Public Vote Set on La. Overbuild

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Cox Communications Inc. and BellSouth Corp. have gotten what they wanted -- a public referendum on whether the utility provider in Lafayette, La., should move into the broadband business.

The city-parish council voted April 19 to hold a July 16 public vote on whether Lafayette Utilities System should build a project dubbed Fiber for the Future. The broadband project would construct a fiber-to-the-home plant to 55,000 residences and 6,000 businesses.

Parish leaders maintained that they had the authority to approve the project, to compete against Cox and BellSouth with a triple-play bundle of phone, cable and high-speed Internet.

Last year, the council gave the utility a go-ahead for the project. In January, the parish gave notice that the project would be funded by $125 million in municipal bonds. Collateral would be physical plant plus ratepayer revenue.

The competitors believe this funding method violates state law. BellSouth sued in January to block the project. Cox and the Louisiana Cable & Telecommunications Association joined that suit.

In February, a judge sided with the commercial providers, forcing the parish’s hand on the election.

Separately, the LCTA has drafted a bill, introduced by state Sen. Sharon Weston Broome (D-Baton Rouge), to require any community that considers becoming a broadband provider to hold an election first and get citizen approval.

Also, if a local government becomes a broadband competitor, obligations borne by the commercial providers in town -- including PEG-access (public, educational and government) channel commitments, institutional networks, system-rebuild demands or other monetary requirements -- would be suspended. That suspension would remain in force until the local government had spent as much on these obligations as the commercial providers have paid during the previous decade of operation.

If the citizens approve the Lafayette Utilities System build, this bill will still impact the project. The bill specified that it will address municipal broadband contracts contemplated dating back to June 30, 2004.

Parish officials have publicly stated that the bill is “another delaying tactic” by the commercial providers, adding that the suspension language amounts to a punishment to the local government for daring to try to compete.

The bill has been assigned to the state Senate Commerce, Consumer Protection and International Affairs Committee. Coincidentally, the representative from Lafayette is that committee’s co-chair.

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