How Things Work: AT&T and the Jindals

It’s not like we really need to have the New York Times tell us about Louisiana politics.

It really is not all that complicated:

Louisiana’s biggest corporate players, many with long agendas before the state government, are restricted in making campaign contributions to Gov. Bobby Jindal. But they can give whatever they like to the foundation set up by his wife months after he took office.

AT&T, which needed Mr. Jindal, a Republican, to sign off on legislation allowing the company to sell cable television services without having to negotiate with individual parishes, has pledged at least $250,000 to the Supriya Jindal Foundation for Louisiana’s Children.

Supra Jindal’s foundation has attracted a surprisingly fervent following among those corporations that are regulated by the state but are unhappy that they can only give 5000 dollars as corporations to support their governor. Chief among them is AT&T who, as the story notes, was thrilled to get Jindal to sign off on the so-called “Consumer Choice for Television Act.”

That law was touted by AT&T who wanted the state to take control of the local rights of way away from the communities that own and maintain them and move that control to the state which basically promised to provide no oversight. The whole campaign to pass this law  was pretty sordid and resulted in outrage from and lawsuits by Louisiana municipalities—You can check out Lafayette Pro Fiber’s ongoing coverage at the keyword label “state video franchise.” Start at the bottom of that long page.

Nobody in Louisiana is fooled by such “generous donations” but the New York Times, after noting that Jindal’s top fund raiser is listed as the treasurer for Supra’s foundation—just in case a generous donor wanted to be sure that the “right” people knew about their donation— closed the story with the following paragraph:

“Foundations tied to politicians see their donations dry up when the politician is no longer in power,” Ms. Sloan said. “That demonstrates the real reason the charities get the donations is their political position, not because of the good works they do.”

While the focus in these pages is on local telecom issues and policy Lafayette readers will want to link into the story. The list of oil companies and a local ambulance firm are also of interest.

“Cox builds Internet speed”

This morning’s Advocate weighs in with an interesting view of Cox’s new 5o mbps down/5 mbps up service. The report focuses on the reactions from most of the principals including Cox, EATel and AT&T but oddly excluding a direct reaction from LUS.

The article makes it clear that while Cox denies any direct influence, (apparently the local folks are making that mistake after all) knowing that LUS Fiber is offering a 50/50 mbps fiber-based internet service is the key to understanding why Cox would debut its new flagship service in such a small market.

The gist of the story as far as LUS vs. Cox is concerned is contained in the following paragraphs:

The introductory price of Cox’s “Ultimate” Internet service in Lafayette is $89.99 per month, plus $99.95 for the required modem and an installation fee that will vary by customer, according to information from Cox.

The company has set the standard suggested price for the service at $139.99 a month.

That price is comparable to similar offerings by Verizon and Comcast, though those companies generally provide their top-tier Internet services only in large markets.

LUS Fiber is selling its premium service of 50 Mbps download and upload for $57.95, with no additional cost for installation or equipment.

LUS Fiber customers can exchange information with others on the local fiber network at 100 Mbps.

The 50 Mbps residential Internet service options in Lafayette Parish are unique in the state.

The larger story is that competition is good: Lafayette has two 50 mbps providers, one with real symmetrical service and the rest of the state has NO such providers. The rest of the country will get this service, when Cox gets around to it, for 1 1/2 times as much, 50 bucks a month more…and it looks like the installation fee locally will “vary by customer” instead of being the 99 dollar pro install that others will uniformly pay. My guess is that, more precisely, the installation fee will vary by customer location…if you live in Lafayette and want this then tell Cox that you don’t want to pay for installation—after all the competition, LUS, isn’t charging for it. 🙂 Cox will probably be happy to put you on the hook for only the 100 dollar modem that you will have to dump when LUS gets to you. Like I said: Competition is good.

Reports from other providers flesh out the local and regional competitive picture. AT&T gets pitifully aggressively vague:

AT&T is preparing to launch its U-verse package in the Baton Rouge market with download speeds of 18 Mbps and upload speeds of 1.5 Mbps, AT&T spokeswoman Sue Sperry said.

