Friday, August 11, 2006

Opie Meets The Godfather

As the LUS fiber project continues its journey through the courts, it is worth noting that it did not have to be this way.

That this project finds itself in legal jeopardy today is a direct result of the failure of the Durel administration to recognize the nature of its primary opponent on this issue, BellSouth. BellSouth has been intent on killing this project and any other project like it from the start. That's why their initial legislative response was a bill to prohibit local governments from getting into the telecommunications business.

The Durel administration and its advisors failed to recognize the way BellSouth and other Regional Bell Operating Companies (RBOCs) have used the legal system to thwart competition and to strangle competitors. And it is that failure that led it into two strategic mistakes that may yet prove fatal to this project.

The first failure was to agree to the terms of the Fair Competition Act of 2004.

It may be the nature of legislative compromise for parties to try to get at least some of what they want in what amounts to the horse trading that is the legislative process. Clearly, the team of advisors working on the Lafayette side of the Fair Competition negotiations did not pay close enough attention on what they were allowing BellSouth to insert into the bill, apparently focusing on the elements in the bill they felt Lafayette needed in order to proceed. Remember that the Lafayette fiber project had already advanced beyond some of the stages covered by the bill that ultimately became law.

I believed then (and have said so on a number of occasions since) that Lafayette was content to leave barriers erected behind its project in the belief that the law would allow our city to proceed on its project. It was short-sighted and it was, in fact, a colossal misreading of the situation.

But, the real mistake was agreeing to the legislation at all. People on the Durel team and in LUS have told the story how they had been assured by Governor Blanco that she would veto any bill that they could not live with. They naively agreed to this law and, in the process, set the trap that has now ensnared this project.

Why do I say that the Durel administration was naive?

Because the history of the phone industry is one defined by the ability of the incumbent carriers (in this case BellSouth) to use the legal system to resolve and eliminate competitive threats. By agreeing to a law regarding municipal telecommunications systems, the Durel administration was putting the ultimate fate of the project where BellSouth wanted it and where it operates best: the courts. That's right! It's better in court than it is winning its way in the Legislature and at the PSC.

The ultimate mistake that the Durel administration made was in assuming that it could negotiate in good faith with BellSouth on the provisions of this act. The administration gave BellSouth the benefit of the doubt which they clearly did not deserve.

During the fiber campaign, the administration appeared to have learned from that mistake (helped along, no doubt, by a round of court cases involving lawyers from BellSouth). BellSouth's various, transparently phony attempts to demonstrate that they had great plans for network infrastructure in Lafayette or were possibly willing to strike a deal with Lafayette were recognized as being the desperate acts of a desperate company that they were.

With the fiber victory behind us and more litigation ahead of the project, the Durel administration apparently forgot what it had learned and made its second glaring error in judgment this year going into the Regular Session of the Louisiana Legislature.

As you may recall, Lafayette had a series of bills introduced that would have repealed in part or in whole the Fair Competition Act. All but one of those bills was withdrawn in exchange for a pledge from BellSouth not to engage in any further litigation against the LUS project. Knowing full well that the agreement would not end the litigation, the Durel administration agreed to this bone-headed deal that cleared way for state approval of the AT&T buyout of BellSouth and removed Lafayette (and its influential legislative delegation) from the battlefield in the fight over the statewide video franchise bill BellSouth sought.

Let's see: you give your opponent everything they want in exchange for approximately nothing! Heck of a deal!

As you know, that legislation (HB 699) won approval from both houses of the Legislature but was vetoed by Governor Blanco.

What's that old saying? "Fool me once, shame on you. Fool me twice, shame on me."

The LUS fiber project finds itself in legal jeopardy today because the Durel administration has at key moments of this multi-year, multi-chapter drama played naive Opie to BellSouth's cynical Godfather. At this point, not surprisingly, the score reads: "Advantage Godfather."

It didn't have to be this way.

10 comments:

Anonymous said...

Are you sure you should point the blame on Joey? Although I do agree he is responsible for knocking the dust off this proposal and taking an aggressive approach to introduce it to the council and the public he didn't do this on his own. Lafayette and LUS hired a team of attorneys from Washington and Baton Rouge. These were Telecom Attorneys including Mr. Gordon Polazolla who has worked with the LPSC on telecom issues for years. Mr. Baller, a National Telecom Attorney, who agreed to the terms of the Fair Competition Act and insisted the Act be called the Local Government Fair Competition Act. Pat Ottinger, City Attorney who heard the first 2 cases in court but could not find it in himself to take another beating.

