Backchannelmedia

Waterloo Courier

Mar. 4--WATERLOO --- Rocco Commisso isn't only threatened by a statewide initiative to establish publicly owned municipal telecommunications utilities. He's "personally offended" by it.

The CEO of New York-based Mediacom Communications Corp., the largest cable TV provider in Iowa, believes the initiative --- dubbed Opportunity Iowa --- is a "scheme" that puts cities at risk of falling into massive debt while allowing government to unfairly compete with private telecommunications companies.

The nonprofit group Opportunity Iowa, headed by telecommunications entrepreneur Clark McLeod, is promoting referendums throughout the state, including Waterloo, for local residents to vote for the creation of city-owned fiber-optic utilities. A local group headed by businessmen Ross Christensen and Rick Young is working to hold a referendum here.

"I cannot stomach something like this happening to Mediacom. I'm going to fight this thing tooth and nail," said Commisso, who led a group of Mediacom executives during a meeting with Courier editors this week.

"It's nothing less than a gimmick. Where I come from, they would call it a racket. I cannot compete with government."

Mediacom is lobbying for legislation currently on file in both the House and Senate that would require independent studies, public hearings and maximum cost estimates prior to a vote. It would also require a 60 percent vote of approval, much like those needed for bond referendums, to support a municipal telecom utility. The bills would require competitive bidding and would forbid transfers of surpluses from other city utilities to a telecom utility and would require municipalities to repay any debt from the revenue generated, not with general obligation bonds.

"Opportunity Iowa represents misguided public policy," said Charles King, Mediacom vice president of Iowa operations. "The citizens of Iowa should not be forced to assume the significant debt burdens proposed by this organization's plan without full disclosure of the costs, risks and conflicts of interest."

Christensen has said that if voters approve the citywide referendums, a study would determine whether actual financing, construction and operation of a municipal fiber utility are feasible. That leaves communities with little risk, he said.

Backers of Opportunity Iowa have said fiber optics are needed for economic development in a technology-driven world. They point to business growth in Cedar Falls they attribute to the deployment of fiber optics by Cedar Falls Utilities. They further contend that private companies like Mediacom and Qwest have not fulfilled that need and that local governments should be given the option of taking the initiative.

Locally, Christensen and Young have said that Mediacom has reneged on promises it made in 2001 to wire the entire city with high-speed Internet access.

Koebrick said that all parts of Waterloo have access to its high-speed infrastructure. In addition, Mediacom has provided access to rural areas it serves.

"People talk about the digital divide: we made sure that in all the areas we serve that doesn't exist," said John Koebrick, Mediacom senior director, government relations. "In the past three years alone, we've invested $300 million in the state to upgrade cable networks and deploy fiber optic cable."

Mediacom officials also contend that McLeod is proposing this initiative as a way to make money without risking his own capital. They point to McLeod's forming a for-profit company, Fiber Utilities of Iowa, which would compete for management contracts for the local fiber-optic systems.

"He's putting nothing at risk," said Commisso of McLeod, the former CEO of McLeodUSA, which in 2002 filed the largest bankruptcy in Iowa history.

-----

To see more of the Waterloo-Cedar Falls Courier, or to subscribe to the newspaper, go to http://www.wcfcourier.com.

Copyright (c) 2005, Waterloo-Cedar Falls Courier, Iowa

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

MCCC,