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Affiliated with the Local History Network of the State Historical Society of Iowa, and the Iowa Museum Association.




MEDIACOM

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MEDIACOM. Mediacom Communications Corporation is the USA's fifth largest cable television provider based on the number of video subscribers, and among the leading cable operators focused on serving smaller cities and towns. The company has a significant concentration of customers in the Midwest and Southeast, and is the largest broadband provider in Iowa. Founded in 1995 by Rocco B. Commisso, the current owner of the New York Cosmos and ACF Fiorentina. Mediacom is headquartered in New York and incorporated in Delaware. Formerly a publicly traded firm, it went private in a $600 million transaction in March 2011 and is owned solely by Commisso as of 2011. (1)

Mediacom offers service in 22 states. About 55% of Mediacom's subscription base is in the 60th through 100th ranked television markets. It is the largest cable company in Iowa and second largest in Illinois. (2)

In reporting its results for the fourth quarter and full year 2016, Mediacom described itself as the 5th largest U.S. cable company, with 1,363,000 customer relationships at the end of 2019. In February 2017, Multichannel News reported that Mediacom was the 9th largest multichannel video programming distributor in the U.S. with 828,000 video customers. Of 2,800,000 "homes passed" (places where Mediacom service can be ordered), 44% of have subscribed to basic cable with Mediacom, and 27.8% have subscribed to Mediacom Internet service. Of homes with basic cable, 54.8% also have "digital cable" service. Counting basic cable, digital cable, high-speed data, and cable telephony as separate revenue, Mediacom had 2,981,000 revenue generating units (RGUs) at the end of 2009. 52% of customers had at least two of video, Internet, and phone from Mediacom, and 18% had all three; over the previous five years, video decreased from 80% of Mediacom's revenue to 64%. (3)

At the end of 2016, Mediacom announced it would become the first major U.S. cable company to fully transition to the DOCSIS 3.1 platform, a new generation of broadband technology. In January 2017, Mediacom launched 1 Gbit/s internet service across its entire Iowa footprint and as a result, all of the nearly 1 million households in the more than 300 Iowa communities passed by Mediacom’s Iowa network now have access to download speeds that are up to 40 times faster than the minimum broadband definition set by the FCC. (4)

As a result of the 1 Gbit initiative, Iowa secured the top ranking in the U.S. News Best States Overall Ranking powered by McKinsey & Company. Iowa’s #1 ranking in the Infrastructure category propelled Iowa to the top of the U.S. News Best States rankings. Specifically, U.S. News found that more Iowa households have access to high-speed broadband internet of at least 1 gigabit per second than any other state in the country. According to Mediacom’s website, the 1gig service is available to most communities where Mediacom offers internet service. (5)

The Des Moines Business Record in its 2012 Best of Des Moines issue gave Mediacom the top award for Best Local Internet Service Provider and Best Company Use of Social Media. (6)

As reported in the Chicago Tribune, July 19, 2012, in July 2012, Mediacom was named by the FCC as one of the nation’s top 4 Internet service providers when it comes to delivering advertised speeds to consumers. (7)

Mediacom broadcast local sports programming on its Connections channel, MC22, along with a simulcast of ESPNEWS. Other sports channels on the Mediacom lineup as of September 2015 include NFL Network, Big Ten Network, SEC Network and the national feed of the YES Network. Mediacom does not carry NHL Network, MLB Network or NBA TV. Mediacom made low-cost plans available by participating in the Connect2Compete program via the nonprofit group EveryoneOn. This program offers cost assistance for wired home Internet access to Mediacom footprint residents who have school-aged children in the K–12 range. The purpose of this program is to provide online access to children for educational purposes and to help close the digital divide, a key issue receiving attention from the FCC in 2019. (8)

