Wednesday, January 26, 2005

BellSouth Louisiana: Suit to Defend Bandwidth Tax A Desperate Act of Doomed Company

The anger that Mayor-President Joey Durel (and probably Terry Huval) feels as a result of BellSouth's 'friend of the DULL' suit over the issue of which law sets the petition rules on the LUS project is palpable.

BellSouth is talking sweet one day and suing the next.

The company has a profound personality disorder and it has manifested itself in a number of ways in the LUS fiber issue. Rather than attribute its sometimes bizarre behavior to malice, I prefer to read it as sporadic psychosis induced by a series of unpleasant and untenable choices the company is being forced to make these days, particularly in Louisiana. This once-mighty monopolist is on the ropes in Louisiana and its leaders know it. Making matters worse, there's just nothing they can do about it.

To understand what is happening, we need to look a bit beyond Lafayette out into Louisiana as a whole. BellSouth is in deep trouble here. They are in trouble primarily because Cox has bought and grown itself a very large footprint across much of South Louisiana. Cox is offering voice, data and video over networks that they have spent many pretty pennies to upgrade. Cox's networks may be near state of the cable art — so, nowhere near what LUS will offer in terms of robustness — but they are significantly better than what BellSouth has in the ground in South Louisiana.

Now, back in the halcyon days of their so-called alliance with Cox in opposition to the LUS project — way back in the late summer of 2004 — BellSouth spokesmen were making strange gurgling noises about what wonderful things the company would be able to do with upgraded formulas of DSL (Digital Subscriber Line) technology. 'It's gonna get a lot faster and we'll be able to run video over it,' they said — or words to that effect.

Well, they're absolutely correct, there have been some technological innovations on the horizon in DSL technology which might, in fact, let a phone company run some video over those lines.

But, there's a HUGE problem with this entire scenario. That is, the 'last mile' (actually, up to about 15,000 feet) of a DSL connection can run over copper. Why is that a problem: Well, the FCC has ruled that Regional Bell Operating Companies (RBOCs) have to let Competitive Local Exchange Carriers (CLECs) have access to their copper infrastructure — which the RBOCs (like BellSouth) detest. There was a good bit of RBOC crowing among last year when the FCC said RBOCs could exclude competitors over new fiber networks. If only the Michael Powell-led FCC had locked CLECs out of the copper lines, it would have been a perfect RBOC world.

So, while there may, in fact, be technology coming down the pike that could theoretically enable RBOCs like BellSouth to ramp up their DSL capacity to the point where they might actually be able to run a few channels of pre-HDTV video over that copper infrastructure, their rigid opposition to the idea of letting competitors have access to the copper that enhanced DSL would run over will prevent them from allowing themselves to deploy this technology.

Why is this critical? Well, it seems that the BellSouth Louisiana crowd can't convince the corporate types in Atlanta that investing in new infrastructure here makes business sense. That's understandable due to the rather large shoe Cox has lodged firmly on the larynx of BellSouth Louisiana by way of its Triple Play over its newer infrastructure.

See, the 'Louisiana Logic' out of Atlanta is that BellSouth can't justifying any significant new infrastructure dollars here until it has some idea of what the bottom of its share of this state's market looks like. That is, why invest significant new dollars here when we don't know if we're going to end up with 60 percent marketshare, or 20 percent market share. Cox is fervently committed to helping BellSouth find that market bottom just as quickly as it can via new services over its (comparatively) enhanced network.

So, cut off from the capital it would take to build out new fiber infrastructure, deploying DSL-enhancing technology would look to be the cost-effective way of enhancing BellSouth's service offerings here. Except, that because it runs over copper infrastructure — read that "open to competitors" — the gang back in Atlanta won't even allow those much smaller amounts of money to be spent here.

So, BellSouth Louisiana is doomed. It can't get the money it needs to build a world-class network that would let it fend off Cox and any other competitors. But, the corporation's virulent anti-competitive, monopolist DNA won't let it invest in the technology which might at least enable it to cling to a few points of market share with its copper.

The talks with LUS may well have been some form of exquisite torture BellSouth inflicted on itself, knowing full well that Atlanta would never let the company buy access over the LUS network for the same reason they don't want any competitor to access their network: it's all about being a monopolist and that's all about not sharing.

Filing the lawsuit over the DULL petitions is an act of desperation. Cut off from big infrastructure bucks by Atlanta and cut off from the technology that could make those old copper wires useful for a few more years by its corporate culture, BellSouth Louisiana has entered into what will likely be a precipitous decline.

It's already evident in some ways: A few months ago, BellSouth Louisiana's Bill Oliver was feigning chumminess with Cox Regional VP Gary Cassard. Today, he's feigning chumminess with the DULL crowd, seeking to defend his company's bandwidth tax on businesses and consumers by supporting handful of ideologues who worship the ground he walks on.

What a long strange trip this must have been!

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