"Noble" Ellington, the man who introduced the Local Government Fair Comptetion Act for the incumbent telecom providers will be sheparding a new bill for them this year. It amounts to a "repeal" of the Act for private corporations only. Public property could be used, and the risks of public indebtedness may be freely taken on by local governments--if and only if its new property were to be used for services offered by private, profit-making enterprises. (Is this the free enterprise ethic these guys touted during Lafayette's referendum...it really doesn't sound familiar.) Due to be heard in the Senate Commerce Committee, it's an ammendment to the (un)Fair Act, the second proposed by the corporations since that bill became law. Like the first ammendment this one is meant to "fix" a portion of that (un)Fair Competition Act that wasn't working out to the advantage of BellSouth and Cox. There's the old story and the new story, but it' s the same song.
You can see the ugliness by streaming video by clicking through the Senate Commerce Committee's link on the legislative front page at 9:30 this morning. It's a bit down the published agenda but might be moved up...
The first time BellSouth and Cox returned to the well was with the infamous Broome Bill, which tried to fine Lafayette to the tune of 900, 000 dollars a year if the city actually had the nerve to build a fiber optic network of its own. (Read all about it.) The issue then was that BellSouth and Cox had only belatedly realized that taxes they'd had imposed on LUS would not have the intended effect of driving up prices for LUS customers (which purpose is central to the law) since LUS was already paying more in "in lieu of tax"--which they could count against the new taxes BS and Cox thought they'd imposed. Oh oh..no competitive advantage. Whoopsiee. So they tried another way: they'd void Cox's contract and make LUS pay the monies that contract said they owed the city-parish for 10 years. Really. You can't make this level of arrogance up.
A firestorm of protest from Lafayette and municipalities state-wide beat back the worst portions of the bill and an embarassed Broome backed off much of the bill. BellSouth and Cox had to settle for tacking a new referendum requirement onto the bill.
This year the issue is a little different...then it was about stopping municipalities from getting into "their" business in any way. This year they've realized that they earlier cut off their nose to spite their face. They put such heavy restrictions on municipalities that they would never be able to take advantage of Louisiana cities--and that was never the point.
Let me explain: the original bill contained no exceptions for "public-private" partnerships. In fact it contained a raft of hedges against using private companies as cover for public ownership of the infrastructure. Times change. Suddenly and unexpectedly, Earthlink, Google and others are rushing into "public-private" ownership structures of various sorts with municipalities like Philadelphia and San Francisco all across the nation. It's starting to look like their competition will help fund municipal networks. At the same time they lost in Lafayette and are faced with a purely public competitor there whose network will be vastly superior to both BellSouth and Cox's.
Public-private cooperation suddenly doesn't seem like such a bad idea. Half a pie is better than being cut out of the deal altogther. BellSouth, for sure, has a long history of using public monies to build its networks and then extracting monopoly rents. It may have forgotten that lesson for awhile. Similarly Cox and the cable companies have a lot of experience in "partnerships" with communities that essentially lead to monopolies for cable. It too may have had a little senior moment.
BellSouth and Cox have both made wistful remarks about offering to "help" New Orleans with it WiFi network. Surely they meant they wished they were the ones inside the exclusive deal New Orleans appears to be cutting with Earthlink. However, under their own law that would be illegal. But it would be just too obvious to "repeal" the portions of their law that were suddenly inconvient while they had an offer on the table.
So, having read the tea leaves a little better BS and Cox are seeking to repeal the parts of their law that would keep them from joining into entering into exclusive deals with local governments to exclude their fellow private "free marketers." Irony, apparently, knows no bounds. The new law would make such public-private partnerships exempt from the draconian restrictions of the Local Government Fair Competiton Act; making it almost impossible for local governments to go it alone without "sharing" their resources with companies that would use public property to profit off the owners of that property.
Here's my guess: this "little" change passes with very little debate. BellSouth and Cox use its passage to beat back New Orleans' attempt at limited repeal of the (un)Fair acts wireless provisions, saying there is no longer any reason that New Orleans can't take Earthlink up on their offer--or accept deals that they, together or seperately propose. Earthlink has already indicated it doesn't want to invest 10-15 million in an investment that is dependent on a struggling New Orleans adminstration winning a referendum vote while BellSouth and Cox are waging a public relations war against it. If I were Earthlink I'd back off my very generous offer which leaves ownership of the free, ad-supported network in the hands of New Orleans. Suddenly, like white knights come to the rescue one or both of the incumbents come forward and offer to take over (emphasis on take) the current network and provide the public with a "reasonably" priced network that would, by dent of the (un)Fair Competition Acts restrictions, never be powerful enought to compete with their own offering by supporting VOIP or streaming video. WiFi remains a neutered technology in Louisiana and a publicly developed network's resources are turned into a nice, if minor, revenue stream for the incumbent/s.
BellSouth and Cox must be very happy that Lafayette's bills that would have repealed the act entirely aren't on the table while they go back to repeal the portions they don't care for.
It's the same song:
Old story or new, its all the same song: The Local Government (un)Fair Competition Act is a vehicle for the incumbents to work state law to their advantage. The legislature has time and again rolled over to these corporations in the same way that has proven embarrassing to the state for generations--most recently with the House Commerce Committee's vote to send BellSouth's state-wide video franchise to floor over the strenuous objection of both the cable industry, the Louisiana Municipal Assocition and the Louisiana Police Juries Association.
The Local Government Fair Competition Act must be repealed.
(It doesn't have to be this way. We could stand up to these guys and make our own decisions about what is best for our local communities. Today's story on how quickly even huge energy corporations fold when the state stands up to them should be a lesson. ATT/BellSouth is going to build its network in Louisiana whether or not we hand them extra profit, public resources, and shut out local governments. The only question is how much we are going to let them take us for.)