Sperry said she could not give a specific timeline for Baton Rouge or plans for other markets…

AT&T will be a third run competitor in the city of Lafayette’s already competitive market. Since Cox is battling LUS’s full 50 meg offering with the best it can muster for the lowest price it can muster AT&T will surely be shut out of the city broadband market. It is hard to imagine that they see much upside to the costs of upgrading in-city only to remain in third place. What AT&T has on its side is wireless mobility — but both Cox and LUS have plans to minimize that strong point.

EATel in East Ascension and Livingston parish is a privately owned rural telephone company that has rolled out a FTTH project in some of the fastest growing parishes in the country.

A pocket of 30 Mbps service is offered in portions of Ascension and Livingston parishes by EATEL, a privately owned communication company that launched its own fiber-optic system in 2005.

The company charges $99.95 per month for download speeds of 30 Mbps and upload speeds of 15 Mbps, with $20 shaved off if Internet is bundled with phone and video, EATEL Sales and Marketing Director Brad Supple said.

He said EATEL’s fiber-optic system still has much capacity to offer faster service in the future.

EATel is running a very aggressive billboard campaign in its footprint. But has yet to elicit cheaper new services for its customers.

Finally, the Adovcate story makes sure its Baton Rouge readers understand the pickle they’re in:

In Baton Rouge, Cox’s top-tier Internet service provides standard download speeds of up to 15 Mbps — with boosts of up to 20 Mbps — and upload speeds of 1.5 Mbps.

What the reporter neglects to mention is that AT&T back in March of 08, while it was successfully hoodwinking the state legislature in to passing an industry-sponsored bill to set up state-wide video franchising in Louisiana took the capital city off the table as a player by cutting a separate deal to offer the capital city many of the priviledges it was insisting that other city’s not receive. At the time LPF insisted that this was a ploy and that AT&T was likely to treat Lousiana, and Baton Rouge, exactly as it had treated North Carolina where a similar successful move to infringe on the property rights of communities had lead to exactly NO new service launches by the incumbent AT&T. But the law had helped get a long, long list of cable providers off the hook to the communities whose land they use to provide cable services. AT&T has yet to launch any new services in our state and any it eventually launches in Baton Rouge will be, at best, second rate.

Competition, where you get it, is good. And in our state competition that boosts services and reduces prices has ONLY come from a municipality, a local government. State laws that gift the private duopolists with further privileges have had exactly no beneficial effect. It is never smart to feed the bully. And it’s always a good idea to do it for yourself.

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.

“Officials say new cable law not consumer friendly”

No s**t Sherlock Dept.

The Alexandria Town Talk today ran an article on local challenges to the recently passed “Consumer Choice for Television Act.” Sadly misnamed, the new law was written by the telecom companies and promoted by the same bevy of folks in the legislature who gave us the Local (Un)Fair Competition Act that was aimed at Lafayette’s fiber-optic network. That should tell you all you need to know.

But since we all want more, eager folks that we are, here are the gory details:

On Aug. 15, a new state law switched your local government’s authority to negotiate cable franchises to the state.

More accurately, the law voided local control of locally owned rights-of-way and transferred the ability of local communities to do what they think best with their own property to the state. And not only that, but:

instead of negotiations, cable companies now will have almost automatic access to a new market simply by filing an affidavit with the Louisiana Secretary of State’s Office.

Because the Secretary of State’s Office will have only a ministerial function, there is no regulation such as that performed by the Louisiana Public Service Commission on utilities, city officials said.

What that means is that NOBODY, not even the secretary of state in which your local property rights are parked, has any real ability to exert control over a local monopoly like SuddenLink in Alex or Cox here in Lafayette. The effect is to hand local resources over to private corporations for . . . well, for nothing.

Except, of course, the promise of competition.

Which is not forthcoming. You’ve not seen a single mention of any new competition being encouraged by the new law. And if North Carolina’s prototype law is any evidence (1,2, and especially 3) you’re not going to, either. Two years after their law was passed, there is next to no new real competition and exactly zero such new competition from the likes of AT&T (who pushed the legislation on the basis that they were so eager to get started offering competition that negotiating with all those little local communities was just a pain and a bother). On the other hand, North Carolina’s cable companies have dumped their local franchise obligations by the hundreds and grabbed the state charter. Net result: no new competitors for the cable corporations and fewer local obligations or responsibilities for the monopoly cable guys.

The same story is unfolding here in Louisiana.

