News Track: Mediacom asserts Iowa City allowing ImOn unfair advantage

Mediacom lawsuit set for appeals court hearing

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A legal fight that involves two Iowa internet service providers and Iowa City is just a few months away from hitting the two-year mark.

Mediacom Communications sued Iowa City in December 2015 over a set of agreements the city made with a Mediacom competitor, Cedar Rapids-based ImOn Communications. In March 2016, Mediacom expanded its lawsuit to include ImOn.

Folience, The Gazette’s parent company, is an investor in ImOn.

New York-based Mediacom accused Iowa City of giving ImOn an unfair advantage as ImOn expands its services into the city. While Mediacom has a franchise agreement that requires it to pay certain fees — almost $900,000 in 2015, the company said in court filings — to the city, Mediacom asserted Iowa City has allowed ImOn to expand without one.

U.S. District Judge Charles Wolle dismissed Mediacom’s lawsuit in August 2016. Since ImOn was not providing TV service at the time, a franchise agreement was not required, Wolle said in his decision.

WHAT’S HAPPENED SINCE

About a month after Wolle dismissed the case, Mediacom appealed the federal judge’s decision to the 8th Circuit Court of Appeals. It asked the court to reverse the ruling and order a trial. Iowa City and ImOn want the court to uphold the prior decision.

All three parties filed arguments late last year. The Iowa League of Cities filed a brief in support of Iowa City, while Charter Communications filed one backing Mediacom.

Almost no action was taken from February until mid-September.

On Sept. 15, though, the case was placed on the calendar for a hearing. A three-member panel of judges will hear the case Oct. 19 in St. Paul, Minn.

The arguments from both sides focus on when service providers need a franchise agreement: Should it be before they begin to offer cable TV service, such as when they are placing fiber-optic cable, or not until they actually start to offer it?

Mediacom has argued its competitor should be required to have a franchise now since ImOn had previously said it someday intends to provide cable TV service in that market. If ImOn was given that franchise, Mediacom could apply for a state-level franchise and not pay fees to Iowa City, the company argues.

“Mediacom recognized that ImOn intended to provide cable service in Iowa City and was in fact constructing a cable system in the City,” Mediacom wrote in its appeals court filings. “But because ImOn and Iowa City had not taken the legally required steps to award ImOn a proper cable franchise, Mediacom was unable to exercise its right to switch to a state certificate of franchise.”

The city and ImOn, however, say the franchise agreement is not required until ImOn guarantees it will begin to sell that service.

“Even assuming … that the infrastructure ImOn is currently constructing is sufficient, without more, to provide cable services in Iowa City, ImOn still is not required as a matter of law to enter into a cable franchise while it builds out its infrastructure and before it actually provides cable services in Iowa City,” the city argues.

l Comments: (319) 398-8366; matthew.patane@thegazette.com

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