LMCC: Franchise negotiations going well

by Amanda Schwarze

The pioneer

Lake Minnetonka Communications Commission (LMCC) officials say they feel good about their negotiations with Mediacom over a new franchise agreement.

The LMCC’s 15-year agreement with Mediacom will expire at the end of the year and officials feel confident that a new one could be signed soon. LMCC Chair and Maple Plain Mayor Roger Hackbarth said that he hopes to have one in place by June. Hackbarth, LMCC Operations Manager Jim Lundberg and LMCC Productions Manager Chris Vogt all agree that the new franchise will be an improvement for their 17 member cities.

“It’s not going poorly,” Vogt said. “We’re going to get a good agreement.”

LMCC officials are in their third year of preparations for a new contract. They have hired consultants who conducted a needs and a technical assessment. They have also held meetings with elected officials and staff members of their member cities. Early on in the process officials said, their top priorities became an expanded build out of Mediacom infrastructure and improved service. Those issues, Vogt said, remain the organization’s main goals in the process.

Build out has become a hot topic for officials in some cities, especially in those that LMCC research has shown are under served by Mediacom. Out of the 17 cities in the organization, the cities of Independence, Medina, Minnetrista, Orono and Victoria are considered under served. Elected officials in those areas have said their residents are in need of access to broadband Internet services. Some cities have begun investigating the possibility of leaving the LMCC to create their own agreement with Mediacom in hopes of accelerating the process. Of those, Medina seems to have taken the most steps toward withdrawing from the organization.

Lundberg said that as of April 30, no city had sent the LMCC a letter of intent to leave and that the organization is still representing and acting on behalf of all of its 17 member cities. He said people have questioned why the LMCC hasn’t tried to make Mediacom expand their infrastructure earlier. The LMCC, Lundberg explained, could only hold the company to the terms laid out in the franchise agreement. The current agreement requires Mediacom to build out cable infrastructure in areas where there is a density of at least 30 homes per linear mile. That has left the less populated areas without access to Mediacom services. Hackbarth said that Mediacom officials could have decided to expand their infrastructure beyond what was listed in the agreement, but that the LMCC could not force them to take that action.

In the new agreement, officials are seeking to cut the density requirement in half so Mediacom would build out infrastructure in areas where there is at least 15 homes per linear mile. They also are looking at coming up with a separate requirement for some areas where a per linear mile benchmark doesn’t work well.

Lundberg said that he’s heard that Mediacom officials are proposing that individual cities that leave the LMCC will have to participate to some extent in a cost share agreement for an expanded build out. Mediacom cable subscribers pay a franchise fee. Those funds now go to the LMCC, but if a city were to leave the organization the fees would go to the city. Lundberg said that a city would likely pay some of those fees back to Mediacom to help fund the build out.

Lundberg and Vogt both said that LMCC officials feel strongly that Mediacom should be solely responsible for paying for its infrastructure. The pair said that infrastructure will help the company gain subscribers and make money.

“We’re not seeing that type of agreement anywhere else,” Vogt said of the proposal for cities to help fund the build out.

Lundberg also said that the main concern of under served cities is to offer all residents access to broadband Internet. The franchise fees that could be used to help build the infrastructure, though, only come from cable subscriptions. Lundberg said that the franchise agreements only cover cable services even though cable companies use their infrastructure to also offer Internet and phone services. The franchise fees just come out of the cable television subscriptions, so someone who only pays for Internet or phone services through the company does not contribute to the franchise fees that could help fund an infrastructure build out.

LMCC officials said they understand that residents are eager to have access to Internet, but Vogt said that they’re asking city officials to wait until the LMCC and Mediacom have agreed to a new franchise agreement before deciding to leave the organization.

“Why not wait to see what we have to offer,” Lundberg said.

The pair also said that city officials should consider the kinds of services their residents will not have access to if they withdraw from the LMCC. Vogt said that last year the organization produced more than 800 television programs, including the taped government meetings, school activities and sports, election coverage, local festival coverage and high school graduation ceremonies. Lundberg said that if a city is not a member of the organization, its residents will not have access to the LMCC channels that air that programming.

Hackbarth, Lundberg and Vogt also said that LMCC officials help with subscribers who are having problems with Mediacom. People in member cities who don’t get the kind of resolution from Mediacom representatives that they wanted can then go to the LMCC for help, Vogt said.

Vogt also said that the organization offers video production classes and experience for free to residents of member cities. That too, would not be available for those who live in cities that are not members.

“If a city ends up going down that road [of leaving the LMCC], I’m afraid they won’t realize what they’ve got until it’s gone,” he said.

Hackbarth said that regardless of what city officials may have said in the past about a desire to leave the organization, the LMCC still would like to have them remain as members.

“We’ve left the door open,” he said.

 

Contact Amanda Schwarze at amanda.schwarze@ecm-inc.com

 
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