Archives: Internet

BellSouth puts pressure on small town

Lafayette, La., a rural community is trying to installing its own fiber to provide and advanced broadband network which would offer 116,000 resident voice, data and video. BellSouth and Cox Communications Inc., the local cable provider, are trying to prevent it from happening.

According to a USA Today story, “regional Bell companies have made much of their billion-dollar plans to deploy broadband networks across the USA. But they're also quietly trying to erect hurdles that would make it hard for anyone to compete with them -- at least not very cheaply or easily.

Besides municipalities like Lafayette, the Bells are going after their phone rivals, Internet access carriers and major metro areas -- anyone with an interest in building services that might compete with the Bells.

Critics say the Bells' efforts are a direct attack on competition and that consumers could be the big losers.

‘If municipal governments and others are blocked from entering this market, the vast majority of Americans are going to wind up on the wrong side of the digital divide because they will be unable to afford high-speed services,’ says Gene Kimmelman of Consumers Union."

Also, Kimmelman goes on to say, "'consumers are going to end up paying inflated prices for high-speed Internet access, which is becoming essential for day-to-day life in America.'

The future of Internet-based phone service, known as VoIP, is also at risk, he says. In its final path to a home, VoIP travels over high-speed lines — a cable-TV or phone line. If access to that line is blocked, Kimmelman warns, development of the service could stall.

Kimmelman says the situation is now especially urgent, with AT&T and MCI retreating from the residential phone business.

'With AT&T and MCI exiting the consumer market, the only way consumers are going to get real competition is through VoIP,' he says.

The big Bells are taking advantage of that retreat by plowing ahead with their fiber deployments. Their plans vary. Only Verizon vows to extend fiber lines all the way to homes. Its customers could see top speeds of 100 megabits or more."

USA Today Agrees with Consumers Union, Communities should Compete

In a January 11, 2005 editorial USA Today states that “Lafayette, like dozens of other cities unwilling to wait for telecommunications giants such as Bell South to install broadband pipelines, decided to build its own.

That should have been the end of the story. Why shouldn't citizens be able to use their own resources to help themselves? Because BellSouth, like other telecoms, thinks actions like Lafayette's are unfair competition.

The reason, as in other states, has to do with complex legal arrangements made among telecoms, legislatures and regulators. But the core issue is money. BellSouth says it can't compete effectively with cities where taxpayers pay for laying down expensive fiber-optic networks.

Perhaps, but Lafayette is building because BellSouth and the city's cable TV company aren't rushing to meet the city's needs.”

BellSouth Defends Position

In the January 11, 2005 Opposing View column William A. Oliver, the president of Louisiana operations, BellSouth Corp. writes, “In the specific instance of the city of Lafayette, a truer characterization is a publicly owned monopoly pledging the assets of the entire utility system to compete with the private sector, which includes two well-established communications companies along with a host of satellite companies, wireless providers, Internet service providers and competitive local exchange companies.

As anyone who reads the trade media knows, competition between the Bells and cable companies in the broadband-services market is fierce. In Lafayette, 91% of BellSouth's customer lines are equipped with high-speed, Internet-access service. Cox Communications also serves Lafayette with cable modem service. In fact, both firms provide competitive telephone, Internet access and video services to that community and are continually investing in their networks.

City officials have publicly stated that they intend to borrow in excess of $100 million over 25 years to build a fiber-to-the-home network to provide a "triple play" of services using as collateral the monopoly electric utility, which is owned by the citizens of Lafayette. City officials say they do not intend to seek the approval of those citizen owners.

It has never been BellSouth's intention to derail this project. However, BellSouth believes that competition should be fair and that a level playing field should be established. That is why BellSouth, Cox and others worked with the Lafayette Utility System (LUS) to develop the Fair Competition Act.

While this legislation allows LUS and others to build their own networks, it ensures that they cannot unfairly cross-subsidize their new ventures with monopoly electric revenues and taxpayer dollars. Furthermore, the legislation gave the responsibility of developing appropriate cost-allocation and accounting rules — to ensure anti-competitive practices do not occur — to the Louisiana Public Service Commission, which is in the process of developing those rules.

The bottom line is this: BellSouth is not trying to thwart competition; we simply want to ensure that competition is fair and that the playing field is not tipped in favor of any competitor — including a government-owned network.”

Where to Go From Here?

USA Today fished their editorial declaring “Louisiana regulators are busy reviewing the case. But for Lafayette to lose, there are a couple of things the regulators will have to ignore: fairness and common sense.”

Many communities around the country are battling for community high-speed internet access.  If your community is currently working for high-speed internet and you have had successes or challenges consider sharing your story with us.