MCC Iowa LLC, a subsidiary of Mediacom Communications Corporation, a long-time cable and broadband provider in the area, has sued the City of West Des Moines and the West Des Moines City Council, alleging that they are improperly using taxpayer-backed financing bonds to build a conduit network that would benefit a single internet service provider–Google Fiber.
Earlier this year West Des Moines approved the measure to build what reportedly would be an open access conduit network, creating a private-public partnership to bring high speed internet to all the city’s residents and businesses, with Google Fiber committing to be the first “tenant” for the municipality’s network, as Telecompetitor reported. According to Mediacom, the claims about the network being open access are inaccurate.
Mediacom has provided internet services for a couple of decades and sees the taxpayer-subsidized open access conduit as providing an unfair advantage for the new competitor, Google Fiber.
The complaints cited in the suit include:
- Entering into a secretly negotiated, exclusive agreement with Google Fiber for the design and use of a taxpayer funded conduit network.
- Unlawfully declaring the entire City of West Des Moines an “urban renewal area” under the Iowa Urban Renewal Law, while classifying the conduit network as an “urban renewal project.”
- Using the Urban Renewal Law to issue $42.8 million in taxpayer-backed bonds with minimal voter oversight and input.
- Using city resources for a marketing campaign encouraging residents to connect to the conduit network and use Google Fiber’s services.
“The facts are they made a deal out of public view, used a law intended for blighted areas to fund bonds, and took actions that will destroy marketplace competition,” said Thomas Larsen, Mediacom senior vice president, government and public relations, in a prepared statement about the Mediacom West Des Moines lawsuit. “We aren’t asking for any special treatment, just a fair and balanced regulatory environment that allows us to expand our network and compete for the business of West Des Moines consumers.”