The city of Wellman, Iowa, has apparently decided to take
its chances with Mediacom LLC, rather than trying to force the sale of its existing cable
system to the city.
Officials in the community of 1,125 residents voted
unanimously last week to renew Triax Telecommunications Co. L.L.C.'s cable franchise,
then transfer the agreement to Mediacom, a Middletown, N.Y.-based operator with a deal to
acquire the local network.
Mediacom is in the process of acquiring Triax's
operations in Iowa, along with systems in six other states, for $740 million.
In exchange, Wellman gets a franchise calling for an
upgrade to 550-megahertz capacity, along with the right to pursue a second cable operator,
Triax spokesman Tom Bordwell said.
"I think the more we talked to them about the upgrade,
the more their comfort level grew," Bordwell said. "And if they want to bring in
someone else, they can still do that."
The city has been talking about issuing a competitive
franchise to Wellman Cooperative Telephone Co., a rural cooperative that has expressed an
interest in getting into the cable market.
Under Iowa law, the city must hold two more readings on the
Meanwhile, the city's unanimous decision took some
observers by surprise.
The City Council hadn't been able to decide whether to
approve Triax's 10-year renewal proposal or try to force the MSO to sell the system
to the community by exercising a right-of-first-refusal clause in the old franchise.
"I was certainly surprised that it was a unanimous
vote," said Pat Callahan, the city's cable consultant.
It was virtually certain, however, that the city would not
have approved a renewal for Triax, given the company's recent rash of service
Originally, officials has been considering acquiring the
network, then running it as a municipal utility or selling it to WCT. But Callahan said
Triax would have claimed that the city's right to acquire the system lapsed when its
franchise with the company expired.
Callahan said the overwhelming vote makes it unlikely that
city will change its mind. "If it had been a 2-2 vote, I would be less
confident," he added, "but I've also learned never to say never."
Bordwell said the upgrade of the Wellman network will take
two years, and it will allow Mediacom to introduce digital and high-speed Internet service
in the community.
Part of Mediacom's plan, he added, is to consolidate
the number of headends that serve Wellman, along with the neighboring communities of
Riverside, Lone Tree and Williamsburg.
Overall, Mediacom wants to reduce the 300 headends it is
acquiring from Triax down to about 50, he added.