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Hawaii Road Runner Customers:
Tax and franchise fees do not apply to Internet Access:

November 15: Oceanic's ridiculous response to Marilyn's inquiry apparently indicates that Hilo Hawaiian Cablevision will continue to charge the State Cable Franchise Fee, but not remit it to the State - instead placing it in an interest-bearing account. Apparently, Time-Warner's Oceanic and affiliates are not providing customers with "Internet Access", only a link to the customer's "ISP" - Road Runner. (Road Runner, LLC is wholly owned by Time-Warner as is Oceanic and its outer-island "affiliates".) Apparently, the $44.95 charge for "Road Runner Service" on my Sun Cablevision bill is really only a charge for the "link" to this "free" ISP they own and connect me to? It's not Internet Access? My GET tax-exempt charge for Internet Access is zero?

----- Original Message -----
From: Kiman Wong
To: Marilyn
Cc: Kit Beuret
Sent: Wednesday, November 14, 2001 4:11 PM
Subject: RE: Internet access tax and franchise fees (2nd Attempt)

I apologize for not getting back a timely response on your question.  It was my fault that I did not forward the response to you.  However, here is the answer to your question.

I hope this answers your question on this issue.  Please let me know if you have any further questions and I promise to get to the correct person on a timely manner.


Kiman K. L. Wong
General Manager-Internet Services
Oceanic Cable
Phone: (808) 625-8335
Fax:     (808) 625-5888

The following Word document was attached. Note it appears to be unfinished as there is no closing/signature; also note that it is dated November 1:

November 1, 2001


Dear Ms. Wells:

Thank you for your email of October 20, 2001.  I regret that you did not get a timely response from Linda Thompson.

Hawaiian Cablevision provides your residence with a link to your ISP, Road Runner.  The excise tax is a tax on the service provided by Hawaiian Cablevision, not actual Internet access.  Our cable modem service has been treated as a cable service for franchise purposes, including remitting franchise fees to the local franchising authority (the Department of Commerce and Consumer Affairs – Cable TV Division) on revenues derived from this service.  The Ninth Circuit Court of Appeals in the case of AT&T v. City of Portland has ruled that Excite@Home, a cable modem service proposed by AT&T for carriage over its cable system in Portland is not a cable service.

The Ninth Circuit’s ruling has cast some uncertainty on how a cable modem service should be classified.  In fact, the proposed classification of this service is presently under consideration by the Federal Communications Commission and the United States Supreme Court.

In light of the present uncertainty and pending clarification as to the classification of this service, Time Warner believes it is prudent to continue to collect franchise fees on cable modem service but such amounts will be held in a separate interest bearing account pending clarification as to their proper disposition.  Ultimate disposition should result in one of the following:  (i) refund to our customers; or (ii) remittance to the Department of Commerce and Consumer Affairs.  Time Warner will not benefit from either of these two scenarios.

On November 16, Marilyn sent this reply to Kiman Wong:

----- Original Message -----
From: Marilyn
To: Kiman Wong
Sent: Friday, November 16, 2001 3:35 PM
Subject: Re: Internet access tax and franchise fees (2nd Attempt)

Dear Kiman,
Could you please have the original response (with an address and authentic signature) sent to me via USPS?  The response you sent me via email was unsigned and contained no originating address.  It appears to be from someone within Hawaiian Cablevision and thus I conclude that the statements therein apply ONLY to Hawaiian Cablevision users and not to Sun or other affiliate or Oceanic users.  Please explain the reason for this lack of uniformity within Oceanic, its affiliates and the subscribers.
Could you also please send me the docket numbers for the cases before the FCC and the U.S. Supreme Court regarding the classification of cable modem?
According to my understanding of the response you sent me, the decision to continue to collect  franchise fees/taxes,  but place them in an interest bearing account, is to be effective beginning November 1, 2001 and applies ONLY to Hawaiian Cablevision users.  Is this correct?  If not, could you please tell me when Time Warner began placing the franchise fees/taxes that it collects from users into an interest bearing account?  If this policy is not new and doesn't apply just to Hawaiian Cablevision users, then is Time Warner applying this policy uniformly to all its RR subscribers through out the jurisdiction of the Ninth Circuit Court?  Am I to understand correctly that until November 1, 2001, Hawaiian Cablevision not only collected but remitted to the state the franchise fee that it passes on to the user?  Is this also true regarding Oceanic itself and the other affiliates?  
What is the explanation for the deceptive billing statements sent to users?  There is no mention of the franchise fees being placed into an interest bearing account instead of being remitted to the state.  There is also no mention of the questionable legality of Oceanic and its affiliates even collecting these fees from users within the Ninth Circuit Court's jurisdiction.   The user should be informed of this on the statement and should be given the option of not paying the fee, if they wish, unless and until a final determination is either made by the FCC or the U.S. Supreme Court.  Until then the Portland ruling applies and users should be made aware that collecting this fee is presently illegal.
The assertion made by the unknown respondent, that Hawaiian Cablevision provides a link to my ISP  but doesn't provide actual internet service is ludicrous. That would mean that RR is free. RR is solely owned by Time Warner which solely owns Oceanic and its affiliates.  Oceanic and its affiliates state repeatedly that they are offering internet service in their advertising.  This is a lie if subscribers are paying for a "link" to their ISP but are not paying for internet service.  No where does Oceanic's advertising state that the subscriber pays only for a link to the free internet service.  Further, the subscriber agreement between myself and Oceanic and its affiliates states that the "Road Runner Service offers subscribers internet access..." so how can the charge for Road 'Runner Service not legally be a charge for internet access?  Additionally, the Road Runner Residential Order Form and Contract which I signed states that  "the subscriber named below (Subscriber) agrees to purchase from Time Warner Entertainment Company, L.P. Hawaii Division (TWE-HAWAII) the Road Runner Residential Service in accordance with the Road Runner Residential Terms and conditions of Service". But I didn't purchase the Road Runner Residential Service according to the unknown respondent.  Instead I purchased a "link" to this service.   It appears to me that this assertion by the unknown letter writer from the unknown address is a feeble attempt to get Oceanic and its affiliates off the hook for collecting an illegal internet access tax.
These are just a few of the questions that occur to me. 

As of the last update to this page, no response has been received to the November 16 reply and additional questions.

On November 19, a complaint was filed with the DCCA. See the complaint.


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