In Alexandria a lawsuit challenging the law is being filed by the city. The story behind that story is that SuddenLink (the cableco that grabbed Cox’s smaller properties in Louisiana when Cox sold out most of its smaller, less capable systems) is not meeting its contractural obligations to the community:

. . . during the latest negotiations between the city and Suddenlink Communications, which the company ended when talk about the new law began, the city asked Suddenlink to deliver on its promise to set up a customer service office within the city where consumers could pay their bills.

Officials also said the new law leaves them wondering about the future of the Government Access Channel and whether or not the city eventually could stop receiving a franchise fee. Suddenlink’s current agreement with the city ends on Sept. 14.

According to the story the Louisiana Municipal Association has already filed suit:

Alexandria not only plans to file a lawsuit but also will file friends-of-the-court briefs on other suits being filed by several entities against the law, including the Louisiana Municipal Association, Police Jury Association of Louisiana and Lafayette Consolidated Government, officials said. The LMA filed its lawsuit last week.

McCormick said her organization, which represents Suddenlink, Cox Communications, Charter Communications and other major players in the industry, will intervene as an interested party in any court challenges.

Local readers will note the inclusion of Lafayette. Good. As I understand it, Lafayette’s claim differs a bit from that of the others. Alexandria, apparently, is suing on the basis that its right to govern its own affairs is granted by the ’74 state constitution. Lafayette can also claim local governance rights from an earlier constitution that the current constitution grandfathers in . . . rights that are greater than those granted in the ’74 version. (The law in question explicitly exempts those pre-1974 municipalities and so places like Baton Rouge and New Orleans retain their franchise rights.) Lafayette wants to establish that its city-parish merger didn’t extinguish those rights. What we see are multiple fronts on this issue. The LMA and the Police Jury Association are, I presume, looking out for the rights of non-home rule municipalities (most of the little guys). Look for the Alexandria suit to carry the flag for post ’74 home rule cities. Lafayette, as is common, will carve out its own path.

But the bottom line is that the communities appear to be mounting a major legal fight and are going to support each other’s efforts. That can only be a good sign for the people of the state.

Louisiana Leg Shoots Itself in the Foot. Again

This morning’s Advocate carried the news that the Legislature has again decided that giving a AT&T whatever it asks for is more important than what local communities want and what would be be good for the people of the state. The House passed Senate Bill 807 94-9. With a bit of reconciliation between the two versions it will soon be put on Jindal’s desk and he will not have the scruples that lead Governor Blanco to veto “franchise reform” when faced with a similarly irresponsible bill a couple of years ago. AT&T will soon be free cherry-pick the few wealthy suburbs it would like to serve on the North Shore of Lake Ponchartrain and in places like River Ranch in Lafayette and continue to ignore serving anyone outside of the big cities (the law doesn’t apply to big cities). It won’t have to even talk to those little local people in towns and rural who actually own the property AT&T must use to run its lines and cart home its profits to San Antonio. Big brother in Baton Rouge has fixed things for them so that AT&T (and now all the cable companies) can just ignore local communities.

It’s pitiful the way that rural legislators ask all the questions that would indicate they understand what a bill of goods Bill Oliver and the lobbyists AT&T pay are peddling and it’s sad that our representatives don’t seem to be inclined to learn from the mistakes of others.

Here, as in North Carolina, the big winner is going to be the cable companies. They’ll get out of real commitments they made to real people in real local governments to serve all the people of a community and to return some services to those people in return for using local property.

It’s not that the phone companies don’t get something, even if the big winner is Cox and Time-Warner. The telephone companies get to ignore local communities about all sorts of things now. Maybe you don’t like the idea of a refrigerator-sized box plopped down in your front yard in the right of way that you must maintain by law. Used to be the city could regulate that. No more. A “video franchise reform” law passed in Connecticut demonstrates how that worked. That state passed a law moving all control from the local governments that own the rights of way to the state, just like ours is preparing to do. Now, several years later AT&T is putting huge boxes in people’s front yards, the communities are outraged, and the state is scrambling to figure out what to do about it. The Department of Public Utility Control (DPUC) is trying to force AT&T to deal with local owners and desperately wants to bring in local communities to help negotiate locally sensitive issues that nobody at the state level could possibly know about. (Be careful what you take on legislators…) DPUC has issued a new ruling that outlines methods for securing the cooperation of local owners and municipalities. AT&T is having none of it. And a law the legislature passed, they pointedly note, means they don’t have to listen to those local guys:

In its motion, AT&T also asked the DPUC to clarify its new requirement that AT&T obtain consent of “all municipalities where equipment is placed.”

