Tuesday, December 27, 2005

Wow! "PSC sides with Lafayette against BellSouth"

The Louisiana Public Service Commission (PSC) has filed a friend of the court brief in support of LUS with the judicial panel that is to hear BellSouth's appeal this Thursday, reports an article in Telephony Online.

It is real news the PSC has lost patience with the incumbents. I'm happily shocked.

The basis for the Commission's annoyance is BellSouth's decision to use rather than respect the regulatory apparatus of the state. BellSouth's arrogance is costing it its reputation in places where it can ill afford to be seen as acting in bad faith. Here 's the way the PSC sees it:
"The Commission has a direct interest and duty to preserve and defend its Order, which is binding law," the brief states. Noting that BellSouth fully participated in the PSC's rulemaking process, the brief said that the "legal delays for any appeal of the commission's order have passed..." "The Commission's General Order dated 10/4/05 and 10/28/05 incorporating the Commission's decision were not appealed and are no longer appealable," the PSC states. "This court should reject any arguments that have the affect of collaterally attacking the rules."
The PSC seems to understand that BellSouth, having not gotten what it wanted from the PSC, has decided that it will overturn the Commission's decision by trying to hoodwink the courts. The PSC, in its friend of the court brief, objects to this end-run.

Bad Faith

The PSC is effectively accusing BellSouth of "Bad Faith."

This is getting to be a refrain. Recall that this is what the City of Lafayette accused BellSouth of repeatedly during the referendum campaign. Most immediately, Bad Faith is what the City and LUS say BellSouth is doing by even pursuing the set of lawsuits we've seen. BellSouth made a deal in the legislature, a "compromise" which Lafayette feels took away local rights without asking the incumbents to give up anything in return except their hope of simply outlawing municipal competition. Instead of standing by that, BellSouth and Cox came back with the Broome bill in the very next regular legislative session, a bill which tried (and failed) to destroy the project. Bad Faith. Local governments "compromised" again, and a costly referendum was imposed on all municipalities which would follow Lafayette. BellSouth and Cox took many of the points they'd lost on in the legislature to the PSC and claimed interpretations that would have inverted the meaning of the law. The clearly stated intent of the legislation was to allow LUS to "pledge" its full assets specifically in order to obtain the lowest bond rates but the incumbent's interpretations would have driven the rates sky-high by essentially forcing bankruptcy on LUS' telecom division before it could use the full resources of its company. The PSC, with some exasperation, disagreed with the incumbents' interpretation. Again, this whole line of attack showed Bad Faith. BellSouth well knew what it had agreed to in the legislative compromise sessions. But honoring your committments only matters if you are negotiating in good faith. Now the PSC, having watched BellSouth operate in its own offices, thinks they understand the latest ploy. And they are warning the Court that they think BellSouth is operating in Bad Faith --and that they intend to defend their regulations as settled and already having the full force of law.

Now, readers may recall that while the PSC may assume the appeals are over, I have my own questions about whether BellSouth will appeal the PSC ruling by using legal loopholes designed to aid those whose courthouses were destroyed by Katrina and Rita or whose clients or lawyers had evacuated. I'm still waiting til January 4th when that deadline hits. But by backing LUS in this way, the PSC is unmistakably taking a shot across the bow of BellSouth. The PSC is serving notice that it considers the matter closed and does not think BellSouth deserving of a hurricane extension. And it is willing to not only go to court over it but also to intervene in any ongoing court battle that BellSouth might want to bring against LUS that bears on its rules. Now if there was nothing else involved, BellSouth might not give a fig what the PSC wants--a legal fight about the hurricane extension is, after all, just another opportunity for a delay. But BellSouth has lots of other irons in the fire with the PSC . . . most certainly a raft of exceptions and rate increases it will desire as a result of Katrina and Rita. They have got to be concerned that a company which is seen by the PSC as acting in bad faith won't be seen as trustworthy.

Somewhere tonight a team of telecom legal eagles and unhappy telecom execs is trying to decide whether the tactic of obstructionism is beginning to get too expensive. Bullying New Orleans turned into a disaster. The last two times they went to the legislature they came away with less than they wanted, and an open repeal movement challenging the gains they did make is finding some traction in both Lafayette and New Orleans. The PSC seems to be angry enough to step out and tell the courts they think BellSouth is acting in bad faith. The courts dismissed their cases, lecturing them on the law. Even the legislator who "authored" the original law on which all this uproar is based wishes those lawsuits hadn't been filed, since he thought the issues raised had been settled.

The lawyers and the executives have to decide if this road is getting too dangerous. Between the debacle in New Orleans and the PSC's belligerent attitude. I'd no longer be willing to take bets about how that decision will fall.

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