Sunday, June 25, 2006

Cox's latest anti-competitive outbreak

In Cox's latest tussel with the people of Arizona the Arizona equivalent of the Public Service Commission wants to fine Cox $2 million dollars for anti-competitive behavior.

As reported in the Arizona Republic, the basic story is that Cox entered into an illegal agreement with the developers of a huge housing tract (17,000 homes) to restrict telecom "easements" (known as rights of way when public entities are providing them) to Cox and Cox alone. Nobody in that 17,000 home would have had any choice about where to buy their phone, internet, and cable TV.
The Cox-Shea Sunbelt deal came to light after a tiny telephone company, Accipiter Communications, filed a lawsuit in Maricopa County Superior Court and a complaint with the commission saying that the arrangement made it impossible for other phone companies to sign up Vistancia customers.

Cox Communications paid Accipiter $1 million to settle the lawsuit.

Under the Cox-Shea Sunbelt arrangement, Peoria allowed the developer to take control of communications access, known as an easement, to govern which companies could provide service to the 17,000-home community.

Cox paid a $1 million "licensing fee" to the developer for the right to construct the wires and sell services to about 45,000 residents.
The ugly word is monopoly. Cox bought a monopoly. Because that is the way they prefer to do business.

What the article doesn't mention is that this isn't new behavior on the part of Cox. In 2005 they got nailed on a similar charge. Then back in 2004 the company engaged in some truly outrageous attempts to buy signed promises regarding legislators' votes on a bill (that had previously failed) to force satellite provider to pay a special tax designed to drive up the cost consumers paid for satellite. The rationale? Satellite providers didn't have to pay franchise fees to use public property and so cable wanted "a level playing field." Trouble is, the reason why satellite providers didn't pay rent for using public property is because they DON'T USE public property. Which didn't keep Cox from trying to ram through a law whose purpose would have been to force satellite providers to pay for an expense they didn't have so that Cox wouldn't have to lower its prices to compete. Awww...poor cher bebe.

If that's not monopoly behavior it'll do till a better example comes along.

This is the same Cox that has the gall to claim to be fighting for free enterprise and a "level playing field" whenever it wants to stifle competition from municipal providers like LUS.

This isn't just a problem for Arizona. The pattern is clear right here in Louisiana. Readers with a long memory will recall the way that Cox has fought to use the state to increase the costs that Lafayette consumers who choose LUS will have to pay. As in Arizona, it takes the form of getting the state to do their bidding. The first example was the passage of the Municipal (un)Fair Competition Act where, among other anticompetitive strategies, the state is forcing LUS to set its rates as if it were paying rent to itself on the right of way property Lafayette owns. (Plus, it has the expense of actually maintaining the property as well!) The idea is to make it illegal (yes, illegal) for LUS to drop its prices to just what it costs to provide the service. That would be too "competitive" for Cox. So faced with choice between lowering their prices to compete or losing business Cox, in Louisiana as in Arizona, chose the third path: demand that the government to raise the costs of your competition. (It worked in Louisiana; it failed in Arizona.)

Now admittedly, Cox shares the blame with BellSouth for the way state law will force up LUS' prices. But the Broome bill...ah, the Broome bill, written by Cox and introduced by a sponsor who later complained that she didn't understand what was in it, gives us a pure Louisiana example of Cox's unfettered anti-competitive tendencies. Among other dark intents, the Broome bill would have fined the people of Lafayette almost a million dollars if they had the courage to vote in a little competition for the monopolists.

Make no mistake, the pattern is clear, here, in Arizona and across the country. These guys are not fighting for any American ideals or for free enterprise when they try and shut out municipal and private competition; they are fighting to remain monopolies.

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