Following a mid-July vote by citizens to approve the project, the battle over Lafayette’s planned municipal broadband network continues at the state PSC. According to The Daily Advisor:
Lafayette Utilities System and BellSouth appear to be headed for a showdown Sept. 1 over proposed Louisiana Public Service Commission rules that could affect the fiber-to-the-home project that voters approved July 16.
As written, the proposed rules would prohibit LUS from using the assets of its electric, water and sewer divisions to guarantee the fiber debt. LUS also would be required to pay in lieu of taxes to Lafayette Consolidated Government and would be forced to allow other telecom companies to insert promotional material in its billing mailouts.
With regard to LUS pledging the resources of its other utility divisions in securing bonds for the telecom division, LUS said BellSouth wants a restriction prohibiting creditors, upon default, from having access to the assets of other LUS divisions, a provision directly conflicting state law. BellSouth said its recommendations are consistent with the Fair Competition Act’s prohibition against cross-subsidization.
In the matter of the in lieu of taxes, LUS argued that if it pays LCG in lieu of taxes as a substitute for payments private companies make, LUS is entitled to credit against imputed taxes. BellSouth argued that the proposed rules requiring LUS to pay in lieu of taxes prevents LUS from cross-subsidizing the telecom services with imputed tax revenue collected from its customers.
The proposed rules, which took months to compose, were ordered by the state Legislature in 2004 when it adopted the Fair Competition Act or Act 736 to ensure municipalities like LUS do not have an unfair advantage over private telecommunications companies.
LUS Director Terry Huval has indicated that the PSC staff exceeded the limits of Act 736 with some of its recommendations. BellSouth argues that the PSC proposals are within the commission’s authority and that some recommendations do not go far enough to ensure a fair playing field for private providers.
Mitch Shapiro at 11:50 PM|Comments(0)
Blogs We Read
