Wednesday, June 14, 2006

TheInd on BellSouth's Law

This week's Independent picks up the story of BellSouth's state-wide cable franchise law just as it is about to come to a close. (The bill is on the House agenda today and the Senate-amended version should be voted on there by the end of the week at the latest.)

The story is pretty good as far as it goes. The quotes from local leaders are great, for instance with Don Cravins, the senator who gave a great speech on Senate floor, complaining that it shouldn't be a hardship for a company of the size of AT&T to negotiate with municipalities:

“I think a multinational company should have the means to do that,” said Cravins, who is now also running for mayor of Opelousas. “It doesn’t matter how you couch it, this is an AT&T multi-national conglomerate bill that is ultimately going to Wal-Mart the entire cable industry in Louisiana.”

And:

Lafayette City-Parish President Joey Durel concurs with Cravins. “What I keep saying,” Durel says, “is that people trust local government more than they trust state government, just like they trust state government more than they trust the federal government. And so once again the state government has chosen to get involved in local policy, and this will ultimately have a negative effect on local government, which will obviously have a negative effect on the people that we try to serve.”

Based on Lafayette’s own contentious history with BellSouth, where the company has repeatedly sued the city in order to block Lafayette Utilities System’s efforts to get involved in the phone, Internet and cable business, Durel is wary of the company’s intentions.

“We kept hearing for the past two years: level playing field,” Durel says, “and now what you’re seeing is the huge conglomerates trying to not play on a level playing field with each other.”

Durel is right, of course, as with the Local Government (un)Fair Competition Act, the real purpose is to make sure that the incumbent monopolists have an unfair advantage over any possible competition. Read the story and you'll see that getting services out speedily and having parity with the cable companies have nothing to do with: the local governments offered to make sure that the phone companies could compete within 30 days of expressing a desire--all they had to do was accept the same contract conditions that the local cable company was already operating under. NO way said BellSouth/AT&T. The real story here is about eliminating the "irritant" of local governments who demand that all be served if a company is going to use community property. It's irritating when the owners of property all ask to be served if what you want is to use their property to only serve the most profitable. It's irritating to be held accountable by all those little police jurors and city councilmen if you don't live up to your agreements (its much easier to snooker state or federal legislators as history clearly shows). BellSouth can now decided to serve once side of street but not the other, to serve River Ranch but not North Lafayette, to run lines to fancy new subdivisions but let other areas they pass over on the way to those glitzy new places wait forever while they pump up their profits while using public property.

There's nothing in the new law--as there are in current cable contracts--that would force BellSouth/AT&T to charge the residents of different areas of town differently for the same service. The companies could conceivably ask for block by block "state franchises" and charge whatever they thought would be to their advantage. Nothing legal prevents them from offering different prices where they have competition than across the street where they don't. Welcome to a "level playing field" and the benefits of competition.

Since cable, in the end, got themselves written into the law (on dubious constitutional grounds) they'll have the same privileges. State law now lets cable companies (and only cable companies) break their contracts with communities whenever they want. Over time you'll see the same discrimination shown by Cox -- just as soon as it becomes more profitable to use their upgrade money elsewhere they'll be free to abandon the poorer parts of communities. Note that it won't necessarily be that those areas will be unprofitable--only that it will be more profitable to move their money to a higher yield area.

Can you say "digital divide?" I knew you could.

Durel's remarks close the story. He's got a point about Lafayette. But there will be real suffering in the rest of the state.
Durel hopes it will ultimately be a moot issue. He says once LUS begins offering its telecommunications package (the plan is currently tied up in lawsuits brought by two Lafayette residents), it won’t matter how the incumbent cable and telephone companies are delivering their services.

“Our technology,” Durel says, “is going to be so far superior to what either one of the companies has to offer that we are going to be the competition.”

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