Voters in 29 Iowa cities will decide today (Tuesday) whether their city can establish a city-owned utility to provide telecommunications services. The debate pits Teleconnect and McLeodUSA founder Clark McLeod — who hopes to enter into public/private partnerships with the cities — against industry giants like Qwest and Mediacom.
Still other backers of the referendums say their towns don’t have the highest-speed Internet connections and it’s time for residents to join together in a city-owned utility to get them. Bob Haug of the Iowa Association of Municipal Utilities says the free market isn’t working in Iowa and cities have a right to provide the service. Haug says federal and state policy is based on the assumption that there will be “robust competition” among the companies that provide telecommunications services.
But Haug says in rural states like Iowa, here’s “virtually no competition.” Opponents, calling themselves, the Project Taxpayer Protection Campaign, argue taxpayers will be left holding the bag if a city establishes a telecom utility.
Former State Auditor Richard Johnson says you need look no further than the expensive and aging state-owned fiber optics system to see that government can’t run a telecommunications utility. “Government is actually competing with private enterprise in every one of these situations,” Johnson says. Johnson, a Republican from Sheldahl, says governments can’t keep up with the upkeep on a telecommunications system.
“The movement of telecommunications is so rapid and changing that it puts taxpayers at a tremendous risk,” Johnson says.
Haug disputes that. Haug says city councilmen and women are not going to “squander the taxpayers’ money on an unneeded system.” Johnson doesn’t buy the argument that cities need to provide high-speed connections to residents because the big telecoms won’t. “Why not work with the private providers, sit down and find out how they can work as a private/public partnership in solving some of the concerns that they have rather than competing head-on with private enterprise?” Johnson asks.
Johnson says establishing a city-owned telecommunications utility will prompt competitors that might offer a less-expensive alternative to stay out of the market. Records filed with state election officials show the “Project Taxpayer Protection Campaign” amassed at least one-and-a-half million dollars to fight the referendums.
Haug — from the Iowa Association of Municipal Utilities — says that’s telling. “You can tell how valuable their monopolies are…and what they’re willing to say to protect them,” Haug says. Haug says the Iowa Association of Municipal Utilities got involved in the fight because of what opponents of the referendums were saying about already-existing telecom utilities.
Voters in 51 Iowa cities have already endorsed the idea of a municipally-run telecommunications utility in their town and 25 have been built. Referendums will be held Tuesday in Ackley, Altoona, Anamosa, Asbury, Carlisle, Charles City, Cresco, Dubuque, Dunlap, Glenwood, Hamburg, Hampton, Hiawatha, Hudson, Iowa Falls, Lansing, Lenox, Manchester, Maquoketa, Marion, Mason City, Nevada, Norwalk, Parkersburg, Sidney, Vinton, Waukon, Waterloo and West Union.