News

Iowa Overbuilder Pulls Back

7/25/1999 8:00 PM Eastern

Iowa cable operators got some good news last week when
Irene, S.D.-based Dakota Telecommunications Group canceled plans to acquire any additional
cable franchises in the state.

With 15 cable overbuilds already planned for South Dakota
and Minnesota this year, officials for the McLeodUSA subsidiary said Storm Lake will be
the only Iowa community the company will enter in the near future.

DTG assistant general counsel Bill Heaston said the
decision was based on the company's desire not to overextend itself, and not because
city officials were making exorbitant demands.

"We didn't want to be accused of stockpiling
these franchises," he added.

Most recently, DTG had reportedly been looking at acquiring
a franchise in Cherokee, Iowa. "They wanted us to come in," Heaston said.

DTG's decision to pull back also scraps possible
franchises it was looking at in Humboldt and Dakota City, Iowa -- two communities that sit
side-by-side about 100 miles northwest of Des Moines, which are currently served by
AT&T Broadband & Internet Services.

DTG still plans to overbuild AT&T Broadband in Storm
Lake, where it will construct a network capable of delivering cable, Internet access and
local and long-distance phone services to 8,800 local residents.

Originally, Storm Lake officials had planned a $6 million
municipal network that would have been leased to private providers of video and telephone
service. Those plans were shelved when DTG offered to foot the cost of building a private
network.

AT&T Broadband has responded by announcing plans to
upgrade its Storm Lake system later this year, followed by the introduction of its
high-speed Excite@Home cable-modem service.

Meanwhile, Heaston did not dismiss the chances of looking
at other franchises in Iowa in the future.

"It's eight months until the 2000 building
season," he said. "Who knows what might happen? But I wouldn't want to get
anybody too excited."

DTG's decision to pull back was good news for Iowa
cable operators, which have struggled against a growing number of municipal overbuilds.

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