AT&T argues that existing law gives the DPUC exclusive rights over the placement of utility equipment in public rights of way, and that municipal approval is not required.

“Municipalities don’t have a place in the approval process,” Carlow said. “That’s not to say we don’t want to work with them, but Connecticut law doesn’t require their approval of our facilities.”

Carlow said gaining approval of municipalities would be difficult and time consuming and disrupt the way many utility providers in the state do business.

[emphasis mine]

What they cleverly don’t mention is that they wrote that law….

So the cable companies get to dump their franchise agreements and AT&T gets to do what it pleases in your front yard.

All courtesy of your representatives down in the legislature…

The Cox, Time-Warner and AT&T have got to be laughing up their sleeves at the rubes.

They’re right to laugh. It’s damn embarrassing to watch.

“Cable TV franchise revision advances”

Today’s Advocate covered yesterday’s House Commerce Committee proceedings and the editor even ran the story on the front page. That showed good judgment. The bill is actually much more than most of the “issues” that the legislature spends its time on and the press spills ink on. Unhappily the difference this bill will make will be mostly for the worst.

The gist:

A House committee fought off efforts Tuesday to regulate cable television, then approved Senate-passed legislation that would allow companies to get a statewide franchise to offer cable television service….The legislation would allow companies to seek a statewide franchise, rather than negotiate with each individual municipality and parish….Former Gov. Kathleen Blanco vetoed similar legislation last year [actually two years ago-John] after local governments voiced concerns that there would be a negative impact for them….State Rep. Chris Roy Jr., D-Alexandria, said the legislation specifically does not require companies to build into rural areas or into low-income neighborhoods.

It’s a mess. What is going to happen here is what happened in North Carolina when they passed such a law. There AT&T hoodwinked the legislature with promises that it would spend huge amounts of money upgrading the state’s network and would use the upgrade enter into aggressive competition with the cable companies (chiefly Time-Warner). In fact, they were so eager that they just couldn’t be bothered to actually negotiate with the owners of the land they needed to use: the local government’s rights of way. So the NC legislature gave the corporation “reform” and two years later….well, AT&T hasn’t applied for a single state franchise but Time-Warner and the cablecos have submitted 118 franchises–all of which allowed them to exit significant local responsibilities by revoking previous contracts with local communities. Exactly 1—1!—small new competitor in only 1 locale has provided “new competition” since the law was passed. (We’ve done better than that here in Lousisiana without such a brown nosing law.) The local governments there have lost services, and cash income—income that the citizens will doubtless be asked to replace.

It is simply bad policy to turn control of local property over to some faceless out of state corporation. North Carolina is now trying to patch up a badly flawed law. They shouldn’t bother; admit the mistake and repeal the thing.

I actually spent time yesterday watching the video stream from the house hearing. Sad… In my judgment neither the pro nor the con sides presented their strongest case. The pro side didn’t need to and knew it. But it was disconcerting to see the people’s representatives from around the state flounder and fail to make what should have been a compelling case. (The best speaker by far was a consultant from Shreveport—not a representative of the municipalities and the parishes whose ox is being gored.)

But even more distressing were the raw political facts of the matter. The legislators on the panel exhibited a truly piteous picture of asking, again and again, if AT&T was actually going to use the law to build out to poorer urban areas and rural places. Again and again AT&T said… “No promises.” Just that the chance that some rural folks would get served would be better. Frankly anyone that has watched this issue nationally and read the corporations’ own promises to their shareholders knows that AT&T is planning, at most, over the long run, to serve about 50% of those it has a phone line to today. The “high value” customer. Poor thinly settled rural areas of one of the poorest states in the union? It ain’t a gonna happen. One speaker quoted what he said was a common response to such facts; legislators are reported to have said: “False hope is better than no hope.” That is simply not true. False hope is misleading. And hoping that AT&T will go into rural areas when there is less chance it will here than in North Carolina is just a way to mislead the public—and to delay taking real steps to fix the problem. The legislators also noted that half of the state’s population—the state’s largest cities—would not be included in this bill at all. AT&T’s only even tentative commitment was when they said they’d start in Baton Rouge (sometime) and Baton Rouge is a place where they, in fact quickly got a local franchise and to which this bill will not apply. They wouldn’t make another commitment or even a guess about any other place.

