Cable company rep says law needed to cut city utilities’ cable advantage

The cable industry’s clamoring for a bill that would place new limits on what they say is unfair competition from city-owned cable t.v. systems. The bill would require Iowa cities and counties to pay taxes on the property and power lines used to deliver cable or Internet services. The bill also forbids municipal utilities from taking revenue from electric or gas accounts to finance the cable side of their business. Tom Graves, the executive vice president of the Iowa Cable and Telecommunications Association, says municipally-owned cable companies are offering lower rates than companies like Mediacom because the cost of running a city-owned cable system is spread to the city’s gas and electric customers. Graves says cities are using profits from the electric and gas side of their utility business to pay for the expensive digital cable lines, while private cable companies have to borrow money to install digital lines and pass the cost along to subscribers, giving them an unfair advantage. But Betty Zemen, the marketing manager at Cedar Falls Utilities, says the cable industry’s just trying to drive out competition. She says citizens voted for the municipal systems to get more choices and to provide competition that lowers the cost of cable t-v. About 30 Iowa communities have a municpally-owned cable system, and all oppose the bill. She says it would pose great harm to communities that’ve already invested millions in the infrastructure to supple cable to their residents. The bill is scheduled for debate this week in the Iowa Senate.