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Utah, Iowa Tee Up Muni Providers

12/08/2002 7:00 PM Eastern

Communities in Utah and Iowa could become the latest to join the ranks of municipal cable operators.

The Board of Water, Electric and Communications Trustees in Muscatine, Iowa, has approved the purchase of the local cable system from Mediacom Communications Corp. Also, Springville, Utah, has taken advantage of the failure of Internet-service provider Airswitch to buy a fiber-optic plant it may use to deliver video programming and monitor utility meters.

The Muscatine utility has been providing cable and high-speed data service since 1997, which now competes with Mediacom. At $12.20, the city utility's basic charge is $2 lower than Mediacom.

According to the board, the city has entered an asset purchase agreement with Mediacom, paying $9 million to buy a portion of the MSO's Quad Cities cluster that serves Muscatine and Fruitland, Iowa. A utility company spokesman did not have subscriber count information on the system purchase.

Drops overbuild

For Mediacom's part, it sheds a competitive system purchased in 2001 as part of a four-state system acquisition from AT&T Broadband.

The city councils in both Muscatine and Fruitland must vote to allow the MSO out of its cable franchise before the deal can move forward, according to a spokesman for the utility. The power company hopes to complete the deal before the end of this year.

Twenty-seven Iowa communities already have municipal cable systems.

The 20,400-population Utah community bought its local fiber optic network for $37,000 from its former ISP. The city has not yet firmed up plans for the network, but will continue free Internet service to about 200 residents who were participating in an experimental program offered by the ISP.

Springville, near Park City, Utah, is served by an AT&T Broadband cluster.

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