Judge dismisses Mediacom suit challenging ImOn deal in Iowa City

Judge: Cedar Rapids company was not required to obtain franchise agreement

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IOWA CITY — A federal judge has dismissed a lawsuit from Mediacom Communications that asserted Iowa City is giving an unfair advantage to rival ImOn Communications.

In its suit against the city and ImOn, Mediacom said the city violated municipal code and state law by not requiring ImOn to obtain a franchise agreement with the Iowa City, required if the company is to provide cable television service.

ImOn, which currently provides only internet and telephone service in Iowa City, entered into lease agreements with the city to use its fiber-optic network and install and maintain a network on the city’s right of way.

“Although ImOn is constructing in Iowa City a system that may be capable of delivering cable programming, ImOn is not now delivering cable programming,” U.S. District Judge Charles Wolle wrote. “Therefore, ImOn is not presently required to seek a cable franchise.”

ImOn, a Cedar Rapids company that includes The Gazette Company among its investors, does provide cable services elsewhere in Iowa.

Iowa City City Attorney Eleanor Dilkes said a franchise agreement allows a cable company to access a city’s right of way but is not required with other services like internet or phone.

According to the decision, the city and ImOn said there was no legal basis to prove Mediacom’s assertion that ImOn was “required to obtain a cable franchise in order to begin constructing a system capable of delivering cable programing.”

Mediacom said the city also provided ImOn with an unfair advantage by signing the leases and undermined Mediacom’s existing franchise agreement. The judge ruled Mediacom had no “factual or legal basis” for the claim because the companies do not both provide cable services inside the city.

Phyllis Peters, communications director for Mediacom, said her company plans to appeal. Mediacom’s take on the issue has not changed since the leases were filed, she said.

“Why the decision-makers in Iowa City chose to skew the playing field, we don’t understand,” Peters previously told The Gazette. “We are seeking an outcome that puts Mediacom on a level playing field with its competition. We think it’s inappropriate that government picks winners and losers.”

Ed Pardini, senior vice president of Mediacom, previously said the franchise agreement comes with obligations, like paying $1 million annually for use of city right of way and public access. It also must operate a local office and provide free basic cable services to schools and government buildings.

In the decision, Wolle said that if ImOn chooses to provide cable service to Iowa City in the future. it “need not” seek a franchise agreement.

However, Dilkes said it is clear this wording was a typo — and that ImOn would be required to obtain a franchise agreement if it wanted to provide cable.

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