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Local govts make last desperate effort to milk consumers

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.

This basic principle explains why the Louisiana Municipal Association and the Police Jury Association of Louisiana are suing to try to prevent changes in how cable provision is achieved in the state. The new law allows any operator to acquire a statewide cable franchise valid anywhere in the state, while apportioning out monies received from the franchisee to continue to go to the local area at the same 5 percent maximum rate of the deal.

What’s to object about this: local governments still can get the same maximum of the revenue? And current providers, almost all cable companies, don’t have any real objection to the deal. What’s got the local governments upset is that they no longer will be able to restrict entry into their marketplaces and use that leverage to pass through stealth fees to consumers.

The past law did not mandate local governments in awarding a franchise to accept offers as good or even better than what an existing franchisee had. Further, by deliberately limiting competition, it could set things up so the sole franchiser could claim certain costs that then could be levied on behalf of the government and shoot these right into its coffers, shaped around market-interfering requirements imposed. Now these governments have no leverage to force these things out of a single franchisee and consumers and cannot block competition that will cause sweetheart revenue pass-throughs courtesy of a monopoly provider to disappear.

It’s not about contractual fidelity as these organizations claim. It’s really all about an obscured means for local governments to milk money out of its citizenry that uses these services. Hopefully the judiciary will see through this and/or decide, since the state ultimately controls all actions of local governments, that shifting contracts to the state level is consistent with the jurisprudence defining state and local government relations. For which consumers in Louisiana would be grateful.

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