According to a report published February 20, 2020, Mediacom's revenues were $2,031.2 million for the year ended December 31, 2019. This reflected a 3.8% increase from the prior year period. Additionally, OIBDA or "operating income before depreciation and amortization" for the same period was $806.4 million, which had a 8.5% increase from the previous year period. Free cash flow during the same period also saw an increase by 31.1%. This positive cash flow was $418.9 million. (9)

Mediacom’s Molli was named the 2019 winner in the category of artificial intelligence (AI) and machine learning at Cablefax's Technology Awards. Mediacom is believed to be the first telecommunication company to create an AI-based system fully integrated with customer service functions. Customers interact with the virtual assistant via SMS text. (10) In 2016, Mediacom Communications was named the Nation's Top Communications Provider by the leading industry publication CableFax. TMT Magazine awarded Mediacom Communications the 2018 Telecoms Award for Best Cable Operator & ISP in the USA. (10)

Despite its awards, Mediacom developed a poor image among many of its customers. The February 2010 issue of Consumer Reports ranked Mediacom 15th of 16 in TV service, 24th of 27 in Internet service, and last of 23 in phone service, based on surveys. (11) The deepening of this trend was affirmed in the June 2012 issue of Consumer Reports, in which Mediacom was poorly ranked regarding TV service, phone service and bundled telecom services, and the third worst ISP only above the two satellite internet companies Wild Blue and Hughes Net. In a survey conducted by Consumer Reports magazine in 2012, Mediacom was the worst cable provider in the country according to the 50,000 people polled. The September 28, 2012 edition of PC Magazine named Mediacom one of the nation’s worst 15 fastest internet service providers. Consumer Reports in 2014 ranked Mediacom telecom bundles (packages with phone, TV, and Internet) 14th among 14 providers, its television servie 17th out of 17, internet service 28th out of 29, and phone service 26th out of 26. (12) In a 2016 telecom report conducted by ACSI, Mediacom occupied last place in customer satisfaction among all companies in the ACSI, regardless of industry. (13)

Locally, Mediacom took over the Dubuque cable franchise in July, 2001 and became the fifth cable provider to the city in twenty years. In the terms of the $1.79 billion cash buyout, Mediacom purchased AT&T Broadband cable television systems serving over 700,000 basic subscribers in Georgia, Illinois, Iowa and Missouri. Mediacom also acquired AT&T Broadband's Internet service. The deal resulted in Mediacom, begun five and one-half years earlier, becoming the eighth-largest cable television company in the United States. With nearly 1.6 million basic subscribers in 23 states, the company announced its intention to begin ever-expanding operating and capital investment plans. The purchase fit well with the city's desire to have a state-of-the-art broadband network. Other city officials hoped that Mediacom would reestablish customer service that AT&T had abandoned after its purchase of Tele-Communications Inc. around 1999. (14)

In February, 2002 Mediacom's current customers would receive a one-time credit for paying past sales tax on their monthly fees. In August, 2001 state revenue officials announced that AT&T's cable internet service had been illegally collecting sales tax since 1999. An estimated $1.1 million was being refunded. Rather than have the state process thousands of refunds, Mediacom agreed to the state's proposal to give customers a credit on their cable internet bill for the extra tax collected. Customers who were no longer subscribers to Mediacom could apply for the refund by contacting the Iowa Department of Revenue. (15)

The hopes for good-will were short-lived. In June, 2002 members of the City Council requested a cheaper basic package. The 68-channel package being offered included three times as many channels as most packages offered in other Iowa communities, but cost three times as much. The interest in a cheaper package hit a peak after the company increased its rates in February by 11.5%. The council went so far as to budget $50,000 for fiscal year 2003 to study setting up a fiber-optic system. Mediacom, however, was not required to offer a cheaper package according to federal regulations which required cable services to provide access to local stations, government and educational channels. When Mediacom took over from AT&T Broadband in 2001 there was a monthly rate charged of $33.13. By January 9, 2003 Mediacom had increased its rates by $8.82. In February, 2003 Mediacom was set to increase its rate for basic cable by 14%. This meant that residents of Dubuque had seen their cable rate between 1996 and February, 2003 increase by 90.7%--more than double the national average. (16) At the same time, Mediacom was offering access to 13 channels for $12.35 per month in Mason City, 20 channels for $9.87 in Cedar Rapids, and 16 channels for $11.49 in Ames versus the $36.95 charge in Dubuque. (17)

