Mediacom adds ImOn to lawsuit against Iowa City

Mediacom Communications Corporation on Tuesday filed an amendment to its federal lawsuit against Iowa City to add ImOn Communications as a party.

Mediacom's original suit, filed Dec. 21 with the U.S. District Court's Southern District of Iowa, alleges that agreements the city made with Cedar Rapids-based ImOn — approved by the Iowa City Council on Nov. 10 — violate municipal and state law by requiring Mediacom to operate under a local franchise agreement. The suit claims the city has breached its contract, good faith and fair dealing with Mediacom, and put Mediacom at a competitive disadvantage by not requiring the same of ImOn.

The city's agreements with ImOn allow the company to lease excess capacity on the city's fiber-optic network and lease 120-square-feet of space in the Tower Place parking ramp for about $2,000 per year to establish a communication hub. The council in November also approved a license agreement with ImOn that allows for future expansion of its underground fiber-optic network in the public right of way as the company expands.

In Tuesday's lawsuit amendment, Mediacom, one of Iowa's largest telecommunications providers, added a civil conspiracy claim against the city and ImOn, claiming that "newly discovered facts" found in documents obtained through a public records request show that "Iowa City and ImOn conspired to allow ImOn to build out its cable infrastructure in violation of franchise laws," and that ImOn wrongfully "interfered with Mediacom's franchise agreement with the city."

According to Iowa City code, no business is allowed to install or distribute cable television services until a franchise agreement is established with the city.

In a series of emails obtained by Mediacom, then-Assistant City Manager Geoff Friun, now interim city manager, recommended ImOn as a fiber-optic Internet provider to Michal Eynon-Lynch, chief operating officer and chief educator at Iowa City-based education technology company Pear Deck.

In a Sept. 25 email from Patrice Carroll, president and CEO of ImOn Communications, to Eynon-Lynch, Carroll wrote that "ImOn is very excited to be entering the Iowa City market with our broadband, phone and cable TV services."

"Preliminarily we are targeting to bring up service late this year or early first quarter 2016," Carroll wrote.

ImOn announced in January that it had activated its fiber-optic network in Iowa City and is offering phone and Internet services to downtown businesses. ImOn officials at that time said the company had not discussed offering cable TV services, and city staff confirmed that the company would need to obtain a franchise agreement before it could offer cable TV in Iowa City. ImOn also operates in Cedar Rapids, Marion and Hiawatha.

In an Oct. 15 email, Carroll wrote to Kim Sandberg, a program assistant in the city's Public Works Department, that ImOn "intends to offer Iowa City businesses telecommunication services" under its competitive local exchange carrier status, and "will be applying for a cable TV franchise using the State of Iowa franchising process sometime next year within six months of offering residential cable TV services."

Sandberg wrote in an Oct. 30 reply that a review by her department and the City Attorney's Office determined that an "approval to install additional facilities in Iowa City was done in error, however under the circumstances we will allow the installation and have the license agreement cover the recently installed lines."

That license was approved by the council 11 days later.

Fruin said Tuesday that he could not comment on the ongoing litigation.

"Despite repeated statements by ImOn to city staff and potential customers about ImOn’s intention to offer cable services, the city and ImOn adopted a 'build first, get a legal cable franchise later' approach to ImOn’s entry into the Iowa City market," Phyllis Peters, Mediacom's communications director, wrote in an email to the Press-Citizen on Tuesday.

In its suit, Mediacom asks that the city void agreements with ImOn until the company obtains a franchise agreement per city ordinance or release Mediacom from requirements stipulated by the current local franchise agreement and allow the company to operate under a state franchise agreement.

City Attorney Eleanor Dilkes said Mediacom had sent a draft of the amended complaint to the city naming ImOn as a party and asked whether the city would agree or if Mediacom would need to seek the court's permission to make the amendment.

"The city will agree, as there's really no grounds to contest an amendment at this early stage," Dilkes said.

According to the amendment filed Tuesday, a jury trial for the lawsuit is scheduled for June 5, 2017.

Reach Andy Davis at 319-887-5404 or at aldavis@press-citizen.com, and follow him on Twitter at @BylineAndyDavis.

.