August 8, 2008

The Public Forum... El Foro Público

Telecom Taxes all about eleminating competition

Are you tired of reading/talking about telecom taxes?

Thank you for not putting the new tax on internet/wireless services on the ballot.

I work for a company that reps all of the major, large telecom companies. Our customers sign directly with the major carriers - we are business partners with AT&T, Sprint, XO, Qwest, Verizon Business, O1, AireSpring, Global Xing... (there are dozens)...

Frequently our national customers come to us to check out telecom costs at different locations. Our large customers, like Sony Playsta-tion, will not move to a location that is not in a “green” zone.

In telecom speak, Chula Vista is definitely not a “green” zone, where business-scale bandwidth is readily available and competitively priced. It costs 2-3x more for basic DS1/DS3 services in Chula Vista than in San Diego.

AT&T is the underlying provider for all of the major carriers who sell here.

Below is an example of what is happening in non-”green” telecom zones like Chula Vista.

Just last month, a futures-trading investment customer signed a lease and was moving to a building in Huntington Beach (without checking with us first).

I was shocked to learn that I couldn’t sell ANY TELECOM SERVICES at that location. Worse, the customer’s entire business model was communications-based.

Verizon Business had chosen to not provide anything larger than analog business line capacity —and then even with limits— and the location was too far from a Central Office for even DSL. Of course, because Verizon was the backbone provider, no other carrier could provide service to the building.

This was a 10 year old building. There are 20 separate business tenants in that 6 story building. How in the world were those businesses getting internet/voice/private line services that a business needs??

Well, it turns out that a guy with a dish solved the problem.

It was a one man operation, if you can believe that. He had a dish on the roof that provided wireless internet to most of the tenants in the building.

He independently ran cable throughout the building, and customers enjoyed as much internet/VoIP as they needed.

If that one-man shop had to figure out how to pay state and local taxes on the internet and VoIP and break out bills/etc., he would immediately shut down his business because it would no longer be profitable to create such complicated bills, watch out for every tax, and risk being penalized by state/local jurisdictions for failure to collect & pay taxes.

Without that little dish on the rooftop, the building’s owner would have no choice but to lay out $100K in fees to have a telecom carrier wire into his building.

A 5% or so tax on business internet services may not seem like a big deal, but individual taxes in local jurisdictions complicate and prohibit small and regional players from competing - even in areas that the big carriers don’t want to play.

Taxes are the death of small internet businesses. Taxes require large staff to track new rates/payments/etc. — they’re always changing. A small traditional voice telco can get killed by taxes alone — which is why most small companies resell rather than form their own telecom companies.

Sure, AT&T can handle incremental tax increases. Their systems and switches are built for that. And they have hoards of people who do nothing but track state, local, and federal taxes and update systems.

Sadly, I don’t think we have small internet/wireless alternatives in Chula Vista like the company in Huntington Beach. Hopefully, in the near future, small entrepreneurs will offer competitively priced services in Chula Vista for business customers.

If we maintain the current rules of tax-free and hands-off oversight by the CPUC on internet and wireless companies, whenever the market opens a new niche (or some guy buys a small dish) a startup company is born, services increase and prices decrease for businesses. I hope that happens in Chula Vista. It is certainly happening in Riverside and LA County.

Thank you for standing up against a complicated issue and a major “neutral” party —AT&T— on this matter.

Jill Galvez
Chula Vista

Unbiased study a benefit for the developers

The Mayor and City Council considered spending $120,000 for “an unbiased implementation program for redevelopment of the H Street Corridor between Interstate 5 and Third Avenue.” (Item #10) on July 22, 2008.

The origins of this study date to the 2005 battle against the Espanada hi-rise condominium tower proposed for the corner of Third Avenue and H Street.  Withdrawn in the face of widespread opposition, the Espanada proposal was replaced by a new plan to “study” hi-rise buildings on H Street at some point in the future.

That day has come. While careful not to describe this item as a study of hi-rise buildings, city documents indicate that changes to the General Plan and Urban Core Specific Plan are anticipated from this process. 

If the Mayor and her developer buddies don’t get that residents don’t want hi-rise development situated in our neighborhoods, they shouldn’t consider spending $120,000 of OUR money on proposing such a thing.

They really don’t respect the intelligence of their constituents in the community.

Quit ignoring us to promote profit for developers, who reciprocate with campaign contributions for agreeable elected officials!

Ed Hale
Chula Vista

Vote on City Attorney going before the public

Finally, we are moving towards some independent representation at City Hall!

The City Council has decided to let the Elected City Attorney argument be submitted. Now we just have to wait on a vote by the people of Chula Vista.

I am confident they will see the benefits of a City Attorney not held on a leash by the Mayor and City Council.

An independent City Attorney will not only be able to act as the voice of the people, but now battling corruption and unethical behavior at City Hall won’t mean running into a brick wall.

Even better, our City Attorney won’t become a litigating liability like in San Diego, because council approval will be required before initiating any lawsuit. This will help ensure proper check and balance, and keep taxpayer money from being spent on needless legal fees.

Chula Vista is a big city, and not some backwater, and should have the type of representation that other big cities in California have. This is truly a step forward in the growth of our community.

Rosie Romo
Chula Vista

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