Becker Pleads With City Council Not to Trust Bach's Financials
The following was read (a few edits have been made) by Brian Becker at the City Council Meeting on 7/19/2010:
My name is Brian Becker and I own and operate Poplar Bluff Internet, dba semo.net, at 1877 N Westwood Blvd.
This afternoon at the Municipal Utilities Advisory Board it was voted by the members to recommend to you this evening to end Open Access. This is all predicated on the false assumption that Open Access is costing the City money.
For the document Mr. Bach showed how rates were calculated, see City Council Votes To End Open Access and Kick semo.net, TCMax & Big River off the Cable Plant
The actual facts do NOT support that assumption. The numbers in front of you, however, will.
Losing Open Access will be terrible for my company, of course. But it will also be terrible for the citizens of Poplar Bluff and turn MyCityCable into a monopoly.
Even today, Mr. Bagby said he wished that today’s meeting could be held without me present because it isn’t fair for me to be involved in the discussions or to see the City Cable’s financials. I feel that type of mentality is very dangerous for our city.
I’m asking you to reject this proposal because there is NO proof that Open Access is costing the City money. Open Access is GOOD for this city. It is good for competition. It is good for me and my customers. It is good for our citizens.
In addition to ending Open Access, you are being presented tonight with a set of financial numbers that have no factual support. Those numbers are not the result of an accountant or business consultant. They have been crafted by Mr. Bach, to prove Mr. Bach’s point.
The numbers you have before you disregard that the city built a cable plant and after that plant was complete, [the city] decided to enhance the network with Internet capability. Totally disregarding history, the proposed $5.5m internet plant cost is fictitious.
In addition to rewriting history, according to the MU Advisory Board and Bill Bach, the ISPs should pay to rebuild the network EVERY month. Bach’s proposed numbers take a one-time capital cost and charges it to each ISP every month. His capital costs are never divided out over 12, 24 or 36 months, he charges for them EVERY MONTH. Anyone with any degree of sanity can look at this and see this is wrong on every level.
On top of that, the $2.5m of Operations and Maintenance Expense is a totally manufactured number as well. These numbers so distorts reality and place much of the daily costs of running City Cable onto the back of “Internet Costs” – including Amortization, Depreciation and Bond Payback…which should not be included in these numbers since Mr. Bach already including calculations for $5.5 million in Capital Expense. You can’t charge us for the capital and then charge us for the deprecation of that capital [added remainder of paragragh] and then the loan payback of that capital! That is paying for the same thing three times! Mr. Bach has invented “Triple Dipping”!
I would like to acknowledge and thank Tucker Davis, the Chairman of Municipal Utilities Advisory Board, who was the only sane voice during today’s Advisory Board meeting and the sole descent vote on BOTH of the items before you today.
After the Advisory Board meeting I sat down with a prominent, local Certified Public Accountant and showed him Mr. Bach’s numbers and he confirmed that Mr. Bach has not used any known accounting principles in his calculations.
I plead with this City Council to disregard the advice of the Municipal Utilities Advisory Board.
Find an expert, without a motive
Find an expert who knows accounting & business principles
Find an expert who won’t present numbers created to make his point
I’d be happy to be a part of any task force this council would approve to delve into the costs and benefits of Open Access for the citizens of Poplar Bluff.
you could have crappy windstream dsl they acknowledge.our speeds are slow but no upgrade for our area.. . they will offer Satellite which is no better . we need more isp in here
This is why the USA isn’t even in the top 20 countries in regards to internet speed. I’m glad I have Windstream DSL. 6MB for $45 sounds a lot better than these prices. I like Scott’s deal a lot better though, not sure what I would do with 50MB. I don’t how the USA average is around 7MB, I guess the big city speeds outrank the small town suppression.
I still confused as to why you can’t get DSL in PB city, is that true?
The city didn’t let it happen, they made it happen. It is just a good old boy town doing business to benefit a few
SEMO net pricing is WAY overpriced. In Illinois, we pay $44.95 for 50 MB/s–what they call high speed Internet. Somebody needs to bring the city up to “speed” and stop ripping off customers.
Charging people $44.95 a month for 2 MB/s second is Internet highway robbery and I don’t see how anybody could support a company that is ripping people off.
