Saturday, January 29, 2005


Truth is not only the first casualty in war, it is apparently also the first casualty when telecom execs talk to Louisiana business and political leaders.

The Lafayette Daily Advertiser carried a story in Saturday's paper on the economic development lunch that is part of the annual Louisiana Mardi Gras function in our nation's capitol.

While The Advertiser included only a few quotes from BellSouth Chairman Duane Ackerman in its story, let's analyze them to determine if the BS in BellSouth does, in fact, flow from the top.

Paragraph one:

WASHINGTON - BellSouth Chairman Duane Ackerman urged Louisiana's leaders Friday to avoid ignoring the state's established businesses in a push to attract new companies to the state.

While there is no quote here, if The Advertiser's Gannett reporter accurately captured the flavor of Ackerman's speech, it's safe to say that "the state's established businesses" would include things like incumbent telephone companies — even struggling Regional Bell Operating Companies. Ackerman, whose company is writhing under a market assault in Louisiana by Cox, didn't plead for help, but one can imagine that there's some behind-closed-door whining going on to state government officials that Lil' Ole BellSouth might be in a hell of a jam if the State of Louisiana decided to actually demand state-of-the-art services from its telecom vendors.

Paragraph two:

Speaking at an economic development lunch as part of the 58th annual Louisiana Mardi Gras in Washington, Ackerman said the state stands at a crucial point in its development as it seeks the right balance between tradition and transformation in working to build a strong future for state residents.

Ah, "the right balance between tradition and transformation"! Damned! I think Duane is actually pleading for state leaders to continue to allow BellSouth to levy what amounts to a bandwidth tax on Louisiana businesses and consumers. That "tax," in the form of high bandwidth charges over old infrastructure is being used to fund BellSouth service upgrades in other states and ventures such as paying for the company's share of the Cingular buyout of AT&T Wireless. In essence, Ackerman is saying 'stick with us and we'll keep you in the minor leagues.' Sounds like the recipe for mediocrity one might expect from one who rose through the ranks of a bureaucracy. Good advice for corporate ladder-climbers. Bad advice for states looking to shake their economic doldrums.

Paragraph three:

Ackerman called on the state's business, civic and elected leaders to take a new look at the old rules that govern existing businesses and to help eliminate regulation where customers have choices and where costs outweigh benefits.

Absolute HYPOCRISY!!! Recall, dear readers, that it was Ackerman's BellSouth that ran to the Louisiana Legislature seeking to prevent municipalities like Lafayette from getting into the telecommunications business. That was a blatant attempt to stifle competition. In the Orwellian parlance of corporate America, the bill came out being called the Municipal Fair Competition Act, after much strenuous lobbying on behalf of Lafayette and other municipalities, but the intent was to stifle competition.

This is consistent with BellSouth's long struggle to prevent consumers in Louisiana and other states in its service area since passage of the Telecommunications Act of 1996. BellSouth resisted orders to open its network to competitors, refused to pay money owed CLECs who were hosting Internet Service Providers, and is today refusing to invest in advanced DSL technology because DSL runs over copper elements of its network and doing so would require BellSouth to give competitors access to that portion of their network.

So, the notion of BellSouth as a defender of the rights of choice for consumers is laughable. About the only people who believe that are their local partners in opposition to progress, DULL. But, no one with any knowledge of the telecommunications industry believes it.

Paragraph four:

Ackerman used the communications industry as an example of a situation where technology has outpaced policy and where regulation is hurting.

This is clearly wrong. The Bells have won the right to exclude competitors from their new network infrastructure investments, specifically, fiber. Now, if Ackerman is saying that requiring the Bells to keep their copper networks open to competitors, he's asking to kill the v very competition he was praising (hypocritically, of course) a paragraph earlier. See, what Ackerman and his RBOC cohorts have been fighting for since the passage of the past nine years is for a return of their monopoly status, albeit under the name of "competition." That is, they want to require any potential competitor to be required to build their own networks fresh out of the box. The Bells, it must be noted, built those copper networks when they in fact operated as regulated monopolies. Since the passage of the Telecommunications Act of 1996, this mantra of the Bells to keep competitors off their networks has taken on the air of the guy who was born on third base and claimed to have it a triple.

Paragraph five:

"That disconnect between policy and reality has very real consequences for communities in Louisiana and around the nation," he said. "In an area of rapid technological change, can government really meet the needs of consumers better than private industry?"

Oh, Jeez! Does this guy have no shame? Uh, NO! The fact is that technology is evolving rapidly, but the one constant over the past decade has been the fact that fiber optics have been recognized as the infrastructure of choice, the infrastructure that will not become obsolete. Look at where BellSouth and the other RBOCs and telecom companies in other countries are putting their infrastructure dollars in the communities and projects they most value: fiber optic lines.

What has happened with BellSouth is that technology has outstripped its wallet. If BellSouth had spent as much money on technology as it's spent on lawyers and lobbyists over the past nine years, they'd have better technology in the field. But, BellSouth is a monopolist at heart. It's never been about delivering value to customers. It's all about responding to the corporate vision.

The United States ranks 14th in the world in broadband network penetration. The RBOCs and the cable companies have had control over their corporate investment decisions during the past nine years when that slide has taken place. Rather than invest in new technology, the phone companies invested in buying other phone companies. Rather than deploy new networks, the phone companies spent their time and effort in the courts fighting regulations designed to enhance competition. Rather than innovate, the phone companies preferred to litigate. As a result, cable companies like Cox are poised to eat the lunch of companies like BellSouth because they have been investing in their infrastructure.

The notion that municipal entry is a significant concern to BellSouth is a reflection on just how poorly the company has managed its infrastructure investments. BellSouth's real threat in Louisiana is Cox. The fact that BellSouth chooses not to invest in new infrastructure here explains both why Cox will become the dominant provider of voice, data and video in South Louisiana, but also why municipalities like Lafayette feel compelled to make their own investments in fiber optic networks — essentially, if they don't do it, no one else will.

Paragraph six:

Commending the state for providing tax incentives to new businesses, Ackerman asked that Louisiana not lose sight of the companies that are already there.

Translation: "Even though we're not investing any significant dollars here, don't forget that we've contributed to many political campaigns in the past and — if you roll over and do what we want — we might make some more contributions in the future." Shameful!

Paragraph seven:

"Give all companies incentives to invest," he said. "And, most fundamentally, let us trust the marketplace. That trust has made this country the most prosperous and technologically advanced on the planet."

The incentives Ackerman wants is to either regulate or legislate competition out of the marketplace. Either one will do.

"[T]rust the marketplace"??!!!?? Don't do what we do, do what we say. Ignore that monopolist behind the curtain. The record declares emphatically that BellSouth has NEVER trusted the marketplace. In fact, whenever given the opportunity to trust the market, BellSouth has refused to do so, and instead has resorted to lawsuits to resist being forced to do so.

Well, it's Washington. It's Mardi Gras. The truth, apparently, was not invited.

•* District of Columbia BellSouth Bullshit.

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