MYTH: City-owned communications systems are like mini-ICN's

FACT: City-owned communications utilities serve different purposes than the ICN.

The cover of one of the color brochures mailed by “Project Taxpayer Protection” to residents of cities that will vote on municipal telecommunications asks “Used the ICN Recently?” Inside is an outrageous attack on the state-owned Iowa Communications Network (ICN) – a fiber optic network consisting of over 3,400 miles of state owned fiber optic cable and over 3,500 of fiber leased from private telecommunications and cable companies. The purpose of the brochure is obvious – to claim that the ICN is a failed system and to describe community-owned networks as mini-ICNs. Besides being dishonest and misleading, to any fair observer of the state legislative process, the brochure is also ironic. If the ICN is not all it could be, its shortcomings are in no small measure attributable to the lobbying efforts of private cable and phone companies that attempt to block any legislation that would make the ICN a more valuable tool for Iowa’s citizens. The private companies are worried about protecting their profits.

It is not IAMU’s mission to defend the ICN, but as with other materials used by Project Taxpayer Protection, the attack on the ICN starts with false information, then reaches for an absurd conclusion. First, consider the false information:

False Charge: The brochure says “they said it (the ICN) would only cost the state $20 million. Today we know it has cost Iowa taxpayers over $400 million.”
Fact: According to a spokesperson for the ICN, the state has invested just over $231 million in the network.
Parts I and II Construction (COPS) $114.5 million
Part I and II Finance Costs $64.2 million
Part III Construction Costs $35.9 million
Network Upgrade $12.7 million
Federal Construction $4.0 million

False Charge: The ICN “has given taxpayers little other than a mountain of debt.”
Fact: According to a spokesperson for the ICN, as of March 2005 the ICN is owned by the state debt-free and the network no longer requests General Fund appropriations to subsidize K-12 video rates. Annually over 55% of the ICN’s expenditures are used to purchase products from private providers that are repackaged and sold to ICN customers.

False Charge: The brochure says “the ICN was formed in 1991 to compete with the private sector…”
Fact: The ICN was not formed to compete with the private sector, but to provide services to the state, schools, libraries, medical facilities, and some units of local government that were not available from the private sector at that time. Those services are still not available from the private sector in many areas of the state and certainly not at costs comparable to those achieved by the ICN.

False Charge: Without evidence, the brochure claims that “Iowans are running away from the network (ICN) in droves, and many universities think the system is old and useless.”
Fact: The value of the ICN is in the fiber. The state currently owns over 3,400 miles of fiber making up the network’s backbone with over 3,500 miles leased from private telecommunications and cable companies for connections from the backbone to schools and libraries. The fiber network is used to deliver a number of services using various technologies. ICN not only provides the very visible full motion video services to over 770 classrooms statewide, but either directly or through AEAs provides high speed Internet services to over 60% of the public school districts in the state. Additionally, the ICN is the local phone company for state government in Des Moines as well as a long distance telephone provider for education and government.

The ICNs fiber network reaches all the way to the user. By contrast, services of private phone companies still reach customers over copper networks – the same kind of delivery system that was used over 100 years ago. If the private phone companies choose to deny the nearly limitless ability of fiber networks to grow with new technology to light them, then they should admit the shortcomings of their own networks, which are far less robust.

False Charge: Municipal telecommunications utilities are “mini-ICNs.”
Fact: The ICN and municipally-owned telecommunications utilities serve different purposes. Users of the ICN are strictly limited to the state, the federal government, and certain local government functions. Given the lobbying power of the private phone and cable companies, the state is not likely to expand the number of eligible users. The ICN does not provide service to business, industry, or private citizens. By contrast, municipal telecommunications utilities provide competitive services to the public where citizens are not satisfied with the rates or quality of service provided by private monopolies.