In December, 2002 the City Council extended the contract with Mediacom for three months--the fourth extension of its kind. In February, 2004 formalized its renewal process with the company until June when the company asked for and received another six-month extension. According to Merrill E. CRAWFORD, the cable franchise administrator, acknowledged that the information the company had turned over was late, incomplete and lacking in detail. Some information was not provided at all. (18)

Mediacom entered the telephone business in 2004 through a deal with telecom provider Sprint. The deal allowed Mediacom to use its broadband technology to cut into the traditional local exchange carrier territory. Beginning in 2005, Mediacom officials announced, the company would launch Voice over Internet Protocol telephone service using its own digital network. (19)

In 2005 Mediacom officials displayed its new products to a small group of city officials and news media. These included high-definition television, video-on-demand, and digital video recorders. The company was also an staunch opponent of Opportunity Iowa legislation which would allow cities to create their own communication utility claiming such a proposal was unfair to current employees who would lose their jobs and those who had already made investments in the field locally. (20)

As part of the 15-year cable franchise agreement between the city and Mediacom, the company agreed to construct a state-of-the-art fiber-optic Institutional, or I-Net. The high-capacity system scheduled to be completed by the end of 2006 linked 77 government buildings, schools, police, firefighters, hospitals and nonprofit agencies. Mediacom paid over $2 million to lay sixty miles of fiber-optic cable with each site paying for the necessary equipment. Among the anticipated financial savings for the city and schools was using the system for telephone service. Avoiding the need to lease T1 lines would save customers between $600 to $1,000 monthly. Disaster-preparedness advantages included the fact that various locations within the net could be duplicated to allow continuity during a disaster. Training sessions for police or firefighters could be held at one location and viewed from many locations. Emergency personnel could see real-time video at the scene. (21)

In 2006 Mediacom officials announced that the company would annually contribute $25,000 to the Dubuque arts community through a plan administered by the COMMUNITY FOUNDATION OF GREATER DUBUQUE. Grant applications would be filed in mid-summer with the Mediacom Cultural Foundation announcing winners in October. Organizations applying for grants less than $2,500 would not be required to meet matching requirements. Those applying for the maximum $5,000 would have to raise a matching amount. The program was not part of the franchise agreement with the City. (22) By 2019 the program had increased to over $27,000. The same year, Mediacom officials announced that the company for the fifth year was offering $1,000 in scholarship support to fifty students living in Iowa, Illinois, Wisconsin, Minnesota, and South Dakota. (23) The number of scholarships by 2014 had risen to sixty.

An article in the Telegraph Herald in 2006 began, "Hell froze over." Mediacom and the cities it served found themselves allies when Qwest Communications and the state's independent telephone companies proposed legislation that would allow the companies to apply for a statewide telecommunication franchise instead of negotiating with each community to offer video. Opponents said the legislation would eliminate local control and regulatory oversight. Ironically after the legislation became law, this law was later used by Mediacom against the City of Dubuque. (24)

In the fall of 2006 Mediacom began the process of establishing wireless Internet service in downtown Dubuque. With the goal of having the system in operation by Christmas, Mediacom contacted businesses in becoming a partner in a system that would create "hot spots" for Internet access. Businesses were encouraged to sponsor a wireless connection point or "node" which would receive and send Internet signals and thus become a "hot spot." Business cooperating in the plan would pay an annual fee of $2,500 including 'various marketing elements.' The system was designed for outside access rather than inside the buildings. Each "node" would be maintained by Mediacom. The first area to be develped reached from the TOWN CLOCK to WASHINGTON PARK. With success it would spread to JACKSON PARK and the PORT OF DUBUQUE. (25)

