Friday, January 27, 2006

New Orleans Bids for Semi-Sovereignty on Telecom

Steve Sabludowsky has gone public with legislation that the City of New Orleans will try to get considered in the upcoming Special Session of the Louisiana Legislature that would open the way for any municipality or parish to provide wireless telecom services for its citizens.

You can request a copy of the law from Steve by going here.

The measure comes in the wake of the nationally-publicized spat between New Orleans and BellSouth over the city's provision of free access to its public safety wireless network to the general public in the Crescent City. In a typical huff, BellSouth Louisiana top dog Bill Oliver withdrew an offer from the company to donate one of its Katrina-ruined buildings in New Orleans to the city for use as a police headquarters. Some deal! BellSouth would have gotten probably gotten a significant tax break for the donation and the city would have been stuck with the bill for refurbishing the building.

I've known about this idea for a couple of weeks and actually tried to talk Steve (and through him, New Orleans) out of this approach when he called me about earlier this month. Having read his explanation, read the bill and talked to him again last night, I'm convinced that this is a well-intentioned but misguided bill that has little chance of ever becoming law.

Let me explain.

The impulse behind this bill is absolutely correct. Local governments need to reclaim the right to community sovereignty that were taken away by the so-called Municipal Fair Competition Act of 2004. That act began its life as an attempt by BellSouth to bar municipalities from any telecom infrastructure or service delivery. It emerged shortly after LUS announced that it was considering building a fiber to the premises project in its service area (mostly the city of Lafayette) in Lafayette Parish.

Thanks to intervention from Governor Blanco, negotiations ensued between the incumbents (phone, cable companies and their trade groups) and the public network folks (LUS, the Louisiana Municipal Association, the Police Jury Association of Louisiana) and the representatives of the various parties.

As in most compromises, both sides came away with parts of what they wanted and some things they did not want.

Lafayette and LUS did not do quite as well in the negotiations as they originally thought. That has been borne out by the string of legal actions BellSouth has launched against the project since the law was passed. As a result of that, Lafayette and LUS have said they want to repeal the Fair Competition Act. The core issue here is that BellSouth never intended for the law to be a true compromise and worked to insert provisions in the law that provided them a platform from which to launch legal attacks against the LUS project and others that might come down the pike.

With this attempt to carve out a wireless exception to the Municipal Fair Competition Act, New Orleans is poised to repeat the mistake that Lafayette has since learned it made in dealing with BellSouth in the legislative process. The company will work under the guise of compromise, but will all the while be working to insert provisions that will undermine whatever compromise the appear to be a party to.

It's called acting in bad faith.

It is the company's documented track record with Lafayette. It will be they modus operandi in any dealings with this proposed "exception". That is, the knife used to attempt to carve out the apparent exception will then be used against local governments that try to use the law to deploy the kinds of services described in it.

There are significant hurdles to be cleared before the bill can be considered in the Special Session, not the least of which is getting it either included in the call for the session or declared germane to the call the the legislative leadership.

Significant challenges will arise in the legislative process itself. The Louisiana Legislature is like a field office for BellSouth when it's in session. The company has a small army of registered lobbyists there (about as large as the group of lobbyists representing the entire gambling industry!). Those lobbyists have long-standing personal relationships with legislators who know "the phone company" but not much about technology; as a result, they can get provisions inserted or removed from the bill (or hijack the entire bill) at just about any spot in the legislative process.

Another political question is whether the Orleans Parish delegation will back the Nagin administration on this effort. New Orleans politics is historically fractuous and new pressures and fissures have emerged in the wake of Katrina and in advance of upcoming municipal elections.

Finally, to support the kind of robust wireless network the bill envisions in a densely populated urban area is going to require a very robust terrestrial infrastructure (like fiber) otherwise, the speeds will drop to near-dial-up levels. The law, as I read it, would leave the Municipal Fair Competition Act in effect over such infrastructure, raising the question of where the local governments would get the infrastructure to support the wireless network.

Rather than leave local governments exposed to a guaranteed prolonged and expensive fight in the courts over the meaning of "is" in such legislation, the correct remedy is to removing the power of phone and cable companies to set any terms on how local governments can respond to the bandwidth needs of their communities.

The Municipal Fair Competition Act gave those companies power over local communities that they did not have prior to passage of that act. The problem is the power they have, not over the infrastructure or modality over which that power extends. New Orleans wants wireless. Lafayette wants fiber. Other communities might like to be able to do one or the other or both. Why should they have to in any way jump through hoops designed by the incumbent network owners in order to do that?

Carving a "wireless exception" is a half-measure that would leave the core problem in place: at least one bad actor incumbent having control over the infrastructure destiny of communities. Instead, let's go for the full restoration of community rights and work together to repeal the Municipal Fair Competition Act.

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