A subsidiary of cable op Mediacom Communications has tossed the book at the city of West Des Moines, Iowa, over claims the council approved a sweetheart conduit network agreement with Google Fiber that violates state law.
That subsidiary, MCC Iowa LLC, alleges that the council improperly used taxpayer-backed financing bonds "intended to remedy urban blight and poverty" to build a $50 million city-wide conduit network for the exclusive use of Google Fiber.
Mediacom claims that the city council secretly negotiated an exclusive agreement with Google Fiber for the design and use of a taxpayer-funded network that was "falsely claimed would be open and accessible to all internet service providers in the city."
The complaint also alleges that the city unlawfully declared the entire city of West Des Moines an "urban renewal area" and used a state urban renewal law to authorize the issuance of $42.8 million in taxpayer-backed bonds "with minimal oversight and input from voters."
Mediacom also alleged that the city failed to solicit competitive bids for parts of the construction process that Google Fiber is performing, while also pointing out that the city approved the agreement with the ISP when Google's primary statewide lobbyist was a member of the West Des Moines City Council.
The original agreement inked in July will make West Des Moines the first city in the state, according to The Des Moines Register. Per the agreement, Google Fiber is to pay the city $2.25 per month for each households that connects to the network, for a minimum of $4.5 million over the 20-year partnership, the paper added.
The city defended the agreement. "Reducing barriers to competition is not always supported by existing industry," it said in a statement to the Register. "Reliable and affordable internet access was identified in our Citizen Survey as the number one improvement needed in our neighborhoods, and that’s especially true today with so many working and learning from home. Local government can and should play a role in addressing this need for our residents."
"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," Thomas Larsen, Mediacom's SVP of government and public relations, said in a statement.
— Jeff Baumgartner, Senior Editor, Light Reading, special to Broadband World News