Friday, September 18, 2009

The Administration Strikes Back, Defends Not Collecting $10 Million In Rights of Way Fees from Telecoms

Yesterday the Ballard administration struck back with a defense of its plan to eliminate the staffing of the TVSA, including the executive director, in a claim that they are just providing duplicative services that are no longer needed. In a memo, apparently circulated by head of the Office of Corporation Counsel, Chris Cotterill, six "myths" about the TVSA are listed. While the supposed myths about the TVSA are easily addressed, what I found most remarkable was No. 6 on the list:
Myth 6: Agency pursuing right-of-way fees on par with video provider revenues for private use of public assets. Pursuant to State law, City would likely receive more than $10 million a year if enforced.

Fact: This idea has been considered by the current and previous administration and has been soundly rejected. In effect, TVSA proposes to institute a tax on companies that will pass that cost on to consumers. We need not pay $157, 000 for ideas rejected year after year.
This is in law what one would call an "admission." The City admits that is is intentionally foregoing $10 million in fees that the city could be collecting from telecoms for use of the public rights of way. There is an additional admission as well. In the last line, the administration effectively admits that the TVSA is being targeted not because of duplication of services, but because the Executive Director, Rick Maultra, continues to press for the City year after year to collect these rights of way fees from companies like AT&T, who Joe Loftus, administration insider, represents.

It certainly is interesting that the administration would suggest that private companies should be able to use the public rights of way without paying the public like they do in other cities. What is further interesting is that this administration, which has no problem rushing to increase taxes to pay for yet more giveaways to billionaire sports owners, claims now to be defending the lowly consumers.

If these telecoms could simply pass along all the rights of way fees to the consumer, why would AT&T representatives feel the need to make calls to councilors to try to persuade them to eliminate Maultra's office? If what the administration claims, that the telecoms could just pass through the 100% cost of the rights of way to consumers, those telecoms would simply not care what happens. But it is apparent that they, including AT&T, care quite a deal whether they have to pay these rights of way fees.

The claim of the 100% pass through of business expenses is in itself a myth and is contradicted by the administration's own suggestions regarding how the city can raise money. Recently suggestions have been made that the administration may sell off the naming rights to public assets in an effort to raise revenue from private companies. By the administration's logic employed in the telecom debate, those companies would just pass along the cost of the naming rights to consumers. But the administration officials do not make that argument with respect to naming rights, probably because they know it is false.

Any way you slice it, this debate would not be going on at all were it not for the fact that Joe Loftus, who is special counsel to the Mayor and lobbyist for the City, also represents AT&T, which is adamant it does not want to pay the rights of way fees that Maultra wants them to pay. Loftus has clearly used his clout behind the scenes, and enlisted OCC's Chris Cotterill, in a highly conflicted and quite likely unethical effort to use the budget process to try to eliminate the person who continues to insist that AT&T pay the public if it is going to use public assets.

One would hope that Mayor Greg Ballard himself would step in and pull a plug on insiders within using their positions within the administration to aid a private client. In an administration supposedly committed to improved ethics over those exhibited during the Peterson administration, these conflicts of interest have no place.

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