Mediacom Rate Hikes Rile Dubuque - Multichannel

Mediacom Rate Hikes Rile Dubuque

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Spurred by concerns over ever-rising cable rates and "technically uncertain" digital-subscriber line service for businesses, Dubuque, Iowa, is the latest city to consider building a municipal telecommunications system.

Unlike other potential municipal video operators, though, the city of 60,000 doesn't have an electrical utility from which to spin off a telecom operation. The only city-run utility sells water and manages wastewater.

Some city-installed fiber lines are in place, though, connecting local government buildings.

A municipal plant would compete against a sole terrestrial video supplier, Mediacom Communications Corp.'s local cable system. According to the RFP, the cable operator enjoys an 88- to 92-percent penetration rate.

In Dubuque, over-the-air TV signals are weak without a cable connection. DBS penetration is low because the providers don't offer local signals, according to the city.

Consumers and local media outlets have been critical of Mediacom, which said it would hike its basic rates by 14 percent. The operator's lowest-level service tier, a 71-channel package, now sells for $41.95 per month.

But while noting consumers were "concerned, even outraged" by the soaring cable TV prices, the Dubuque Telegraph Herald
recently editorialized that the concerns don't merit a city system.

The editorial noted there is no infrastructure in place, thus no guarantee the city could provide cable service more economically than Mediacom.

Mediacom operates a 550-megahertz plant that is fully programmed, according to the city. The operator provides cable-modem service and is about to introduce a measured broadband service to businesses.

Mediacom's franchise expired in September 2001, but the city and the operator continue to negotiate a new agreement.

Telephone service already is being provided by Qwest Communications International Inc. and McLeod USA, as well as a handful of cellular service providers. Qwest also offers digital subscriber line service, which the city has classified as "technically uncertain." Businesses complain of ordering delays, high prices and the uncertain availability of T-1 phone lines as well.

Internet connectivity is also provided by a wireless provider, You-Squared.

Despite that high level of competition, the city's study will examine the feasibility of building enough plant to serve the city's 25 square miles.

The RFP also mentions homeland security as a good reason for a telecommunications operation, which would provide a "robust, self-healing" network with backup power.

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