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Small Town’s Telecom Drama Continues: Municipal Utility Sues Cable Group For Discriminatory Access To Programming

in Broadband TV/FCC/Media Ownership/Rural Utilities Service by

NEW YORK, June 10, 2010 - A long-running feud between a municipal utility in Lafayette, La. and Cox Communications appears to have revived itself Wednesday when LUS Fiber filed a lawsuit against the National Cable Television Cooperative. LUS Fiber charges that the cable group is unfairly denying it membership, thus depriving the Lafayette utility from millions of dollars in savings when buying television programming.

The dispute's worth tracking because LUS Fiber is one of a growing number of municipalities around the country that has built a publicly-financed fiber-to-the-home network, the economics of which are still unproven. The project is being watched closely by others in the telecom industry across the country: An executive from Google's gigabit-per-second fiber-to-the-home project  in April made her only conference trip of the year to visit and inspect LUS Fiber's 100 megabit-per-second fiber-to-the-home  roll-out.

This dispute is one of a long-string of others in a long-running legal tug-of-war across the country with commercial providers trying to block such developments, calling them unfair competition. Municipalities such as Lafayette, for their part, say that commercial providers aren't providing a robust enough of a service that their businesses and residents need.

For its part, LUS Fiber has filed a complaint against NCTC and its board of directors with the Federal Communications Commission. Cox Communications is a LUS Fiber competitor and has in the past tried vigorously to prevent the utility from building its own fiber-to-the-home network. A member of the company is on the NCTC's board of directors.

In filing its complaint, LUS Fiber says that access to reasonably-priced television programming is an essential component to the process of rolling out broadband to its rural customer base.

"Without membership in NCTC, LUS will pay millions of dollars more each year for access to essential video programming than it would have to pay if it had access to the huge price discounts and other benefits of NCTC," reads the complaint filed by LUS Fiber's lawyer Jim Baller of the law firm of The Baller Herbst Law Group of Washington, DC.

LUS Fiber charges that NCTC is violating section 628 of the Communications Act, which addresses the issue of the availability of television programming and making it unavailable for anti-competitive reasons.

The municipal utility wants the FCC to act quickly, to state that NCTC and its board of directors violated specific provision of the Communications Act,  to stop the alleged discriminatory treatment, monetary damages, attorneys' fees, and other penalties.

Neither Cox Communications nor NCTC could be reached for comment at the time of this filing.

Sarah Lai Stirland was Contributing Editor for until April 2011. She has covered business, finance and legal affairs, telecommunications and tech policy for 15 years from New York, Washington and San Francisco. She has written for Red Herring, National Journal's Technology Daily, and She's a native of London and Hong Kong, and is currently based in San Francisco.

1 Comment

  1. The economics of muni fiber are unproven? Compared to what? Charter went bankrupt and so did TDS – are the economics of privately owned telcos unproven? The economics are sound and cities have proven they can succeed. Just because telco-funded think tanks harp on a few networks that have struggled doesn’t meant the model is unproven.

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