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Hawaii
Road Runner Customers:
Tax and franchise fees do not apply to Internet Access:
November 21: 3 Hawaii Road Runner customers and I today filed a letter of complaint with the Department of Commerce and Consumer Affairs. The complaint seeks a refund of State Cable Franchise Fees and Hawaii State General Excise Tax (GET) charged on Road Runner service.
We are asking to "change the rules" (to have the complaint handled by DCCA-OCP, not by DCCA-CATV). The complaint probably isn't officially considered as filed until November 21 when official DCCA-OCP and DCCA-CATV complaint forms were submitted; the official, signed and filled in forms refer to the following letter and exhibits:
19
November 2001
Kathryn
S. Matayoshi, Director - DCCA
Stephen H. Levins, Acting Executive Director - DCCA-OCP
Clyde S. Sonobe, Aministrator - DCCA-CATV
Department of Commerce and Consumer Affairs
Princess Kamamalu
1010 Richards Street
Honolulu HI 96813
Dear
Ms. Matayoshi, Mr. Levins and Mr. Sonobe:
The
9th Circuit Court of Appeals ruled in June 2000 that cable modem
service, such as Oceanic’s Road Runner, is not a Cable TV service. Currently,
the DCCA requires customers of cable modem service to file any complaints
regarding the service with the Cable TV division. The Cable TV Division lacks
authority to regulate or enforce consumer protection laws with respect to this
service, and we suggest that the State of Hawaii immediately change its website,
instructions to consumers, and procedures such that any complaints regarding
cable modem service be filed with and investigated by the Office of Consumer
Protection.
We
request that this complaint against Oceanic Cable and its affiliates involving
Road Runner, a cable modem service, be considered and acted upon by the Office
of Consumer Protection. Each of the authors requests to formally participate and
appear individually pro se in a formal complaint proceeding before the
OCP that, among other things, seeks individual consumer redress that may also
apply to other customers of Oceanic, its affiliates, as well as to other
non-affiliated providers of Internet Access in Hawaii.
It
is unlawful for Oceanic and its affiliates to charge and collect State Cable
Franchise Fees on Cable Modem Service.
By
e-mail to Kiman Wong, General Manager of Oceanic Cable Internet Services dated
October 21, 2001, a request was made for refund of illegal State GET and Cable
Franchise Fees being billed for Road Runner service; and, to cease billing these
illegal charges. A copy of the
e-mail is attached as Exhibit ‘A’.
On
November 14, 2001, Kiman Wong responded by e-mail to the request. The response,
attached as Exhibit ‘B’, includes a Microsoft Word document attachment that
has no return address, no signature, and is dated November 1, 2001. This
response indicates that Hawaiian Cablevision of Hilo, an Oceanic affiliate,
intends to continue to charge and collect State Cable Franchise Fees, but will
not remit these fees to the State of Hawaii.
The
undersigned complainants believe that as of the effective date of the 9th
Circuit Court ruling referenced in attached exhibits, Oceanic and its affiliates
have engaged in deceptive billing practices, and have charged each of us State
Franchise Fees illegally. We request refund of these charges, and an order
preventing continued billing of these illegal charges. Oceanic and its
affiliates have also charged and collected General Excise Tax on amounts billed
for State Franchise Fees, and we request refund of these charges as well.
Oceanic’s
November 14 response does not make clear when or if all Oceanic affiliates
stopped remitting State Franchise Fees on cable modem service and began placing
them in an interest-bearing account. There has been no public disclosure of this
action, and it is unclear if DCCA-CATV is aware of Oceanic’s billing
practices.
While
the Oceanic response states that it will not benefit from the ultimate
resolution of monies placed in an interest-bearing account, consumers are
clearly harmed by this apparent unilateral action of the Company. The Company
will be collecting and holding funds it is in no way entitled to. Because people
disconnect and move, any ultimate refund to consumers will prevent some
customers from receiving their refund of these illegal charges. All customers
apparently will be involuntarily contributing to this account.
Because
the 9th Circuit ruling was not appealed, any future decision by the
FCC or Supreme Court that may change the classification of cable modem service
so that State Franchise Fees may legally apply will not change the current
illegality of collecting these fees.
The
undersigned complainants request that Hawaii General Excise Taxes billed for “Road
Runner Service” be refunded; and, an order preventing Oceanic from continuing
to bill these unlawful taxes.
Oceanic’s
November 14 response indicates that the reason GET has been charged is that the
company is not charging for “Internet Access”. This is ludicrous. Please see
the response of Marilyn to Mr. Wong’s November 14 e-mail. The response is
attached as Exhibit ‘C’.
General
Excise Tax currently is not consistently charged by the various providers of
Internet Access in Hawaii. Currently, a number of providers, including AOL-TimeWarner’s
AOL dial-up service, do not charge (and presumably do not remit to the State)
GET. A number of providers, including AOL-TimeWarner’s Road Runner service do
charge (and presumably do remit to the State) GET.
Sincerely,
Marilyn
Wells
Richard Gamberg
Patrick Balvin
Enclosure - Exhibits
The
enclosures are available on this website - Exhibit 'A',
Marilyn's original letter is on Tax Page 1;
Exhibit 'B' and Exhibit 'C'
are both on a single page of this site; Exhibit B consists of the e-mail and
attached Word document sent to Marilyn by Kiman Wong on November 14; Exhibit C
consists of the e-mail response of Marilyn to Mr. Wong sent on November 16.