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RECAP: A Missouri Statute which has already been tested in the U.S. Supreme Court requires the City to sell telecommunications services “at cost” to other telecommunications companies like semo.net or Big River Telephone. But the new City Ordinance has a column labeled “cost to serve” and “New Rate” which clearly shows over $3,000 dollars profit per month has been built into the new rates.

LETTER SENT TO MAYOR EDINGTON:
September 13, 2010

Mayor Edington,

After visiting with our lawyers, we would like to call the attention of City officials to how the new City Ordinance 7208, and the original Ordinance 7194, is in violation of Missouri Revised Statute 392.410 paragraph 7. We urge the city to strike down these ordinances before September 15th to prevent the new rates from going into effect and keep the city from violating Missouri law.

The statute, upheld by the Supreme Court of the United States in Attorney General Jay Nixon (State of Missouri) vs Missouri Municipal League, restricts City Cable from profiting and confines them to “sell at cost” any telecommunications services and facilities to other telecommunications providers.

Chapter 392.180 defines “telecommunications service” to encapsulate what is being provided to the Open Access Providers.

In both city ordinances, the attached Exhibit A has a column that states “Cost To Serve” and clearly establishes that City Cable will be profiting from the selling of telecommunications services and facilities to telecommunications providers.

Chapter 392.190 defines all three Open Access Providers as telecommunications companies. Each Open Access Provider purchases telecommunications service and facilities (access to the Customer and dark fiber from cable plant to ISP office).

Therefore, City Cable cannot profit from the charges and must sell these services at cost even when billing by Megabit.

For clarity, City Cable does not provide the Open Access Providers an “Internet-Type Service.” The Internet-type service is clearly provided by the Open Access Provider not the City Cable network.

What is being purchased from City Cable is an Ethernet connection to the customers modem which includes NO Internet service as well as a dark fiber pair from the city plant to the Providers plant. All three of these are within Missouri and qualify as a telecommunications service, not an Internet-type service.

Attached are the portions of the applicable statutes in this letter for your review.

Please also consider that since Missouri law requires “at cost” pricing, the city could use this opportunity to bring in an outside Industry Analyst to calculate the actual costs of providing Open Access so the City does not unknowingly violate this statute by relying on the “Cost To Serve” figures.

Sincerely,

Brian Becker
President/CEO
Poplar Bluff Internet, Inc.

ENCLOSURES

COPIES:
Doug Bagby
Bill Bach
Tucker Davis, MU Advisory Board Chairman
Charles Moffit, MU Advisory Board
Richard Landers, MU Advisory Board
Bob Christian, MU Advisory Board
Eric Arnold, TCMax.net
Kevin Cantwell, Big River Telephone
Daily American Republic
SEMO Times

PORTIONS OF MISSOURI REVISED STATUTES (August 2009)
392.180. The provisions of section 386.020, RSMo, defining words, phrases and terms, shall apply to and determine the meaning of all such words, phrases and terms as used in sections 392.190 to 392.530.

392.190. The provisions of sections 392.190 to 392.530 shall apply to telecommunications service between one point and another within the state of Missouri and to every telecommunications company.

392.410(p7) No political subdivision of this state shall provide or offer for sale, either to the public or to a telecommunications provider, a telecommunications service or telecommunications facility used to provide a telecommunications service for which a certificate of service authority is required pursuant to this section. Nothing in this subsection shall be construed to restrict a political subdivision from allowing the nondiscriminatory use of its rights-of-way including its poles, conduits, ducts and similar support structures by telecommunications providers or from providing to telecommunications providers, within the geographic area in which it lawfully operates as a municipal utility, telecommunications services or telecommunications facilities on a nondiscriminatory, competitively neutral basis, and at a price which covers cost, including imputed costs that the political subdivision would incur if it were a for-profit business. Nothing in this subsection shall restrict a political subdivision from providing telecommunications services or facilities:

(1) For its own use;
(2) For 911, E-911 or other emergency services;
(3) For medical or educational purposes;
(4) To students by an educational institution; or
(5) Internet-type services.

DEFINITIONS:
386.20(52) “Telecommunications company” includes telephone corporations as that term is used in the statutes of this state and every corporation, company, association, joint stock company or association, partnership and person, their lessees, trustees or receivers appointed by any court whatsoever, owning, operating, controlling or managing any facilities used to provide telecommunications service for hire, sale or resale within this state;

386.20(53) “Telecommunications facilities” includes lines, conduits, ducts, poles, wires, cables, crossarms, receivers, transmitters, instruments, machines, appliances and all devices, real estate, easements, apparatus, property and routes used, operated, controlled or owned by any telecommunications company to facilitate the provision of telecommunications service;

386.20(54) “Telecommunications service”, the transmission of information by wire, radio, optical cable, electronic impulses, or other similar means. As used in this definition, “information” means knowledge or intelligence represented by any form of writing, signs, signals, pictures, sounds, or any other symbols.