This is the 3rd suit Lafayette has lost pertaining to the fiber initiative. If we were keeping score, and Lafayette were serving, I would say it was "Love-40." This would make the Supreme Court hearing the game point.


P.O. Stacomment

Anonymous said...

Or maybe, the Act, as written, was the best they could get support for in the legislature and figured that they could just violate the law and that with enough intimidation no one would dare to stop them? Hey, they almost got away with it.

So it’s either as you say, this administration is incompetent and/or they are so arrogant that they thought them selves above the law.

And maybe, just maybe, the legislature saw the cross subsidy as bad public policy and would not endorse it and they knew exactly what they were voting on.

John said...

More anonymous BS.

Folks who play games with this as if only the city every lost must wonder how the game got to the place the city and the PEOPLE won every round and the losers took the game to court to try and get it reversed. So far they've not succeeded in that either.

They didn't get what they wanted in the leg. They lost at the city council. They lost, several times, with court cases or withdrew them. They failed to hoodwink us with fake academics, fake bloggers, or fake push polls. They lost before A VOTE of the PEOPLE. They lost at the PSC. .....They're persistant losers and that is all that can be said for them----and all that can be said for their apologists like these anonymous guys who are afraid to put their name to their BS.

We get the damn ball within inches of the end and they are trying to run out the game with technicalities or to get the game called.

The pretense that this level of obstructionism is somehow the city's fault instead of the obvious bad behavior of a powerful set of corporations that don't want any competition is so absurd as to be willful.

These people don't leave their real name because they are playing stupid games. Trouble is nobody who knows the history of the unbelieveable arrogance and the raw exercise of power politcal, AND Economic of BellSouth and Cox in Lafayette can look at tripe like this without gagging or giggling.

We here in Lafayette watched it unfold in front of us. We know what happened. And it is clear what is happening now.

"greedy out-of-state monopolists" in the quite accurate words of Joey Durel.

GumboFilé said...

Interesting. A partisan post, critical of the Republican mayor, posted by our Democrat congressional candidate. I don't remember seeing this before on this blog. They are allies on LUS FTTH.

David in Grand Coteau

Mike Stagg said...

David,

I testified before the Louisiana Senate Commerce Committee in 2004 against the legislation that became this act. I have told people in the administration and on their team since then that I thought this was a bad law and that they were mistaken to agree to it.

I was a member of the 'Citizens Advisory Group' when LUS first deployed their fiber rings in 2000 and encouraged them to pursue fiber to the home/premises. I supported this project when they announced it. I supported the project when it came to a vote. I support it today.

I never signed away any right to speak my mind when I supported that project. I have never supported that law. None of that changed when I decided to run for Congress.

Sorry if honesty and consistency are disorienting to you.

Anonymous said...

Speaking of honesty and consistency, have you read the ROAD TO INNOVATION IS OPEN? You might like it.

GumboFilé said...

Mike,

I'm not disorieted at all. I just noticed the partisanship and the timing. Like many folks, I too easily forget things like this if it's not election season. It's one of the weaknesses of democracy. Incumbents bank on it.

FYI, this is not the place for this (sorry), but even though you and I probably disagree on most issues that either of us considers important, unless a more attractive candidate enters the race, I'll probably vote for you. You're not Republican and you're anti-war. Right now I can't think of anything else that matters as much. I will tell people and I will tell them why. I might even blog about it, though I suspect that I'm my only reader.

David

Anonymous said...

Mike
I recall you supporting an open system at one point which is what Tim Supple proposed on this site. Do you still support that type of system?

Nick Istre said...

I am another supporter of Tim Supple's proposal. In fact, we seem to be have a working model of it in Utah's UTOPIA project, where the government builds the fiber infrastructure, but private companies offer internet, phone, and TV over it (I've read of AT&T and two local companies offering service, so far). Fiber users there are reporting 15 Mbps down and up for around $45 per month (abeit, with a 100 GB per month cap, possibly depending on the company).

As a computer science graduate from U.L. Lafayette, it's pretty disheartening to hear from other C.S. graduates from my classes having problems finding employment in technology in Lafayette. Most seem to have moved out of the state; some have gone back to school for their masters. I was very lucky to find a system analyst position for a small company in New Iberia, but moving out of the state is becoming a more enticing prospect, especially with these recent developments.

I would love to stay. Most of my friends and family are in Lafayette, but to advance my own career and personal enjoyment in technology, I'll have to leave.

Even if I think Tim's proposal is superior, I will still support the current fiber plan, as I believe it is better than the status quo in many ways.

Anonymous said...

Have you looked into NuComm? They will be looking for qualified employees. This may allow you to remain in Lafayette.