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HomeMy WebLinkAbout09.24.2001COUNCIL WORK SESSION September 24, 2001 3:15 p.m. Council Chambers Members present: Mayor Rooff, Jordan, Gronen, Anders. Members absent: Krizek, Murphy, Getty, Berry. Mayor Rooff stated that he met with representatives from Cedar Falls Utilities and MidAmerican Energy and members of the Telecommunications Task Force. Mayor Rooff stated that representatives from Mediacom called him on Friday and asked to make a presentation to the council concerning their plans. Mayor Rooff stated it is very clear that businesses need this network. Jim Carey, Senior Vice President of Mediacom, stated that Mediacom wanted to tell the council what they are doing and give their plans and commitment. Mr. Carey stated that Mediacom is located in 23 states and has 1,600,000 customers. Mediacom's philosophy is to find underserved markets in small to medium size cities that the big companies don't want. Mr. Carey stated this market is the 6th largest in the country, and that Waterloo means a lot to Mediacom. Mediacom buys systems, rebuilds them and provides digital high-speed connections. Mr. Carey reported that one-third of Mediacom's business is in Iowa, with 600,000 customers. Mr. Carey stated that Mediacom is going to spend $500 million over the next five years in Iowa. Mediacom will reduce the current 150 head -ends to 15 head -ends over the next two to three years. Mr. Carey stated Mediacom has made a commitment to this area, they buy at the right price, not at exorbitant prices, which gives them head room for capital improvements. Mr. Carey stated Mediacom knows the issue is connectivity for businesses, and Mediacom will have that capability and capacity in six months and will be able to provide what businesses need. Mr. Carey stated that Mediacom is making a commitment to this community and the state of Iowa, and they are willing to put their commitment in writing. Mr. Carey stated Mediacom knows they have a reputation they have to overcome from the previous owner not delivering on what they promised. Mr. Carey stated Mediacom is well into their plans and the engineers have started this work, and the plan is to get it done in a short time. Mr. Carey stated Mediacom has no problem with competing with other providers, but the city might have more things to do with their money than spend it for things that can be provided by private companies. Mr. Carey stated Mediacom is here to provide the city with a great service and are committed to providing that service. Mayor Rooff stated that the city sent out Requests for Qualifications and AT&T did not submit a proposal. The city is in a situation where businesses in outlying areas are paying a high cost for high speed broadband communication connection. Mayor Rooff stated that the Telecommunications Task Force has done everything, and the referendum will allow voters to make a choice. Mayor Rooff noted that Mediacom did not submit a RFQ at the time they purchased the system from AT&T. Mr. Carey stated Mediacom was made aware that the city was requesting RFQs, and they wanted to respond but somehow there was a mix up in the timing and Mediacom did not get it done. There was a time issue and it got away from Mediacom. Mayor Rooff stated that if the referendum is approved and the city moves forward with the fiber optic backbone, every school and city building would be connected. The most important thing is that businesses and citizens be served. Mayor Rooff stated it is important that businesses have that connectivity and the city doesn't take a hit economically by not having this service. Good prices are important to businesses. Mr. Carey stated he doesn't see why Mediacom couldn't provide for the schools and governments. Mr. Carey stated with Mediacom the city would not have any risk with capital, Mediacom has all the risk. Mr. Carey stated Mediacom provides to all the schools in their markets, and they would put that in a written proposal and guarantee it. Mr. Carey stated there is Council Work Session September 24, 2001 Page 2 nothing they cannot provide cheaper and with less risk to the city. Mr. Carey stated they can provide the service to the businesses within six months, and Mediacom will do that regardless of the outcome of the referendum. Councilperson Anders stated that Mediacom has the right to make this announcement, and with the proper permits they can move forward, they do not need approval of the council. Councilperson Anders asked why Mediacom doesn't just make the announcement and get on with providing the services. Mr. Carey responded Mediacom just wanted to let the city know what they are doing, and that they do have a franchise and do not need approval from the council. Councilperson Anders asked if Mediacom's commitment will waiver or intensify with the result of the referendum. Mr. Carey responded that the referendum will not change Mediacom's plans. Councilperson Gronen asked if Mediacom puts the wires above or below ground. Mr. Carey responded that if the utility poles are available, Mediacom will use them. Councilperson Anders asked if Mediacom