News : iVinton and VMEU continue progress toward local telecommunications utility

Attorney Jim Baller reviews regulatory compliance issues

Historical trends in the cost of retransmission of broadcast channels

Ever wonder why your cable bill is so high and going higher, or why you have to purchase big bundles of channels you don’t watch?

The Iowa Association of Municipal Utilities recently held a two day broadband conference in Des Moines attended by Tom Richtsmeier, the new Vinton Municipal Electric Utility (VMEU) General Manager and Kurt Karr, representing iVinton, the citizens group working with VMEU to improve local telecommunications. At the conference Tom and Kurt learned answers to those questions and much, much more.

“We took in a lot of information in two days,” Tom says, “and I kept wishing someone could supply a glossary of acronyms and terms for us. Just the new vocabulary was overwhelming at times.”

The areas Tom and Kurt explored included customer surveys and improved performance of customer service by city staff, lessons learned by those implementing new municipal telecommunications systems, legal and regulatory issues related to start-up and operations, evaluation of telecommunications business models, the unique finance law and bonding requirements for municipal telecommunications, essentials of feasibility study design, a presentation by the CEO of the Iowa Communications Alliance regarding cooperation between municipal telecoms and rural communications companies, and a review of FCC regulation and cable service economics by the American Cable Association.

Kurt also participated as a speaker on a panel sharing ideas for successfully passing local telecommunications referendums. He was joined by a member of the citizens group from Decorah, Iowa, that recently passed a referendum and by the manager of telecommunications for Longmont, Colorado.

“I never expected the process to be quick or simple,” Karr said, “but by the time we finished with legal, financial and regulatory issues I learned that I hadn’t anticipated just how much work there would be. For example, lobbyists for the legacy communications companies inserted language in Iowa law stipulating how the interrelationship of local utilities is to be governed, prohibiting the comingling of funds. From a private business person’s point of view this creates unnecessary barriers to efficient operations or increases the complexity of financial accounting and oversight required to be optimally efficient.”

So why are cable bundles so big and why are costs so high?

In the presentation by the American Cable Association, which represents small cable companies throughout the U.S., it was explained that the content providers dictate much of what cable companies can offer. With only six companies controlling almost all cable content they have been able to require the offering of big bundles of channels and have created multiple tiers, making it necessary to get many channels to get those the consumer really wants to watch. As a result, income from cable operations for local cable companies has shrunk even as the cost of cable for their customers has significantly increased.

“A big takeaway from the meetings was that communities offer voice, data, and cable telecommunications services to improve the lives and well-being of their citizens,” says Tom, “and while operations need to be financially in the black, if the motivation is for the city to make lots of money you’re going to be disappointed. Over and over we heard that the benefits for economic development, improved health care and education, and a better overall quality of life are the goals of local municipal governments providing telecommunications services. That’s exactly what Kurt and I are interested in doing and we look forward to working with the board of VMEU, the city council, and citizens to provide those benefits for Vinton.”