Louisiana OK's Curbs On Overbuilds


Legislators in Louisiana have approved a measure to regulate municipal overbuilds that includes some of the cross-subsidy protection commercial competitors wanted, as well as some “workable procedures” sought by the utilities.

“We're certainly pleased the legislature ultimately agreed that the process needed some structure,” said Cheryl McCormick, CEO of the Louisiana Cable Television Association.


The bill guarantees a public process in which a municipal overbuilder must hire an independent feasibility consultant whose findings must be open for examination.

An overbuilder would have to establish a single enterprise fund to pay for a telecommunications buildout.

But the municipality could borrow against other utility revenues.

Borrowed money must be repaid with interest, and all direct and indirect business costs would be included in consumer charges.


Attorney Jim Baller of the Baller Herbst Group, which advises overbuilders, said the measure also assures municipal operators can bundle and offer discount pricing, as their commercial competitors do. It also lets municipal operators withhold “sensitive marketing information” from commercial rivals.

Gov. Kathleen Blanco is expected to sign the bill, possibly in time to influence existing plans for municipal overbuilds, such as one in Lafayette opposed by Cox Communications Inc.