DTG Seeks Iowa Vote for Franchise

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Voters in Storm Lake, Iowa, will go to the polls next month
to decide whether the community still wants to introduce competition to the local
telecommunications market.

Following an April 19 public hearing, a May 25 election
will decide if Storm Lake grants Dakota Telecommunications Group the right to offer local
cable and telephone services to the 8,800 residents of the northwest Iowa community.

It's considered likely that the town will vote in
favor of bringing in competition now that it has placed plans for a municipal overbuild on
hold because of DTG's willingness to fund the cost of building a second cable
network.

Originally, Storm Lake officials planned to spend $6
million on a telecommunications network that would have been leased to private providers
of video and telephone service.

"Obviously, if DTG comes in and does it, the city
doesn't have the risk of $6 million," Storm Lake city administrator Alan Winders
said.

In the meantime, AT&T Broadband & Internet
Services, which now operates the town's former Tele-Communications Inc. system, plans
to upgrade its local network sometime this year, followed by the introduction of its
high-speed @Home Network cable-modem service, regional communications director Deb Blume
said.

Moreover, it has begun offering digital programming and
opened a local office in the community, Blume added.

If its franchise is approved, Irene, S.D.-based DTG would
also pursue its usual strategy of overbuilding the incumbent local-exchange carrier, which
would be U S West in this case.

"That's our niche market," said Bill
Heaston, DTG's assistant general counsel. "As a rule, these small, rural
communities are not happy with the quality of their service."

A subsidiary of McLeodUSA -- a Cedar Rapids, Iowa-based
phone company already competing in the cable market in its home state -- DTG currently has
a total of 34 cable franchises in three states, with 26 systems up and running. For 1999,
the company has 11 overbuilds planned, in Iowa, Minnesota and South Dakota.

In Storm Lake, where construction would begin next year,
plans call for a 750 megahertz, 63-channel cable system that would compete against
AT&T Broadband.

"I think [that the election] is going to go well.
They're anxious for us to get in there," Heaston said. "Ultimately,
we'll be able to provide high-speed-data services and all of the bells and whistles
that people seem to feel that they need."

Winders said he believes that voters will give DTG the
green light. It hasn't been lost on residents that improvements to the existing local
cable and telephone infrastructure did not begin until the community authorized the
creation of a telecommunications network.

"The systems here had gone a number of years without
significant reinvestment," he said. "Since our election, the incumbent operator
has announced an upgrade of the cable infrastructure. Before, we couldn't get caller
ID or call waiting. Are these improvements because of our election? I don't know.

"But I know that it led the voters to say, 'If
nobody else is going to make sure that we stay connected to the rest of the world, then we
will,'" Winders added.

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