And STILL the legislators line up to change the laws and hand over control of local rights of way to the Lords of the Network on the off chance that some day they’d deign to help out folks outside of the large cities (which this bill, they understood, did nothing to help). The lined up to genuflect even after their questions showed they understood that the likelihood that their law would actually help the state was small to none. They lined up to help even though AT&T said it was a law they wanted to make things convenient for them to do business. They lined up even when they understood that the new law would mean the end of requiring all the people—not just the most profitable households—be offered the new technology. They lined up to help the massa even after the representatives of the state’s governments that are closest to the people, the Louisiana Municipal Association and the Police Juries, stood shoulder to shoulder and vehemently opposed the bill.

When, in Louisiana, you get both the urban Louisiana Municipal Association AND the rural police jury association lined up in vehement opposition and threatening to mount a constitutional challenge if they are ignored and the committee STILL reports it out without opposition or even change you know that the actual representatives of the people don’t matter anymore at all: only the convenience of corporations.

There ought to be some sort of grieving process we can go through when something this blatant reveals the true allegiance of our government. I’m beyond embarrassment and well into shame.

Hey Legislator: State Video Doesn’t Work!

It’s considered wise to learn from the experience of others.

Sadly, State Legislators—or at least our state legislators—fail to follow that simple maxim. If they did Louisiana would not be even considering state legislation yanking local communities’ ability to manage their own rights of way down roads and drainage as the community sees fit. Instead the state is about to pass laws shifting that power to the state legislature and and their “plan” is to then hand that control over to the corporations that are lobbying for the change.

They call it “Consumer Choice for Television Act” and that is a serious misnomer. The name is supposed to indicate that the law will encourage AT&T to offer competition to the cable companies. That is what AT&T, who wrote the thing, says it will do. Some of the legislators voting for it (though you can bet none of those who sponsored it) might even think that is more or less true. But based on the evidence it will not.

That’s what they’ve found out in North Carolina. The story there tells the results of a similar law in North Carolina, Video Services Choice Act. North Carolina, like Louisiana is a smaller, southern, rural state that has been trying to upgrade its image and technological prowess. I’d argue that it has been considerably more successful. Even so the demographics aren’t all that different from Louisiana. A major city or two, a handful of second-tier cities (among which are the more progressive) and a large rural population. It’s a good state to compare to Louisiana.

And North Carolina passed a law like this two years ago—at the time when a similar law was (wisely) vetoed by then-governor Blanco. Here’s what the article says about the success of that law in North Carolina.

When state legislators passed the Video Services Choice Act (VSCA) two years ago, their goal was to increase competition….One of the few things legislators asked of those companies was to keep setting aside space for public access, education and government channels….

But laws often have unintended consequences, while their intended consequences can fail to materialize.

In fact, nearly 18 months after the VSCA was enacted, neither AT&T nor Verizon has submitted a single application to provide video service in North Carolina. Of the 118 new state franchises, almost all were submitted by Time Warner; only two new providers have entered the market; and only one service area has any competition.

Meanwhile, many PEG channels have seen their funding evaporate under the new law.

Here is what the experience of North Carolina should teach our legislature:

  1. Two years after AT&T got the law it sought to “bring competition” it has not brought any competition to that state or to the incumbent cable company.
  2. The dominant cable company and target of hoped-for competition, Time Warner, was in fact the real beneficiary of AT&T’s law and used it get out of contractual obligations to local communities in most of the 118 state franchises actually issued.
  3. The law has had real negative effects: The state legislature’s attempt to protect local interests in PEG channels like Lafayette’s Acadiana Open Channel (AOC) failed. Had local control been maintained that would not have been a problem.

In short: In North Carolina this law has completely failed to bring AT&T into quick competition with Time Warner in the two years since it was enacted. In truth all it has done is to allow Time Warner to escape its local responsibilities.

State video “reform” is nothing of the sort.

