The city of Independence, Iowa, a rural community of 6,000 residents, hopes to launch its municipal cable network in October, three years after voters approved the project.
Independence Light and Power, the municipally owned electrical utility, expects to capture 50 percent of the 2,500 area homes currently wired for AT & T Broadband video service.
It hopes to do just as well among 350 area businesses when it launches high-speed Internet access in December, network general manager Darrell Wenzel said.
"It's a matter of localism," he added. "People will know that their money will go back into the system and into providing more services to them."
Once launched, Independence will join a list of nine Iowa communities that have decided to compete against AT & T Broadband, including Cedar Falls, the nation's most successful municipal overbuild.
Wenzel attributed the launch delay to rapidly changing technology.
"City officials wanted to make sure they got the right technology. And to my knowledge, this will be the most state-of-the-art system in the state," said Wenzel, who formerly managed the Tele-Communications Inc. system in Waterloo, Iowa, now operated by AT & T Broadband.
Wenzel said the Independence network will be an 860-megahertz system, designed to 125 homes per node, with a capacity of delivering 49 basic-cable channels, nine premium services and four pay-per-view channels. It can also be converted to offer telephone service, in competition with U S West, sometime in the future.
"We're going to see how our customers react before we decide" whether to enter the local-exchange business, he added.
AT & T Broadband, meanwhile, has upgraded its local network and launched "AT & T Digital Cable." But MSO officials declined to discuss futures plans for high-speed-data service AT & T@Home or local telephone service, arguing that the situation calls for the MSO to play its cards "close to the vest."
"Since the municipal network hasn't launched yet, I think we'll keep our competitive plans to ourselves," AT & T Broadband regional communications director Deb Blume said.
Despite their small size, Iowa communities like Independence are increasingly opting to offer cable and Internet services over their municipal electrical systems.
"Small, rural communities would have to wait until large MSOs build out larger communities," Wenzel said. "And it would be many years before it trickled down to their communities."
Moreover, building a high-speed communications network also helps to boost economic development by encouraging outside businesses to relocate to such communities, he added.
"The best example is Cedar Falls," Wenzel said. "Since they built their network, their local industrial park has been ballooning. That's the best indicator of how businesses view such networks."