Wednesday, August 03, 2005

PSC Follow Up Stories

This morn we see stories on the PSC from both the Advocate, following up on yesterday's account and from the Advertiser. There is a lot of overlap with yesterday's Advocate story in the Advertiser account--and for that matter in the Advocate's.

In trolling through the articles I did pick up a few tidbits that were new or put know facts in a slightly different light.

From the Advocate:
LUS has disagreed with many of the proposed rules -- which were drafted by a PSC consultant -- saying they go too far or are inconsistent with the intent of last year's legislation, Act 736, the Local Government Fair Competition Act.
That's interesting. We knew that a consultant had been hired. But I had assumed that he or she consulted on, not actually drafted, the proposed rules. Supposedly it is not uncommon to hire a specialist to work on specialized rules. But it brings up a issue common in such cases: just about the only way to gain expertise in telecom matters is to have been a telecom employee; and anyone who works in the area has to consult mainly with...telecoms. Sharing expertise with the PSC staff is one thing. Allowing the consultant to write the rules without sufficient oversight might well explain the draft feel of the proposed rules and their pretty obvious attempt to reinterpret each point in favor of the BellSouth position. I'd be curious to know more about this person....anyone have a name?

The Advocate story also goes through and recites the very tortured rationale BellSouth uses to justify its positions. Make an attempt to force yourself to read them--the disjointed and self-serving the logic is more helpful in establishing BellSouth's desperation than almost anything else. Take a look at the confusions in these two successive paragraphs:

Not requiring LUS to make an in-lieu-of-tax payment each year would let LUS pocket the "imputed taxes" it will be forced to charge customers without passing those payments along to the city treasury, BellSouth writes.

In that case, LUS would be "impermissibly cross-subsidizing" its communications business "with imputed tax dollars that it keeps for itself, rather than turns over for the benefit of government."

The first paragraph is about imputed taxes...and imputed taxes are only imputed; they are not real. They are the centerpiece of BellSouth's attempt to force higher rates on LUS customers. They were never intended to be actual taxes but are only devices that sit on some accounting software that forces the basis for setting rates higher. It's true that they keep LUS from charging as little as it might wish to and so force higher revenues on the company. But the revenue part was only the inevitable side-effect of using the state's Public Service Commission to force up prices. All that is happening here is that BellSouth is attempting to have it both ways: to make sure LUS' rates are high and that LUS realizes no real revenue from them. It's a silly contradiction--and a natural by-product of BellSouth's attempt to force higher rates on the public. The PSC should make them live with the consequences of their fear of competition.

But the really nutty argument is that there is some sort of "cross-subsidization" involved. These fake "imputed" taxes have nothing to do with the LUS system outside of the new Telecom division's accounting software so their non-existent existence can't draw any resources from sewerage, for instance. Since cross-subsidization can't possibly be at stake any further silliness that takes the accounting device for a "tax" shouldn't even come up--but apparently BellSouth thinks that if it piles up the silliness high enough someone might take them seriously. I strongly suspect the PSC is just not that gullible. They don't have to take some consultant's suggestion as the gospel and they all have to run for office in this state again. If nothing else, Lafayette's victory, and even more crucially the pro-local, anti-monopoly basis on which it that election was won, should give the elected commissioners pause. The anti-corporate, pro-Louisiana sentiment that catapulted Huey Long into the governor's chair from a position on the PSC is still potent in Louisiana and can be the basis for successful elections. BellSouth may be a past master at spreading around the cash an election needs to run on...but Lafayette proved that having money is not the same as having votes.

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