Monday, July 04, 2005

LA PSC Staff Reasserts Fealty to BellSouth

To the surprise of absolutely no one familiar with their lap dog-like fealty to the wishes of BellSouth, the staff of the Louisiana Public Service Commission has confected a preliminary set of rules that run counter to state law, common sense, and trample the home rule charter that governs the parish.

The story was breathlessly reported by The Daily Advertiser in Sunday's edition as though it was earth-shattering news. This kind of hyping of the opposition has become common place in recent weeks as the paper has operated without an editor, and publisher Ted Power has taken to directing editorial coverage.

A prime example of the sorry state to which 'coverage' by The Advertiser has fallen since an actual journalist is no longer in charge of the paper's news section was the Lafayette Coming Together For Fiber Breakfast two weeks ago. The Chief Sock Puppet was quoted (even though he was not present) but the name of the organization hosting the event which prompted the story was not even mentioned. Under the current situation, I guess we should be thankful that Power allowed the comments of the featured speaker to be mentioned at all; the fact that the name of one of three organizations endorsing the project got mentioned should be considered a minor miracle.

But, I digress.

The staff of the Louisiana Public Service Commission has been one of the chief tools of BellSouth in suppressing telephone competition in Louisiana.

A prime example was a case that began in 1999 and involved reciprocal compensation that BellSouth was refusing to pay competitive local exchange carriers (CLECs). These reciprocal compensation agreements were actually created at the insistence of the Regional Bell Operating Companies (RBOCs) shortly after passage of the Telecommunications Act of 1996.

The RBOCs, having the vast majority of customers, wanted to charge CLECs for the privilege of connecting the calls of CLEC customers to the phones of RBOC customers. But, a little thing called The Internet happened and the vast majority of Internet Service Providers (ISPs) connected their servers through CLECs because of the cheaper rates offered by these new companies. As use of the Internet spread, the amount of traffic to CLECs skyrocketed. That meant that the RBOCs actually owed the CLECs money! This was not the way the world was supposed to work.

The RBOCs were outraged. They refused to pay the money. The CLECs were much smaller companies than the RBOCs and not getting that money put a serious crimp in their business operations. So, the CLECs sued to get the money.

In Louisiana, I believe the CLEC that brought suit was eSpire Communications. The Public Service Commission sent the case to an administrative law judge who took extensive testimony and accepted a good deal of evidence from other states. At the end of the months-long case, the law judge handed down a decision favoring the CLECs.

The PSC staff, however, recommended to the full PSC that they reject the administrative law judge's decision and rule in favor of BellSouth — which the commission promptly did, in a 3-2 vote.

BellSouth and other RBOCs used this refusal to pay reciprocal compensation to CLECs as a tool to drive them out of business. When it was finally ordered by the FCC that the RBOCs had to pay the money (BellSouth, according to this 2001 news release, owed $90 million in fees and penalties), the money went primarily to bankruptcy courts where many of the CLECs found themselves in no small measure due to their inability to collect the fees owed them by the RBOCs like BellSouth.

So, the fact that the PSC staff has produced a proposed rule that, though inconsistent with the law, is consistently favorable to BellSouth should come as no surprise. They are, after all, listening to their master's voice.

This much can be said in defense of the PSC and it's staff: the Louisiana Legislature has refused to allow the PSC to retain more of the money it collects in fees from the utilities it regulates. As a result, the staff is small and under-funded. The commission and the staff must rely on 'outside experts' (frequently hired by the regulated utilities themselves) for guidance on issues.

There is no doubt that BellSouth had an active role in producing these rules. One can only hope that LUS's response will result in the PSC staff actually reading the law in question, rather than taking the word of the various BellSouth lobbyists who have, no doubt, been fixtures in the rule making process since the act was passed last year.

The bottom line is that, having pushed for a referendum that they are now poised to lose, BellSouth has fallen back to their ultimate defense which is mastery/ownership of the regulatory machinery in Baton Rouge in an attempt to prevent this project from moving forward.

No doubt we'll hear more in coming days from Bill Oliver and others of BellSouth's 'good faith' offer to do business with Lafayette in an attempt to upgrade telecommunications here. If Oliver wants to prove his good faith, let him pledge now not to file any more law suits to slow this project if it prevails at the polls on July 16.

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