Governor Terry Branstad says if the Iowa Communications Network is to be sold, the bids must be about 18 times greater than the bids that were submitted recently.
Branstad has rejected two bids to buy the state-owned fiber optic system — one for about $16 million in cash, the other for less than $13 million.
“I think it’s got to be more in line with the kind of investment the state has made in this,” Branstad says.
The state and federal governments have spent $280 million on the system since 1990.
“It’s a valuable asset,” says Branstad, who has been one of the ICN’s most stalwart supporters. “I think everybody would tell you that fiber optics and the capacity it has is very significant.”
The system provides data and telephone service for state government in addition to the “distance learning” classrooms in every Iowa school, community college and many public libraries. Over the past two decades some Republican legislators have called for its sale and the legislature recently set up a process to solicit bids for the sale or lease of the system. Only one company — Iowa Network Services — submitted bids and Branstad thinks the process will silence the critics in the legislature.
“Their curiosity as to what we could get for it on the market is that well we really didn’t get a bid that we think is competitive and consequently it makes more sense for the state to retain this important asset,” Branstad says.
Critics say the network is unfair state government competition with the private sector and argue that the state is now saddled with a system that requires a significant amount of upkeep. In making its bid for the ICN, Iowa Network Services estimated the network loses $36 million a year. State officials deny the network operates in the red.
(Reporting in Algona by Joe Hall-Reppen of KGLA Radio; additional reporting by Radio Iowa’s O. Kay Henderson)