AT&T, Cox: Our favorite flavor is Cherry/Red

This week’s edition of the Baton Rouge Business Report contains an informative story about the spirited battle that EATEL is waging against Cox on the eastern edge of the privately-held cable giant’s central Louisiana market footprint.

One comment that immediately jumped out was that the competition between EATEL (with its superior fiber network) and Cox (with its very deep corporate pockets) has prompted an in-your-face element of competition that neither the locally-owned phone company (EATEL) nor the Atlanta-based cable company (Cox) is accustomed to using:

Brad Supple, the director of sales and marketing with EATEL, says the ads represent the first time they’ve countered the competition in such an aggressive fashion. Cox says it’s a first for them, too; the companies have battled for customers for nearly three years.

EATEL’s most aggressive move (detailed in the BRBR article) was the running of ads in Lafayette informing Cox customers here about the special bargain rates Cox was trying to limit to the market in east Ascension Parish, where it competes head-to-head with EATEL.

The ad has been discussed here before, but there is news in the article and it deals with the flavors of the video franchise bills up for consideration in the current session of the Louisiana Legislature.

For starters, it quotes Cheryl McCormick of the Louisiana Cable and Telecommunications Association (LCTA) for noting that one of the three bills up this session dealing with video is actually the LCTA’s bill (HB 869); the other two (House Bill 1009 and Senate Bill 422) are AT&T’s bills and would create the statewide video franchise.

The real news, however, comes from a woman who once held McCormick’s job but now works as Cox’s vice president of government and public affairs, Sharon Kleinpeter. Commenting on AT&T’s push for passage of statewide video franchise legislation here, Kleinpeter confirmed a point made here recently — specifically, AT&T and the state’s largest cable provider are engaged in a carefully choreographed effort to relieve both elements of this communications duopoly from current legal requirements to serve all segments of the communities where local franchise agreements now exist.

Here’s the money passage:

While AT&T’s earlier efforts to get statewide authority have failed, Kleinpeter says Cox doesn’t oppose it as long as it can also get options that would free the company from 55 20-year and 30-year franchises it has in 13 parishes, which have more stringent provisions. So far, AT&T hasn’t agreed to the move, which she says would otherwise give Cox a competitive advantage. Talks are under way on this issue.

This is the Cherry/Red flavor of regulation they love.

That is, both AT&T and Cox (and other Louisiana cable providers) want the ability to provide services only in those neighborhoods where they believe they can make the highest rate of return and not have to provide services, say, all over Lafayette Parish as would be the case under the terms of the current franchise agreement here (and in, the article says, 55 other parts of the state).

They want to be able to legally cherry pick what they consider the best neighborhoods and legally redline those that they want to ignore. Thus, Cherry/Red.

Stunts, Scams & Sirens

The recent — but thus far not detailed — franchise agreement the AT&T signed with Baton Rouge is a public relations stunt, coming as it did on the heels of the recently-announced Cox rate increase. If the statewide video franchise legislation passes, the Baton Rouge/AT&T agreement will be meaningless. The statewide video franchise legislation would lift all local requirements included in that mysterious document before any of it took effect — and, I’ll wager, before AT&T spends a penny on new services in the Baton Rouge market.

This clever dance that these two corporate giants are staging for us is an elaborate flim-flam. The fact is that this legislation will not bring new competition to Louisiana. How do we know this? Because similar legislation has not brought competition to Texas, North Carolina or Ohio.

But, the Louisiana version of this legislation will do long term damage to at least the 55 communities with franchise agreements by allowing companies like Cox and AT&T to discriminate against low- and middle-income neighborhoods in the delivery of modern network services. For that reason it is particularly disheartening to see the head of the Louisiana chapter of the NAACP fall for the competition scam at the heart of this legislation.

The Louisiana Legislature is being bamboozled by AT&T and the big cable companies which are acting in concert to get legal permission to leave significant portions of this state on the far side of the digital divide. “Competition” is a sirens’ call that is only being used to convince our tech-illiterate legislators to sell out the hopes and aspirations of Louisiana citizens and communities to become full participants in the network-dependent global economy.

This legislation serves no other interests but those of the phone and cable companies. It is terrible policy for Louisiana citizens, consumers and communities. Rate relief will not come, but a widened gap between the tech haves and have-nots will.

Count on it.