Business

Mediacom won't pursue lawsuit against Iowa City, ImOn Communications

An appeals court ruled against the company this week in the two-year-old case

Mediacom says it will not follow up on a lawsuit against Cedar Rapids-based ImOn Communications or Iowa City after a U.S. Appeals Court panel ruled against it. (The Gazette)
Mediacom says it will not follow up on a lawsuit against Cedar Rapids-based ImOn Communications or Iowa City after a U.S. Appeals Court panel ruled against it. (The Gazette)

Mediacom no longer will pursue a lawsuit against Iowa City and ImOn Communications that has wound its way through the courts for more than two years.

A three-member U.S. Appeals Court panel this week upheld a district-court decision that Mediacom’s lawsuit should be dismissed.

Blooming Grove, N.Y.-based Mediacom filed the suit against Iowa City in December 2015, claiming the city had given preferential treatment to its competitor, ImOn. The city had allowed ImOn to expand its internet services there without a cable franchise agreement such as one Mediacom has.

That franchise agreement means Mediacom has to pay certain fees to Iowa City to provide its cable TV service.

“Because ImOn has not provided or proposed to provide cable services, deployment of its mixed-use, fiber-optic network does not require it to obtain a cable franchise,” the Appeals Court panel wrote in its decision, filed April 4.

Folience, The Gazette’s parent company, is an investor in Cedar Rapids-based ImOn.

New York-based Mediacom will drop the case as it plans to convert to a state-level franchise agreement in the summer, said Tom Larsen, senior vice president of government and public relations for Mediacom.

“Our franchise with the city expires in July and so we’re going to be converting to a much less onerous state franchise. That makes this case sort of moot,” Larsen said.

Iowa City Attorney Eleanor Dilkes said the city was pleased with the appeals court decision.

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Mediacom’s conversion to a state franchise will mean Iowa City needs to find a new funding source for certain public access television services. The city uses the fees Mediacom pays, which include a five percent franchise fee and other payments, to support Public Access Television, also known as PATV.

“Iowa City was and has been traditionally an incredibly expensive city for us to operate in,” Larsen said.

He added that customers in Iowa City should expect lower bills once Mediacom converts to the state franchise.

In 2017, Mediacom paid the city about $583,285 for the franchise fee, $241,242 to support PATV and about another $7,000 a month for community programming, Iowa City Media Production Services Coordinator Ty Coleman said.

The city still can expect to receive money from the franchise fee, but the other money will go away.

The company’s local franchise agreement expires Aug. 1, Coleman said.

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

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