Wednesday, August 15, 2012

Official: LUS Fiber taking off

Yesterday's budget hearing focused on LUS and LUS Fiber was notable for the lack of acrimony and sniping at the young telecom utility. Most of the government-bashing that took place focused on the costs federal regulations impose on the electrical and sewerage units of the utility. Apparently even the most ideological of locals have decided that it is much safer to attack the traditional targets at the national level than to take on the popular, voter-backed local utility. 

Richard Burgess' story is a clean, straight-forward recitation of the history of the telecommunications utility and an update on its current economic status and possible benefits that can be extracted for the community. From the article:
The city’s fiber-optic telecommunications division might be profitable enough by the 2014-2015 budget year to begin paying into the city’s general fund to support other city services, City-Parish Chief Financial Officer Lorrie Toups said Tuesday. 
“I think the business is growing fast. It is looking successful,” Toups told City-Parish Council members during a hearing on next year’s proposed budget for LUS Fiber, the city-owned Internet, telephone and television service.
As LUS Fiber loses its novelty status and assumes the status of a fixture the most interesting characteristic is becoming its potential to supply income to city-parish. Or, more exactly, to the city of Lafayette. Make no mistake, LUS and LUS Fiber's income-producing qualities are what the politicians controlling the utility are now finding most attractive. (LUS currently provides 27% of the city's general fund! Imagine, for a moment, the reaction among the ideologues if taxes had to be raised 27% to fill the hole left by the (socialist) utility company. You'd think they'd be a little less negative and maybe even appreciative about LUS if they were actually, rather than merely ideologically, averse to raising taxes.)

Also: I see that the Advertiser has a story up that (again) takes a very different view of the council's activity than is seen in the Advocate. It's tale: "Clean air rules cost LUS millions." This is, again, a report shaped by Theriot's doggedly right-wing ideological take on all things. Several times during presentation Theriot tried to bring the discussion around to how much conforming to federal regulations is going to cost LUS' utilities. This is a perfect thing to get all hot and bothered about: it is an actual expense that you can do nothing about but getting people worked up about unfunded mandates neatly removes the issues of clean air and clean water. Strangely neither Theriot nor the Advertiser seem to notice the huge costs imposed on LUS Fiber by the state's (un)fair competition act even though that was cited repeatedly when this "odd" expense or that was queried by the councilors. Of course Theriot is not likely to want to notice that since a major part of what he wants to call "loses" of the community's fiber network are the "loans" from the parent utility which return to LUS Fiber the fake imputed taxes which were imposed by the (un)Fair Competition Act.

Lagniappe: From an earlier post in regards to imputed taxes:
Again it all goes back to the (un)Fair Competion Act. One of the things put in that act during negotiations is a concession that LUS Fiber would be able to borrow from LUS' other utilities just like any other corporation could set up internal borrowing arrangements. This is not a subsidy, it's a loan—with real interest. One of the efforts to raise an issue by Messrs Patin and Theriot centered around "imputed" taxes. Those are extra costs that Cox and ATT got the state to require that LUS include in order to force LUS to raise their price to customers (you!) above the actual cost. (Yes, really. See this. And these.) The idea was that LUS should have to pretend to pay taxes that it doesn't actually pay when setting its pricing—and include those fake costs when competing against Cox or ATT. PSC regulations (not the law) requires LUS Fiber to send those monies to the larger LUS. So LUS utilities is holding money LUS Fiber earned. LUS electricty, water, and sewer loans it back to LUS Fiber—at interest. The net effect of this is to subsidize LUS' other utilities on the back of the new utility, LUS Fiber.

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