By Perry Beeman, Iowa Capital Dispatch
Mediacom has amped up its fight over West Des Moines’ $42.8 million taxpayer-financed partnership with Google Fiber to install a citywide high-speed broadband system.
In amended filings in Polk County District Court filed this week, Mediacom, a major local competitor to Google Fiber, accused the city of forging a secret deal with Google Fiber that violated urban renewal law and sidestepped a public referendum. In court documents, the city lays out how it complied with both urban renewal rules and regulations requiring public input.
Mediacom provides internet service across West Des Moines and Google Fiber plans to do the same.
The city emphasized that the conduit network, which will be installed free at homes and businesses by request, eventually will be available to other companies, promoting competition.
But the contract gives Google Fiber 18 months of exclusive use, Mediacom asserts. That will give Google Fiber a chance to establish a monopoly, Mediacom contends, all with a taxpayer subsidy.
A profit-sharing arrangement with Google Fiber “encourages the city to favor and promote” that company, Mediacom contends in filings in Polk County District Court. Google Fiber is expected to pay the city $2.25 per month for each household that connects to its network, with a minimum of $4.5 million over 20 years.
Google Fiber does not currently provide broadband service across West Des Moines, but plans to offer high-speed service when the system is installed. This is the company’s first conduit network project for high-speed broadband in Iowa.
Residents and businesses will have the option of signing up for Google Fiber service or other companies’ services, the city notes.
The plaintiffs also say that Google Fiber will skew the market both by controlling the timing of the improvements, and the technology associated with it. That could force other companies to build their own networks, Mediacom adds.
Mediacom also objects to what it calls “misleading marketing” by the city in its “Plant the Speed” campaign “through mailings, newsletters, online videos and a city-operated website.”
The city’s use of $42.8 million in taxpayer-backed bonds without a public referendum also is at issue, as is the no-bid nature of the project. Mediacom said the city is using urban renewal law typically aimed at helping restored blighted areas to make improvements across West Des Moines, one of the metro’s most-affluent areas.
The city’s contention that the project will improve internet service and promote competition is “knowingly and intentionally false,” the lawsuit alleges. “The city’s planned conduit network has nothing to do with urban renewal or promoting competition,” Mediacom says in the amended petition. “Instead, the city is using taxpayer money to build a conduit network for Google Fiber’s exclusive use.”
Mediacom also objected to the role of West Des Moines City Councilman Matthew McKinney, who has lobbied for Google. McKinney has abstained from votes on the project.
City officials declined to answer questions about the lawsuit. They issued the following statement:
“We continue to strongly disagree with Mediacom’s allegations, and we have no intention of abandoning our efforts to make this citywide project a reality. All the steps we’re taking are consistent with the language and purpose of Iowa law. We remain committed to installing the infrastructure that can help bring reliable, high-speed internet options to our residents and businesses because that’s what they have asked us to do.”
In a motion to dismiss the Mediacom lawsuit, city lawyers noted that the urban renewal law was amended in 1985 to give cities broad power to use it in economic development efforts. “Mediacom’s lawsuit demonstrates a fundamental misunderstanding of the urban renewal law,” the city’s motion said. “For more than thirty years, the urban renewal law has expressly authorized cities like West Des Moines to use urban renewal financing ‘to provide general economic development for a community.’”
The city noted that “construction and improvement of infrastructure” is one of the uses outlined in state urban renewal law. After describing the Iowa Supreme Court’s decisions upholding that type of action by cities, West Des Moines added: “Mediacom’s assertion that the city is misusing urban renewal is simply wrong.”
City officials: We followed state law
In the same court filing, the city notes it published notice of its intent to issue the bonds and, after no one petitioned for an election, held a public meeting on July 6, 2020 on the bonds. That procedure met state law, the city says.
The court should dismiss the case, the city said, because the services Google Fiber would offer are exempt from competitive bidding requirements; Mediacom’s challenge fell outside of the statute of limitations for the bonds; and because the city met requirements of state law. As of Thursday morning, the courts’ online system did not show a ruling on the motion to dismiss.
The city’s website for the project says that citizens and business groups regularly list the need for high-speed internet service as a top priority. Burying the conduit to provide fiber optic service will mean better, more reliable service, the city reported.
The project meets a goal set in the city’s 2015 long-range plan.