Competition to Mediacom benefited from a battle of the the company with Sinclair Broadcast Group Inc., another giant of the industry. Early in January, 2007 Sinclair pulled 22 of its broadcast stations, including KGAN-TV a CBS affiliate from Cedar Rapids, from the Mediacom lineup. Sinclair wanted more money for their transmissions than Mediacom wanted to pay. To increase pressure on Mediacom, Sinclair agreed to offer rebates to DirectTV, a Mediacom competitor, to new subscribers. In February the companies settled their dispute which involved Mediacom making some payment by Mediacom to rebroadcast Sinclair stations. Mediacom officials later admitted losing about 7,000 customers which they tried to attract with rebates and free programming incentives. (26) DirectTV claimed new customer accounts rose 70% in northeast Iowa between September and December. (27)

Medacom looked to state and federal lawmakers in resolving the issue. Six Iowa state senators expressed disappointment that officials from Sinclair refused to attend a meeting with the legislature's Joint Government Oversight Committee. At the end of the month, Mediacom officials said they would be willing to settle for the same terms that Sinclair had reached with Time Warner Cable. (28)

The issue was resolved after several months, but reappeared in 2009. The issue was then called "carriage fees." Cable television operation like Mediacom claimed owners of broadcast stations and cable channels were price gouging their customers by demanding ever-rising payments. Content owners responded that cable companies made exorbitant profits by simply re-transmitting their channels. (29)

Officials from both sides expected contract disputes to be a recurrent problem. The negotiations, required every three years by federal law, were said to be outdated by the cable companies. Broadcast companies, however, claimed that the rules were working as intended. In March, 2010 a group of cable and satellite TV providers asked the Federal Communications Commission to require arbitration in contract negotiations to prevent broadcasters from blacking out signals during talks. Broadcasters replied they were only exercising their rights to seek payment. (30)

In April 2010 the cable franchise between Mediacom and the City was ended when the company used a 2007 law to seek a less-restrictive state franchise agreement which the Iowa Utilities Board granted in 2009. The city council directed the cable franchise administrator to implement three options: a legal challenge, explore the possibility of creating a municipal cable system, and negotiating a partnership with Mediacom going beyond the state requirements. Mediacom officials said at the time that the former agreement had the most "onerous" agreement with the City of Dubuque of any in the 22 states they served. It was claimed by the company that higher rates in Dubuque were directly related to what Dubuque had included in its agreement. Described by Mediacom officials in 2006 as a "marquee franchise," the contract with the city "brought on significant increases beyond the 5% franchise fee paid to the city for the use of public property. Company officials charged that cost factors like the public/governmental/educational access facilities and the I-net were unique to Dubuque compared to other cities served by the company. (31) Mediacom officials also claimed that in other cities the franchise fee was a separate item on the bill. In Dubuque, Mediacom had been required to include the franchise fee in the base rate so that consumers did not know 5% was going to the city. Officials promised the company would "re-engage" the city to create a "community partnership." (32)

Mediacom was quick in its efforts to enter the Internet revolution of television watching. In 2015 it entered into a contract with TIVO which allowed Mediacom customers to purchase "Xstream packages" allow them to view television on more devices. The company soon formed partnerships with Netflix and Hulu that improved their video and broadband customers' connection. (33)

In December 20, 2010 four of Dubuque's local-access television channels changed locations when Mediacom began transmitting those channels in a digital format. Subscribers still using analog televisions who had not obtained a digital tuner would not be able to view those channels. Mediacom officials announced that the company would be totally digital in 2011. The change was mandated by Congress since analog technology used more broadcast spectrum than digital. The rapid expansion of wireless technology had strained existing infrastructure while the change would free up space for public safety communications and make interactive video and data services which analog could not carry more accessible. (34)