would do businesses first, and Mr. Carey responded that the citizens already have high-speed data communications. Gary Chambers, Chairperson of the Telecommunications Task Force, stated that it is estimated the entire buildout would take 18 months, but we could start connections within 30 days using fiber already installed. Mr. Carey stated Mediacom could also start right away. Councilperson Anders stated that CFU is going to offer digital and asked if Mediacom would offer digital. Mr. Carey responded that Mediacom has the same digital technology as CFU. Mr. Chambers stated that the newspaper came out harshly against the city owning the backbone, but a lot of cities are doing what Waterloo is proposing, mainly to control their destiny. Mr. Chambers stated that the citizens have seen three owners over the past few years, and Mediacom could sell out and another company could come to this community. Mr. Carey stated that Mediacom is here for the long run, and they have a long line of credit available. Mr. Carey stated if Mediacom does build a network and then sells their business, the new owners would own the network. Mr. Carey stated not many companies want to come to towns like Waterloo, but mostly go to larger cities. Mr. Chambers asked if Mediacom will do an advertising campaign against the referendum. Mr. Carey responded that the local people will want to get Mediacom's message out. Mr. Carey stated he feels the citizens will vote for the questions because of past reputation. Mr. Carey stated Mediacom just wants to say they will invest in this community and there is no need for the city to risk their money. Mr. Carey asked how many providers does this community really need. Mr. Chambers stated that the Telecommunications Task Force's proposal includes 36 fibers for the city and 12 fibers for the schools. Mr. Carey stated that he would commit to that today. Mr. Carey stated that Mediacom will be one of the best corporate citizens the city has, employees are going to join organizations and overcome the current reputation. Mayor Rooff asked if Mediacom's plans include high speed data communications. Mayor Rooff stated he currently has @Home, and while its a good product, it is not as fast as what CFU offers. Mr. Carey responded the @Home product should be as fast as CFU, if not there is some problem with the network. Councilpersons Jordan and Gronen stated they have @Home and have no problem with the speed of the product. Mayor Rooff stated that the referendum is set and cannot be stopped at this point. The city cannot promote the referendum, and Mediacom has do their own promotion. Mr. Carey stated if the referendum passes, the city will know in six months if Mediacom is performing as promised. If Mediacom does not perform, the city will still be able to do whatever they want. Mr. Carey asked the city to let Mediacom prove they are going to do what they say. Council Work Session September 24, 2001 Page 3 Richard Anthony, representing Mediacom, stated that he has 24 years of experience in telecommunications, mostly with telephone, but he has installed a number of these networks over the years. Mediacom has a great deal of fiber already in place. Mediacom is consolidating all the head -ends. Mr. Anthony stated his job will be to put together the product. Mediacom will first install high-speed broadband access between schools, businesses and hospitals. Mediacom will bring connectivity to Waterloo called Transparent Land Services connecting Waterloo into larger network areas. The next step is rolling out cable modems to businesses that want high speed access. Mr. Anthony stated Mediacom also offers long-distance service as part of its backbone, both Intra-State and Inter -State. Ultimately, Mediacom will be able to offer local dial tone service over the next few years. Mr. Anthony stated Mediacom is also looking at other services. Councilperson Anders asked where is the city at today and now what happens. Mayor Rooff stated that the city has been notified by Mediacom of their commitment, now it is up to the voters. Councilperson Jordan asked what can happen after the referendum. Mayor Rooff stated if the referendum passes, it will be up to the Utility Board to delay or move forward with the fiber optic backbone. Mr. Carey asked if Mediacom can submit something in writing. Mayor Rooff stated Mediacom needs to work with the Telecommunications Task Force, and Mediacom can submit a written commitment. Mr. Carey stated that Mediacom has a huge investment in Iowa, with one-third of its investment in Iowa. Mr. Carey stated Mediacom appreciates doing business in Waterloo and will give everythirig they promised. Mr. Chambers stated that the problem in the past has been that areas in the city did not have connectivity, and their only option was to use dial up or T1, such as at the Airport and Industrial Park. Mr. Chambers asked Mediacom if they will target those areas first, and Mr. Carey responded absolutely. Mr. Chambers stated as a Task Force they will continue promoting the referendum and let the voters make a choice. The meeting adjourned at 4:09 p.m. Nancy Eckert City Clerk