Scott,
We totally agree that the prices and speeds in PB are too high and have fought to bring the prices down and press the city to provide faster options. It was at our request that the city finally allowed 2Mb & 3Mb service a number of years ago. Every request we’ve made for 6Mb, 12Mb and faster service with City Cable have been denied.
If you go back and read my initial post on June 8th, what appears to have started this entire issue was semo.net offering (and advertising) 1Mb service at the same price at $29.95. The same price as MyCityCable offers 256k service (or 0.25Mb service).
In February, our “Price Per Megabit” to the Internet (our connection from Poplar Bluff out to the world) went from $175/Mb down to $57/Mb and we decided to pass that savings along to our customers.
Our first step was to begin dropping our “New Customer Rates” by $15/month and eliminating our 256k and 512k offering. (March 2010)
Our next step was to lower Business Pricing for our current and new customers by as much as $150/month for the 3Mb service. (June 2010)
Our final step was to move all of our 256k & 512k customers to 1Mb and reduce their charge to $29.95. (not implemented because of the City’s actions back in May)
My company has been proud to support the City’s investment of a cable network. As I’ve said before, we’ve paid the city $1,100,000 to use this network since 2002. Yes, there was more room to reduce prices and we will continue to press in that direction.
Below are the rate pages for each of the ISPs on the cable network:
MyCityCable TCMax BRTelephone semo.net
quote ((Whats happened to the Bill of Rights?))) same thing as the ariz immigration law big government–if the city cuts semo out they can have crappy service &higher prices ! another good reason not live in city limits
Move out of the city. The city already forces people to use their service and hold garbage collection over there head to insure they get there money. Why not make people use there internet, they can charge more than anyone else and there is nothing anyone can do about it except move.
Whats happened to the Bill of Rights?
I agree with you Brian. I think it is horrible how the city let’s this happen. That’s one reason we moved outside the city. There is no choice about anything from cable to Internet in town now. I think it’s time to vote in new people who are worried about the people and not how much they can pocket.
Sad that competing businesses can be so blindly railroaded….makes you wonder who is being slipped a little bribe under the table.
When I first read the numbers, I thought: “No, it couldn’t be.”
Second pass, the numbers “developed” are totally unhinged from how one runs a business.
Someone needs to develop a narrative and financials that reflect the entire system and trending. The analysis needs to look at costs and revenues, and indicate *some* approach to capital and expense recovery.
A chart of costs needs footnotes and probably a sketch or two to inform the policy makers and the public.
And that person should be far removed from the local intrigue. A decent CPA with a couple of phone calls could handle this – it’s not that big a problem, but boy it is really presented in a confused fashion from the exhibit I saw here.
This smells to high heaven. Municipal systems can be highly efficient (contrary to AT&T’s complaint above) but they need to be managed with vigor and transparency. Open access is vital to the next generation of goods and services – including entertainment.
To dismiss your emerging competitive community it in a hastily drafted (apparently deeply flawed) “analysis” is a disservice to your community.
Good luck, Brian
Mike Glodo has been a member of the Illinois Broadband Deployment Council and writes on topics of local food, sustainable market economics, and rural broadband. He’s a former technology executive from Equitable Life, Merrill Lynch, and Bell Communications Research (Bellcore).
Very disappointing. Where does this go now? Can our contacting the council members help or is it a done deal?
Yes, Heather, contacting your city council member would be a very good thing. You can find their contact information online at http://poplarbluff-mo.gov and clicking on City Administration. I’ve included it below for convenience (copied from their page to here):
I agree, very well said. My thoughts and prayers are with you.
To uphold the principals of a free society and to preserve a free market, citizens are obligated celebrate the individual entrepreneur and enunciate the principals of America by fighting any local government monopoly that demands unfair dominance and coercive control. Poplar Bluff’s city government monopoly defined:
“In economics, a monopoly (from Greek monos / μονος (alone or single) + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.”
Vote the bums out, power to the people.
an AT&T employee told me this is the reason we don not have dsl because the city is blocking them. because att can provided lower cost internet and lower cost tv to the people of poplar bluff but the city protects their jobs instead of protecting the citizens who pay them.
Well said, Brian. We’re behind you 100%.