broadbanderexpanderc
@66.100.x.x
| reply to mjcrocket
Re: Very good news
Wow. Yes, this is of dubious legality then. I wonder what he PSC will find. Perhaps there is some legal leephole that has to do with a bond finance limitation for the project. As it stands, something seems wrong. Either the Utility will have to raise prices to cross-subsidize illegally or they have enough money to build a surplus and keep rates the same, which is absurd for a public power company. Interesting to see how this pans out and where this money comes from. |
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mjcrocket
Mjc
join:2000-12-02
Abingdon, MD
| reply to broadbanderexpanderc
said by broadbanderexpanderc:
Cross-subsidization is illegal for public entities in La, like in most states. I don't know where your information comes from on the matter, I suggest you read the John Kelly paper on the matter and the Rizzuto and Wirth paper he wrote his piece as a reply to.
I got the information from the proposition itself:
»68.156.56.19/Images/Fiber.htm
"said bonds to be payable first, from the net income and revenues of the communications system and second, to the amount necessary, from a secondary or subordinate pledge of the revenues of the utilities system."
It might be illegal in LA; but the proposition the people voted on clearly states that is exactly how the bonds will be paid if the fiber system does not generate enough revenue to make payments. If it is illegal and the above wording is challenged, then the results of the vote are illegal and the project is dead in its current form.
Further, the above article contains the following quote from LUS Director Terry Huval:
"If LUS starts building out the fiber network and no one buys services, the debt will be about $3 million, which LUS’ other divisions can absorb"
An article in today's newspaper, (The Advertiser) contains the following information related to this matter:
»www.theadvertiser.com/apps/pbcs.···318/1002
"LUS representatives said they believe state law allows the system to use its existing electric, water and sewer utilities as a second guarantor for the fiber project. BellSouth representatives disagree.
If it is prohibited from backing the fiber bonds with its other divisions, LUS may not be able to sell the fiber bonds or may have to sell them at higher rates than planned."
The same article also contains the following summary of the project:
"Bonds to be paid back, first using revenues from the fiber system, then if needed with revenues from other LUS divisions, such as electric, water and sewer.
Bond money goes to other LUS divisions if the fiber project is unsuccessful."
Along with the following summary of what is next:
"What's next:
Louisiana Public Service Commission is writing rules that may affect fiber rates and whether LUS can guarantee bonds with other utility divisions.
PSC meets Friday in Mandeville. LUS is not on the agenda posted on PSC's Web site."
It looks to me like the proposition voted on Saturday has a long road to travel to determine if the vote was legal and in turn if the project is legal or has a chance of being constructed. |
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broadbanderexpanderc
@66.100.x.x
| reply to pnh102
Cross-subsidization is illegal for public entities in La, like in most states. I don't know where your information comes from on the matter, I suggest you read the John Kelly paper on the matter and the Rizzuto and Wirth paper he wrote his piece as a reply to. |
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pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD
 ·Comcast
| reply to mjcrocket
said by mjcrocket  :In the event that the revenue from this project is not sufficient to make payments, the city's entire utility system will be responsible for the payments; the proposal that was voted on clearly stated this. This is yet another reason why municipal broadband sucks. If a private network were to fail, the only people who would be screwed would be the investors who voluntarily chose to take the risk. If this network fails, all of the people who didn't vote for the network would now be paying higher utility bills to cover the costs of the failure. This is no different than raising taxes to pay for the system and it most certainly isn't fair to those people who aren't interested in the network.
Seeing as how just about every single municipal broadband system in the USA is subsidized by either taxes or by some other municipally-run utility, no one can make the argument that these systems are in any way better or more cost-effective than a privately run system. It's just that more people get screwed over when the government drops the ball.
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Hey Fast Eddie... you're next! |
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