MCC Iowa, which is a subsidiary of Mediacom Communications, has filed a lawsuit against the City of West Des Moines and its city council.
MCC's petition of declaratory judgment alleges the West Des Moines City Council improperly used taxpayer-based financing bonds that were intended for urban blight and poverty projects to build a $50 million city-wide conduit network for exclusive use by Google Fiber.
Filed in Iowa District Court for Polk County, the petition outlined seven specific violations of the law and requested that West Des Moines suspend activities related to the conduit network. Mediacom said it wasn't asking for compensation that would increase costs to West Des Moines taxpayers.
“We are simply asking for the West Des Moines City Council to follow the law. The facts are they made a deal out of public view, used a law intended for blighted areas to fund bonds, and took actions that will destroy marketplace competition. All of this raises costs on West Des Moines residents, reduces their choices and wastes taxpayer funds,” said Mediacom's Thomas Larsen, senior vice president, government and public relations. “We aren’t asking for any special treatment, just a fair and balanced regulatory environment that allows us to expand our network and compete for the business of West Des Moines consumers."
Mediacom said in its complaint that the West Des Moines City Council negotiated the exclusive contract with Google Fiber in secret and that council falsely claimed the conduit would be open to other ISPs in the city.
Other points from Mediacom's complaint included:
• Unlawfully declaring the entire City of West Des Moines an “urban renewal area” under the Iowa Urban Renewal Law and classifying the conduit network as an “urban renewal project.”
• Using the Urban Renewal Law to authorize the issuance of $42.8 million in taxpayer-backed bonds with minimal oversight and input from voters.
• Utilizing city resources to undertake a marketing campaign encouraging residents to connect to the conduit network and use Google Fiber’s services while falsely promising residents will have a choice of providers.
• Failing to solicit competitive bids for the parts of the construction process that Google Fiber is performing, which is required by Iowa law.
• When the City Council approved the agreement with Google Fiber, Google’s primary statewide lobbyist was a member of the West Des Moines City Council.
FierceTelecom called West Des Moines Mayor Steve Gaer for comment on Mediacom's complaint, but didn't hear back from him by this morning's deadline. Mediacom said it has provided broadband internet service in West Des Moines for two decades. Mediacom employs 400 people in West Des Moines and pays approximately $275,000 per year in franchise fees to the city.