In late June of this year, Louisiana Governor Bobby Jindal signed into law SB 807, now Act 433 and also known by the Orwellian moniker, “The Consumer Choice for Television Act.” The bill was introduced by State Senator Ann Duplessis and was touted as a way of increasing competition and choice among cable companies in Louisiana; this, ostensibly, will benefit the consumer.
It’s unclear how, exactly, this Act will increase competition and choice, but we do know one thing: It had the strong support and backing of big telecommunications companies like AT&T and their related lobbyists and PACs, and its passage here in Louisiana is a feat they had already accomplished in 19 other states.
Essentially, this Act is a piece of deregulation legislation; it strips municipal and parish governments from negotiating their own cable franchise agreements and places the authority in the hands of the Secretary of State– who, from the looks of it, will only serve to rubber-stamp applications.
There are some real legal and Constitutional problems with the Act, which is why the Louisiana Municipal Association along with the State Police Jury Association, among others, are mounting a challenge.
One of the principal problems with the Act is its conflicts with municipalities who are governed by a Home Rule Charter. The Act specifically exempted municipalities whose Charter was enacted prior to 1974 (i.e. New Orleans and Baton Rouge), yet it makes no mention of how it will address municipalities who passed their Charters after 1974. Interestingly, the exemption of New Orleans (home of the State Senator who introduced the bill) and Baton Rouge undercuts one of the principle arguments supporting the bill– that it will “streamline” the application process and place all negotiations in the hands of the State. Baton Rouge and New Orleans account for between 15% – 20% of the State’s population. Quoting from the Act:
With respect to local governmental subdivisions which have home rule charters adopted after the Constitution of Louisiana was adopted on April 20, 1974, and which are governed by Article VI, Section 5 of the Constitution of Louisiana and with respect to other local governmental subdivisions without home rule charters, such local governmental subdivisions are denied the authority to adopt ordinances that are inconsistent with the provisions of this Chapter.
Why April 20, 1974? Because that’s the day that the “new” Louisiana Constitution ratified into law, and among other things, the Constitution provides (paraphrasing):
The 1974 constitution granted broad home rule authority to parishes and municipalities and reversed the traditional concept of local government as a “creature of the state” possessing only delegated authority.
New Orleans’s charter was passed in 1952; Baton Rouge’s was passed in 1947. Sure, it’s a technicality, but it’s an important one.
To be sure, I am not a lawyer, but on the face of it, I am not sure how this Act could supersede the authority given to Home Rule Charter municipalities based on whether or not their Charters were passed prior to the ratification of the State Constitution.
Regardless, this Act doesn’t appear to be truly concerned with increasing competition; it appears to be nothing more than a way to allow telecommunications companies to avoid negotiating their agreements with the very communities they serve.
Video Franchising: Louisiana legislators, under pressure from major service providers, enacted SB 807, a statewide video franchising bill. Telecommunication service providers argue that these franchises, which create a single statewide simplified process of offering cable services, could have benefits for the public, such as slightly increasing competition. The Louisiana legislation, however, failed to include certain consumer protections and community benefits, such as support for Public Educational and Government (PEG) stations, protection of municipal control and the assurance of required build-out to underserved and un-served areas, and is therefore not in the public interest.
Among the worst provisions:
- Build-out requirements are completely prohibited: A key component of why service providers favor statewide franchises is they provide them the ability to selectively deploy new network technology. Under Senate Bill 807, there is no community-wide build out obligation.
- Reduction of municipal control and ability to negotiate for community benefits.
- No substantial PEG protections.
Some, such as Jeffrey Sadow, have attempted to argue that opposition to this Act is merely the result of cynical, money-grubbing municipalities who want to “milk consumers,” which, in my personal opinion, completely and totally misses the point. Ironically, Sadow begins his argument by cautioning people to follow the money:
One reliable way to find out political motives – especially when somebody is claiming they are doing something for reasons other than this – is to follow the money. And when money is involved, you can be sure the citizenry is getting the short end of a deal.
It is ironic because this Act was one of the most heavily-lobbied pieces of legislation in the previous session, and if you were to take Sadow’s suggestion seriously, you’d find that hundreds of thousands if not millions of dollars have been expended by telecommunication companies and their related advocacy groups, not by local governments.
The opposition has nothing to do with municipalities wanting more money; it has everything to do with them wanting to ensure that cable companies– companies that rely on local infrastructure (like telephone polls) and depend on local support– are held accountable to the unique needs and demands of the communities they serve.
Ultimately, municipal leaders– just like State leaders– understand that telecoms typically pass down increased costs back to the consumer, and ultimately, municipal leaders recognize that their communities need cable companies as much as those companies need those communities.
For extensive coverage of these issues, check out the Lafayette Pro Fiber blog.