Waterloo Times

A bill in the Iowa Senate could hurt cities who are working to build their own fiber networks.

Senate Study Bill 3009, introduced by Sen. Dan Dawson of Council Bluffs will be considered by the Senate Commerce Committee. It has the backing of Media Communications.

The City of Cedar Falls is watching the legislation closely. For more than 20 years, Cedar Falls has operated a successful broadband network. Mike Litterer, director of business development for Cedar Falls Utilities, has registered opposition to the bill. The City of Decorah and Waterloo Telecommunications Utility board have also voiced concern about the proposal.

Supporters say the new regulations are necessary to prevent taxpayers who do not use the municipal communications services from having to subsidize them.

“We don’t want our electric rates subsidizing the operations of municipal telecom utilities,” Mediacom spokesman Thomas Larsen told The Courier. 

Tim Whipple, legal counsel for Iowa Association of Municipal Utilities, said the elimination of market-rate pricing would hamstring a municipal system facing a rate battle with a private service provider.

"The big incumbent providers can unfairly leverage customers in other communities (they serve) to subsidize steep discounts in a municipal utility town,” Whipple told The Courier. “If our members can’t lower their prices to compete, it’s simply not fair.”

Whipple said the proposals to limit financing options for municipalities would make it harder for communities where voters and residents have voiced strong support to start municipal utilities.