Friday, March 02, 2012

LUS Fiber Announces Results of State Audit

Huval in a post presentation interview
LUS Fiber held a press conference today at the Pinhook customer service center that reported on the results of the first state audit required by the infamous (un)Fair Competition Act.  The state audit covered the first three years of LUS' operation and is intended to ensure that LUS Fiber is not being subsidized by Lafayette Consolidated Government.

Lafayette is touting the results of the audit as a clean bill of health from the Public Service Commission. The only issues that arose in the audit were ones previously noted in LUS' own yearly audit from 2010 and the PSC staff found no further issues. The two errors from 2010 involved LUS Fiber underpaying rent on the "fiber huts" located at electrical substations and overpaying the larger utility for some of the fiber assets transferred to the new utility. The result of the offsetting errors was that LUS Fiber slightly subsidized the larger utility—something the PSC had no objection to since they are only charged with preventing LUS Fiber from being supported by a "cross-subsidy."  (This is all part of the general thrust of the (un)Fair Act—to raise the price that LUS has to charge and to protect the incumbents from competition.)

Nonetheless the news is not all good. Cox and the cable association are "intervening" as is provided for in the law. Declaring that they want to intervene is not exactly surprising. It's exactly what was anticipated from the time that the PSC held hearings on how it would implement the uncomfortably vague and constitutionally dubious law. What form this "intervention" takes will be up to the PSC; there will likely be hearings but nobody really know as this is the first time the law has ever been applied—after all it's a law that only applies to LUS Fiber. Lafayette says that in view of the fact the PSC finds nothing worth pursuing the intervention is simply to harass, distract, and increase our expense. As Durel says in the press release: 
“We are not sure why Cox and the LCTA have intervened, unless it was to create further mischief, expense and distraction for our local taxpayers” states Joey Durel, City-Parish President. “The LPSC was granted this responsibility in the Local Government Fair Competition Act, which was created at the request of the private telecommunications companies.”
I suspect that they also hope to get deeper into LUS' books in any discovery process. It'd sure be nice if Lafayette had the right to root around in their books...

As to why this annoying but relatively minor event was worth a press conference: LUS' PR person said that since NBC's "Rock Center" newsmagazine was in town doing a story on LUS Fiber this would allow them to get some tape of LUS being harassed. (Didn't say it just like that, but...) Partly, I'm sure it's a well-worn habit: Cox does something obnoxious and Lafayette hits back. 


Lagniappe: Whining, sniveling losers...
An attack on LUS following the state audit has been long anticipated. Almost eagerly anticipated. Back during the PSC hearings over the first iteration of the regulations that govern LUS the incumbents were annoyed that the PSC didn't see things entirely their way and a bit of spite from one of the opposition attorney's generated one of Durel's patented quotable quotes:
 "The biggest disappointment is that BellSouth's attorney said he would see us in court," said City-Parish President Joey Durel, calling the company "a bunch of whining, sniveling losers."
The more things change....

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