Wednesday, July 28, 2010

"Judge asked to toss LUS Fiber suit" [updated]

¿¿ "Judge asked to toss LUS Fiber suit" ??

Uh, no—The suit in question is the National Cable Television Cooperative's (NCTC) suit. Lafayette Consolidated Government has filed papers further supporting its contention that the NCTC's lawsuit is merely designed to block an ongoing FCC inquiry into the matter.

So if the headline isn't actually the news in this story then what is?

Well it is a little hard to tell from the Advertiser story. Especially since important bits that might make it all make sense are missing.

The real timeline involved goes something like this: LUS and two other cities with new FTTH networks who have submitted applications for membership after years of being ignored and then enduring a "moratorium" on new members started proceedings at the FCC asking the FCC to exercise its obligation under the Communications Act to block anticompetitive practices. The FCC requires that complaints be preceded by filings of intent at the FCC and fully informing the interested parties. LUS and its sister cities did so. (This is not fairly characterized as a "threat.") The FCC's hope in requiring this is pretty clearly that the two parties will get together and work it out without burdening their docket with the case. Indeed, the two other cities were admitted...and only Lafayette was refused. Why? Well the NCTC simply hasn't said. But the fact (unreported in this story) is that Cox Communications is the largest member (this is recent—they joined after the successful referendum battle in Lafayette and the "moratorium") and has a seat on the board of directors. The two other cities don't compete against Cox or any other NCTC member. (This is not established policy, other places have more than one competitor in the NCTC.) If the point of the NCTC refusing only LUS membership is to stifle competition on behalf its most powerful member—well...on the face of it that would make their action anti-competitive and the FCC would be obligated to act.

Sooo, armed with a more complete picture can we now discern what the real news is?

Why yes, it is contained in the final, trailing paragraphs:
Included in Lafayette's latest filings is a letter from an FCC official, supporting Lafayette's position.

"We are extremely gratified that the Federal Communications Commission has taken the extraordinary step of writing a letter for submission to the federal judge in order to indicate that the agency is in full agreement with Lafayette's position that the FCC should have primary jurisdiction over resolution of the issues under the Communication Act," City-Parish Attorney Pat Ottinger said in a statement.
Lafayette has garnered the support of the FCC, which is agreeing that the matter falls into its domain. This is a big deal and Ottinger is right to be "extremely gratified."The court will surely understand that if it allows the lawsuit to proceed it will be in danger of federal preemption—that the FCC will simply exert its right under the Communications Act to rule on such issues and take it out of state courts.

That, actually, is news. And it is good news for Lafayette and LUS

7/28/10, 2:12 pm: I'm Wrong: It has just been pointed out that federal preemption can't be at stake here because the case is in federal court. That was careless. Thank goodness there was a knowledgeable reporter around to gently set me straight.

It's still good to have the FCC asserting its authority and that will help sway the court to defer to administrative authority but it is not nearly as effective in a federal court as the implied threat of preemption would be in a state one.

2 comments:

B Faul said...

You mean Cox joined the co-op after the fiber battle? Grrrrr. Why has this not been carefully reported in the local papers? It makes Cox's intentions so much clearer and more obvious.

John said...

Brent,

Yes Cox joined after the fiber fight in 05. The NCTC instituted its first moratorium in 2005. Cox first ran up against small, fiber-based Louisiana competitor whose competition was aided by the NCTC lineup in 2005 as well when EATEL in Gonzales launched its triple-play package.

Cox and Charter, two of america's largest cable MSOs joined the NCTC shortly after the (extended) moratorium was ended on Jan. 1 2009.

It's hard not to think that Cox's experience in Louisiana didn't inform its decision to join the NCTC and would motive them to block competitors from joining.

Part of what is interesting here is that the speculation at the time of the moratorium was that it was over the desire of the current membership to restrict rural telcos from membership. EATel is a rural telco...so the Louisiana situation may have made for a confluence of interest between Cox and the NCTC based on a joint desire to deny rural Telcos the benefits of NCTC-based membership.

Interestingly murky stuff. But none of it makes it look any less likely that Cox and the NCTC are colluding in a blatantly anti-competitive move.


On lifting the moratorium
http://connectedplanetonline.com/fttp/news/nctc-membership-moratorium-lifted-0905/

On Eatel: http://connectedplanetonline.com/mag/telecom_incumbent_telco_oneups/