advocate has a basic story on the Lousiana Municipal Association and Police Jury’s constitutionally-based lawsuit aimed at the “Consumer Choice for Television Act.” (For a more detailed account see my recent blog post, and for the history you can search our site on the tag “state video franchise.”)

The news contained in the story is that AT&T and the Cable guys agreed, after a meeting with the judge and the associations, not to take advantage of the opt-out provision of the law until the case is settled.

“The act is taking effect, but no cable company has the authority to opt out at this point,’’ Police Jury Association attorney Dan Garrett said.

No additional competition from AT&T and wholesale opting out of local franchises by the cable companies–leading to revenue loss and loss of local PEG channels is what has happened in North Carolina. Louisiana’s local governments are attempting to control this malign effect of the new law.

The LMA-LPJ lawsuit turns on the opt-out provision. The question the court will have to answer is if the law, by providing for voiding a valid contract entered into by home-rule charter communities, has overstepped constitutional provisions that guarantee that home-rule municpal contracts cannot voided by legislative action. The associations are asking that if the finding is in their favor that the judge also rule that the provision that allows the cablecos to get out of its contracts is so intertwined with the rest of the law that the whole thing needs to be struck down. So there are three possible outcomes: the communities can lose altogether, or get a decision that merely lets the clock run out the current contracts, or the decision could overturn the law altogether.

Should be interesting to follow. If they loose you can expect that the lose of revenue will, over time, lead to higher taxes.