Friday, January 05, 2007

Telecom turf wars

As we wait for the outcome of our own Telecom turf battle in the Louisiana Supreme Court it is entertaining--and informative--to look at the situation in other states. The Chattanooga paper survey's the situation in its Tennesee/north Georgia area and comes up with some very interesting situations. Some we are familiar with but others hint at battles to come in our state.

AT&T/BellSouth wants state-wide video franchising. The municipalities oppose the state taking and the cable companies don't particularly want what they (rightly IMHO) consider the special interest giveaways the proposed laws involve. That's pretty familiar to us here in Louisiana.

Municipal utilities want to offer services outside their footprint and are going to the legislature to secure the rights. Cable companies don't like it. The phone company is not commenting. Probably because it is already using the "we just want competition" meme for video franchising and even state legislators would not miss the hypocrisy if they opposed municipal competition. (Bet that their lobbyists are working hard against it in the background.) Louisiana hasn't seen a similar issue. There isn't any impediment in state law to offering service anywhere, I believe. --But should Lafayette's system start-a-building soon we'd better watch the lawmakers.

The issue arises in part because Eastern Tennessee has the rich legacy of Tenneessee Valley Authority (TVA) local electrical utilities that could play the role there that LUS plays in Lafayette. That history makes the utilities common and firmly committed to public ownership and low prices. The local communities rightly regard them as treasures and would surely support any moves against the cable or telephone companies their trusted local folks would make. So the incumbents, there as here, want to keep the small local guys out. Here's a TVA utility in Appalacian north Georgia that embodies what the incumbents fear:

Dalton Utilities was among the early pioneers of adding telecommunications services to its water, sewer and power services. The city-owned utility in Dalton, Ga., invested $30 million to launch in 2003 its OptiLink family of services, which includes cable television, telephone, broadband and high-speed Internet.

"Our initial business plan was to obtain a 30 percent market share and turn a profit over a five- to eight-year period," said Lori McDaniel, a spokeswoman for Dalton Utilities. "The acceptance of our services was overwhelming, and we now have a 60 percent market share in the city of Dalton with both residential and business customers, resulting in OptiLink achieving a positive cash flow earlier this year, at least two years earlier than projected."

It's working in Dalton. It will work in Tennessee. And it will work here.

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