Iowa Town Is 12th to OK TCI Overbuild

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Carroll, Iowa., has become the seventh community in the
state since November to authorize at least a study of a municipal overbuild of
Tele-Communications Inc.

Residents in the western Iowa community of 10,000 voted
934-188 last Tuesday -- by an 80 percent margin -- to create a local communications
utility and to authorize the formation of a board of trustees to oversee the new entity.

In the interim, a local committee comprised of area
residents and city officials will begin evaluating the possibility next month of building
a telecommunications network capable of competing for TCI's estimated 3,500
subscribers in Carroll.

But whether the voters' overwhelming support of the
project will ever result in a real threat to TCI remains unclear. City officials urged
caution last week.

'Voting on a concept is different than voting on
money,' said Carroll Mayor Tom Gronstal. 'Now we have to come up with something
that we can afford.'

TCI officials said the decision to study the project in
Carroll doesn't necessarily torpedo the MSO's belief that the tide has turned
against municipal overbuilds in the state.

TCI spokeswoman Deborah Blume said city officials have
admitted that they rushed the issue before the voters out of fear that the Iowa Telephone
Association will succeed in passing legislation that would prohibit municipalities from
offering local telephone service.

'They wanted to be grandfathered in if the legislation
passes,' Blume said. 'Now they have to do a thoughtful financial study, because
they have no clue what that system is going to cost, especially in these technologically
changing times.'

Carroll's vote made it the 12th TCI community in the
last three years to at least consider overbuilding the MSO, including six that approved
such referendums in November.

Since then, however, the cities of Greenfield and Humboldt
have dropped plans for municipal telecommunications networks, citing concerns about costs.

'People are starting to get worried about the amount
of money being spent on these things,' Blume said.

Gronstal conceded that early estimates placed the cost of a
municipal system at as high as $3,000 per household, which could mean a price tag totaling
as much as $12 million.

Nevertheless, he said, momentum is building among cable
subscribers who are aware that they're paying $6 per month more for fewer channels
than a municipal cable system in nearby Harlan offers.

'People see other towns in Iowa with more channels and
lower costs, and they believe that they should have that, too,' Gronstal said.
'Plus, Harlan built its system and TCI dropped its rates, so people here can see the
benefits of competition.'

Moreover, local residents worry that large
telecommunications outfits like TCI and AT&T Corp. will place locations like Carroll
far down on their priority lists when it comes to offering enhanced services, he added.

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