Fiber-optic companies put Iowa City in expansion sights

IOWA CITY - Two fiber-optic companies are considering expanding television, Internet and phone offerings into Iowa City - moves that would mean more competition for Mediacom.

In March, crews for Metronet Technologies were dispatched to neighborhoods to conduct field engineering and survey utility easements as the Indiana company looks to expand in the Midwest. Next week, crews from ImOn Communications from Cedar Rapids will do much the same thing.

'From our standpoint we have at least two, maybe more, telecommunications providers evaluating our market,” said Geoff Fruin, assistant to the city manager. 'That seems to indicate to us that there's some perceived demand here for services and we hope that one or more of these companies does decide to come here. I do think competition would be good for our businesses and our residents.”

Crews working for ImOn will be conducting the field surveys in Iowa City neighborhoods from Monday through May 6.

The company already owns one fiber route from Cedar Rapids to Iowa City and is in the process of finishing a second, said ImOn President and CEO Patrice Carroll.

The field survey will help the company determine the feasibility of expanding services, and how extensively, in the Iowa City market.

'I think Iowa City would benefit from competition and we know there is a need down there,” Carroll said. 'Competition is a good thing. It raises the bar on all of us and we are certainly aware of who provides services to Iowa City today.”

Earlier this year, Metronet said it was interested in expanding beyond the more than 12 communities it already services in Indiana and sent crews to Iowa City to take a look.

Any decision by ImOn, whose investors include The Gazette Company, or Metronet to expand into Iowa City would require a significant financial investment for infrastructure. It also would require signing a local or state franchise agreement, which compensates the city for the company's use of public rights of way.

Currently, Mediacom, which has been operating statewide since 2001, is the only provider with a franchise agreement with Iowa City.

Other companies have entered the local market in previous years including Iowa City's CenturyLink, offering Internet, phone and DIRECTTV packages, and South Slope Cooperative Communications, which primarily serves communities surrounding North Liberty.

Phyllis Peters, Mediacom's communications director, said more competition doesn't necessarily mean reduced rates as telecommunication distribution companies - such as Mediacom or ImOn - must adjust rates based on prices set by content providers like ESPN or TBS.

'What locks our pricing at ever-increasing amounts is what the owners of the content charge us to deliver that content,” Peters said. 'All of us are distributors. We're at the mercy of ever-escalating prices, as opposed to what a lot of main street competition deals with as far as lowering the price to keep up with the store down the road.”

Peters said innovations to customer service or adding bundle packages are more common ways for companies to distinguish themselves.

'We do that because we're in a competitive market and customers have all these other choices and they do like to look around at where the grass is greener,” she said.

In the end, the city's Fruin said more options only benefit residents.

'I would suspect if another provider entered the market, you would see all of the providers sharpen their pencils and look to position themselves as the premier choice for residents and businesses,” he said.

l Comments: (319) 339-3175; mitchell.schmidt@thegazette.com