mjcrocket
Mjc
join:2000-12-02
Abingdon, MD
| Re: Very good news 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. |
