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Paynesville Press - May 18, 2005

City to reach cable deal with Lakedale

By Bonnie Jo Hanson

The city of Paynesville expects to reach an agreement soon with Lakedale Communications for digital cable service in the city and in the 243 telephone-service area.

Lakedale CEO Gene South agreed verbally to an amended franchise agreement during a city council meeting last week. The proposed agreement - expected to be signed early this week - was a compromise between the city, Lakedale, and Mediacom, the city's and township's only current cable provider.

The public hearing - on Tuesday, May 10 - drew little public comment from the handful of local residents but extensive debate among city officials, South, a representative for Mediacom, and the city's legal counsel in the negotiations.

Todd Hartman, an attorney representing Mediacom, explained that his company did not object to competition from Lakedale, but it did object to Lakedale not having a franchise agreement. City officials have spent eight months negotiating a franchise agreement with Lakedale. Without an agreement identical to its current agreement with Mediacom, city officials feared ending up in litigation with Mediacom.

During negotiations, South argued that Lakedale could be exempted from the state statute because it would serve fewer than 1,000 customers in Paynesville.

But at last week's public hearing Hartman argued that Lakedale could not be exempted from the state statute because it had more than 1,000 customers. According to Hartman, since other cities serviced by Lakedale all work from the same signal, then all these households should be counted together. That would mean that Lakedale serviced well over 1,000 customers, even if they weren't all in Paynesville, he argued.

Instead of exempting Lakedale from the statute, Hartman urged the city to seek common ground and require Lakedale to sign an agreement. According to Hartman, if Lakedale was willing to make some concessions, including signing an agreement, then Mediacom would also be willing to compromise.

The best compromise would be to create an agreement that both parties approved, even if it meant relaxing some of the details the city felt were important when negotiating Mediacom's agreement, attorney Bob Vose, representing the city in these negotiations, told the council.

Mayor Jeff Thompson agreed. Much of Mediacom's agreement was in place to protect the city when it had only one cable provider, he said. Competition from Lakedale should ensure high-quality customer service from both companies, as unhappy customers could switch.

Besides being opposed to exempting Lakedale from the state statute, another point of concern for Mediacom was whether Lakedale would be required to pay a $15,000 fee to the city for the local cable-access channel, as Mediacom is required to do. South agreed verbally that Lakedale would pay the $15,000, at a rate of $1,000 per year.

Council members Bertram and Dennis Zimmerman, both members of the ad-hoc cable committee tasked with overseeing these negotiations, believed an agreement could be made that would please Lakedale, Mediacom, and the city, but Zimmerman was concerned that negotiations could be long and expensive, he said at Tuesday's city council meeting.

Bertram suggested that a time limit be placed on negotiations, but doing so was unnecessary, as South agreed verbally to proposed agreement with only some minor changes.

Lakedale's agreement would be for 15 years, and Lakedale would also pay the city's legal fees for negotiating the contract.

Lakedale plans to offer up to 110 digital video channels and 44 digital music channels, including the local cable-access channel. Cable service would be offered to most city residents - and township residents in the 243 telephone area - through existing phone lines. (Unfortunately, according to South, Lakedale will be unable to provide service to some homes in the Wilglo Addition now, but the company hopes to do so within a few years.)

Because most of the infrastructure is already in place, Lakedale's service could begin immediately after an agreement is signed, which should be this week, said city administrator Steve Helget.

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