The interest is creating a municipality-operated internet service, first mentioned in 2002, reappeared in 2018. A petition was presented to the council by the Campaign for Dubuque Municipal Internet asking the city to establish a municipal broadband utility. The group argued that a city-owned service would protect privacy and "net neutrality", the idea that everyone should have equal access to the internet content. David J. LYONS, sustainability consultant for the GREATER DUBUQUE DEVELOPMENT CORPORATION, explained that such an operation would need to have a market share at least as large or larger than any other carrier. Lyons further explained that to provide universal access with fiber or fiber-like connectivity would potentially cost between $30 to $40 million in first-year expenses. (35)

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Source:

1. "Mediacom," "Wikipedia" Online: https://en.wikipedia.org/wiki/Mediacom

2. Ibid.

3. Ibid.

4. Ibid.

5. Ibid.

6. Ibid.

7. Ibid.

8. Ibid.

9. Ibid.

10. Ibid.

11. Kittle, M. D., "Mediacom Ranks Low for Service, Satisfaction," Telegraph Herald, January 9, 2010, p. 1

12. Jacobson, Ben, "Mediacom Bottoms Out in Rankings," Telegraph Herald, April 5, 2014, p. 1

13. Wikipedia

14. Kittle, M. D., "Mediacom Takes Over Local Cable Franchise," Telegraph Herald, July 20, 2001, p. 3

15. Kittle, M. D. "Mediacom's Web-Customers to Get Sales Tax Credit," Telegraph Herald, February 15, 2002, p. 3

16. Coyle, Dennis, "Deregulation Fails, Study Says," Telegraph Herald, January 9, 2003, p. 1

17. Coyle, Erin, "City Eyes Local Cable Startup," Telegraph Herald, June 19, 2002, p. 1

18. "City Should Deny Mediacom's Latest Request," (newspaper editorial), Telegraph Herald, July 18, 2004, p. 16

19. "Mediacom, Sprint Team Up," Telegraph Herald, August 29, 2004, p. 16

20. Szeszycki, Emily, "Mediacom Launches PR Campaign, New Products," Telegraph Herald, March 2, 2005, p. 1

21. Kundert, Rob, "City Making Tech Leap," Telegraph Herald, May 22, 2006, p. 1

22. Voight, Sandye, "Mediacom Draws Up Arts-Grant Plan," Telegraph Herald, April 1, 2006, p. 5

23. "Mediacom Will Award $1,000 Each to 50 Seniors," Telegraph Herald, February 25, 2006, p. 27

24. Kundert, Rob, "Mediacom, Cities Become Unlikely Bedfellows," Telegraph Herald, March 24, 2006, p. 1

25. Kundert, Rob,"Mediacom Pursues Wireless Services," Telegraph Herald, Oct. 24, 2006, p. 1

26. "Mediacom Offers Deals to Come Back," Telegraph Herald, March 14, 2007, p. 18

27. Kittle, M.D., "Spat Benefits DirectTV," Telegraph Herald, January 30, 2007, p. 1

28. "Mediacom Wants Same Deal as Time Warner," Telegraph Herald, January 22, 2007, p. 9

29. "Cable Fight Could Black Out Hawks," Telegraph Herald, December 18, 2009, p. 13

30. Piper, Andy, "Cable Fight Likely Just Warming Up," Telegraph Herald, April 5, 2010, p. 1

31. Kundert, Rob, "Cable Going Up $4," Telegraph Herald, March 15, 2006, p. 1A

32. Piper, Andy, "Cable Law Too Late to Aid Dubuque," Telegraph Herald, April 1, 2010, p. 1

33. Montgomery, Jeff, "Changing Views on TV Viewing," Telegraph Herald, March 13, 2016, p. 45

34. Piper, Andy, "4 Channels Will Move, Go Digital," Telegraph Herald, December 17, 2010, p. 1

35. Hinga, Allie, "Price Tag for City Internet: $30 Million," Telegraph Herald, June 2, 2018, p. 1