A costly failure to communicate; Vermillion citizens pay for failed franchise talks with higher phon

A costly failure to communicate; Vermillion citizens pay for failed franchise talks with higher phone rates The Plain Talk noted in its June 23 edition that Vermillion is lagging behind several other area communities in telecommunications, largely because negotiations between the city and DTG/McLeodUSA broke down.

This week, the Plain Talk is sharing information it has gathered that indicates Vermillion citizens are paying for the city's failure to negotiate a progressive telecommunications franchise last year.

The Plain Talk is interested in readers' opinions on this issue. Are you satisfied with Vermillion's present cable television, Internet, and phone services? Are you satisfied with the city's council's role in negotiating the present cable franchise? Respond by writing: Letter to the Editor, P.O. Box 256, Vermillion, SD 57069. All letters must be signed and include their writers' addresses and phone numbers to be considered for publication.

by David Lias

Plain Talk Editor

Vermillion citizens and businesses could, in the near future, have been enjoying something much more significant than clear television reception and high speed Internet access if the Vermillion City Council and DTG, known today as DTG/McLeod USA, had reached a cable television franchise agreement a year ago.

Vermillion private and business telephone customers could have been on the verge of saving hundreds and, in some cases, thousands of dollars in yearly telephone costs if DTG/McLeodUSA had a presence in the community.

"Having good cable TV is a wonderful thing, but it isn't going to bring new business to a town," said Pat Mastel, regional counsel for DTG/McLeodUSA. "There isn't going to be a new employer that comes in and says, 'Wow, they've got good cable.' But if you've got good telecommunications and good data networks, that's where it's at. Instead of old switches, you're running through modern fiber optic connections where you can access high speed data and high speed phone."

All at lower costs.

"We're talking about hundreds, if not thousands of dollars of savings per year," he said. "There's one business in Vermillion that we talked to at a meeting, and they literally could save just under $50,000 a year on their phone (if they were DTG customers). There's the key."

Continued on page 10

For several years, Yankton and Vermillion were similar, at least in terms of cable TV services. Both communities were served by Zylstra Communications.

The Yankton City Commission, in September 1998, decided to let DTG and Zylstra compete for cable television business in its community.

That opened a new door of opportunity for Yankton consumers. Not only could they tap into DTG's new state-of-the-art cable TV and Internet network. They could also sign up for phone service at rates significantly lower than those of U S West.

Through the winter of 1998-99, DTG engineers designed a hybrid fiber optic network in Yankton, making phone service from the Irene-based firm possible.

According to information the Plain Talk obtained from DTG/McLeodUSA's Yankton office, local phone service in Yankton from DTG costs $12.75 per month. U S West customers in Yankton pay $16.55 per month, approximately $45 per year more than DTG phone customers.

DTG is finding that home and business owners often need a second phone line to use for data or the Internet. DTG sells that second phone line to its customers for $7.50 per month. A second phone line from U S West costs $15.75 per month, which is $99 a year more than DTG customers.

When DTG began offering phone service in Yankton, it required its customers to change the prefix of their phone numbers. The telecommunications company, however, is now beginning to use local number portability, or LNP, which allows its phone customers to keep their old phone numbers.

DTG also offers dial-up Internet services through its phone lines in Yankton at $17.95 per month for those who don't wish to tap into the newly offered high speed cable Internet service there.

Other communities throughout eastern South Dakota have the potential to someday enjoy similar savings on phone services. DTG/McLeodUSA has already built or is in the process of building telecommunication systems in Madison, Watertown, Mitchell and several small communities surrounding Vermillion.

It currently serves about 3,000 residential users and about 1,350 small business customers. It also offers flat-rate service, meaning customers are charged the same long distance rate 24 hours a day, seven days a week.

DTG/McLeodUSA offers a long distance rate of 10 cents a minute in Yankton, and bills its phone customers there in six second increments. Before Yankton granted the telecommunications company a franchise, it offered both long distance and Internet services in Yankton by renting phone lines from U S West. DTG/McLeodUSA now has its own phone network in Yankton.

When DTG first started selling long distance phone service in Yankton, its rate was 13 cents a minute. In less than a year, the price dropped significantly to 10 cents a minute, offering greater savings to Yankton phone users.

Travel southeast of Vermillion to Elk Point, and you'll find a community enjoying similar savings in telephone costs.

According to 1999 data on phone costs, DTG/McLeodUSA's single line flat rate for business phone service in that community is $17.50/month, compared to U S West's $27.25. Businesses in Elk Point are experiencing single line flat rate savings of $9.75/month, or $117 per year compared to U S West.

Those savings, naturally, grow for Elk Point businesses that require more than one phone line. Businesses that need two lines save $19.50 per month, or $234 per year. The annual savings for three, four and five lines total $350.50, $468 and $585 respectively.

DTG's attempts to gain a presence in Vermillion failed approximately a year ago. Its negotiations with the Vermillion City Council were fraught with difficulties. As the Plain Talk reported June 23, the relative ease with which DTG/McLeodUSA has been accepted in other area communities indicates that Vermillion city leaders came to the table last spring unwilling to compromise.

On Sept. 30, 1999, 10 days before Zylstra's franchise was due to expire in Vermillion, the Vermillion City Council agreed to renew it.

The move allowed the company, and its substandard cable TV system, to keep operating in the city. Shortly after the nonexclusive franchise agreement was met between the city and Zylstra, the cable company was purchased by Mediacom.

Mediacom presently offers cable television service in Vermillion, and has noted it plans to offer high speed cable Internet access here as well. The company, however, isn't in the telephone business. Mohan Samlal, Mediacom's area plant manager from Spencer, IA, said the company may offer phone service sometime in the future.

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