Wednesday, November 09, 2005

The Tide Turns; Congratulations Iowa! (and US)

Kudos and Congratulations to the people of Iowa!

And, frankly, to the people of the United States. In what is being billed by local press as a split decision, the people of Iowa pretty firmly rejected an expensive media misinformation campaign financed by Iowa's out of state incumbent telecom companies. A majority of the 32 municipalities with a telecom utility on the ballot passed the measure. Further, the majority of those municipalities that voted it down (according to the Register article cited above) had as their phone company a local business with a clear history of aggressive roll-outs of new services in rural areas. The firm, Iowa Telecom, that seems to be an Iowa version of our own EATEL who is current providing fiber connective in Ascension Parish. In the vast majority of places where the choice was not complicated by a worthy local firm the incumbents were defeated and the concept of a local-owned utility won. From the story:
Residents of 32 Iowa communities delivered a split verdict Tuesday on whether their cities should seek a role offering cable television, Internet and other telecommunications services.
Totals showed 17 communities passed the measures to form communications utilities and 15 defeated them. In the Des Moines metro area, proposals failed in Altoona, Carlisle, Norwalk and Windsor Heights.

Elsewhere, cities including Dubuque and Mason City passed the proposals easily.

The proposal was defeated in Nevada and six other communities served by telephone company Iowa Telecom.
Go Iowa. I hearby signup as an honorary cornhusker...even if I have always thought that the country's oddest mascot. Iowans are not bound by this vote to build telecom utilities, but they are freed to do so if further study demonstrates to local people's satisfaction that they should.

The Money Angle:
Lafayette proved that municipalities could win and could even back down an aggressive incumbent misinformation campaign if they ran a similarly aggressive campaign that focused on monopoly power and local control. The people of Iowa have demonstrated that a campaign based on local services and local self-determination can win even if the incumbents contest the referenda vigorously and toss the entire weight of their money and media control against the local initiatives. From a Sioux City Journal article on the day before the election:
More than $1.4 million has been spent on an advertising campaign designed to defeat city-owned telecommunications issues on the ballots in about 30 cities on Tuesday.

Most of the money, donated to the nonprofit Project Taxpayer Protection Campaign, has come from New York-based cable television company Mediacom Communications Corp., according to documents filed with the Iowa Ethics & Campaign Disclosure Board.

In addition to contributing $805,000 in cash to the campaign, Mediacom donated 16,366 commercials on 25 cable television networks. The 30-second spots were valued at $409,150, the documents said. The campaign documents were released by the board on Monday.

Separate filings indicate that Denver-based telephone company Qwest Communications Inc. has spent $94,494 to oppose the city-owned telecommunications systems.
Be aware that the cable company's "in kind" donation probably cost them next to nothing in real money; it is quite possible that they gave up no paying customers to blitz the people of Iowa with ads. It likely came out of the house ad and Public Service Announcement budgets. Their monopoly position in the cable market gives them astonishingly unfair power in such battles while cities and towns typically fight with one hand tied behind their back by legal restrictions.

The Significance:
I suspect that the Lafayette and Iowa victories herald a turning tide on the issue of local telecommunications utilities in this country. They prove that an adequately determined and funded campaign can, in the best instance, force the incumbents to back off and, in the worst instance, defeat them in a open brawl. Even in the case where the locals cannot nearly match the expenditures of the incumbents--or their penchant for indulging in blatant misinformation--a clear campaign based on local values and local control can win over big bucks and media control. It is a good day for the country.

It's interesting to me that Iowa is another of those places, like Lafayette and Provo, Utah, that have decided to spend real money on real, fiber-based broadband in defiance of incumbent power. All three of these places have a pretty strong history of localism. Iowa's sturdy caucus system wields inordinate power on the national stage. Utah's Mormonism and Lafayette's French and Creole heritages also set them apart. More interesting still is that these communities regard themselves as conservative, albeit a type of conservative that favors community, not, on the basis of the evidence, corporate privilege; a distinction often lost in the national debate. A recent, pretty unreliable, survey had Provo listed as the nation's most conservative city; Lafayette was number nine. You have to wonder if a defiant localism didn't power both the cities' resistance to incumbent power and their "conservative" stance on national politics. It makes a sort of sense if you think that a significant part of the voting population is not so much conservative or liberal in the ideological sense but desirous, mostly, of being left alone by the powers that be.

Of course, as is the case in Louisiana, this won't be the end of the matter for Iowa. You can expect, if Lafayette's experience is a guide, that lawsuits designed mostly to impose delay and expense on the small new competitors will be a feature of the next few years. Iowa turned back a state bill designed to outlaw municipal self-determination in this matter recently. Clearly the regional coalition that hopes to put together a strong framework similar to Utah's Utopia in Iowa is clearly worried about another attempt to buy the legislature. From the Register:
OpportunityIowa's Daley said the group has served its purpose of raising awareness of municipal communications and will now disband. But Daley said he hopes the votes are lessons to lawmakers that the issue should be decided by each community. 'Citizens are capable of deciding for themselves what's in their best interest,' Daley said."
You don't suppose Daley would be available to address the Louisiana legislature do you?


Lagniappe:

You might recall that Lafayette Coming Together sponsored a community breakfast during the campaign that featured a speaker on the benefits of Cedar Rapids' telecom utility that touted the advantages for development by contrasting Cedar Rapids and Waterloo--side by side cities that were evenly matched before Cedar Rapids jumped ahead by installing its own municipal system that attracted new investment and jobs. Part of that presentation included remarks by Waterloo's mayor that Waterloo had missed the boat and needed a fiber optic system to compete.

Apparently the people of Waterloo, Iowa think so too. They voted Yes!: Waterloo votes 'yes" to telecom utility study.

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