Some Minneapolis residents will soon have a second option for cable TV.
City Council approves CenturyLink cable franchise in Minneapolis
Agreement with Minneapolis gives it a Twin Cities toehold to compete with Comcast.
May 16, 2015 at 1:32AM
The Minneapolis City Council voted Friday to allow CenturyLink to provide cable service as an alternative to Comcast, potentially ending decades of dominance by a single cable television company in the city.
The newly approved franchise agreement lets CenturyLink roll out initially in a limited number of households with a goal of reaching the entire city within five years. The company's Prism TV service is distributed through a fiber-optic network, offering a wireless box with a range of television apps and high-definition channels.
The Minneapolis franchise is one of several CenturyLink has set its sights on across the Twin Cities.
"It is a unique opportunity, I believe, for the city to lead many of these other communities along the way to achieve greater competition," said Council Member John Quincy, chairman of the Ways and Means Committee.
CenturyLink plans to have its cable service available to households throughout all 13 wards of the city in early June.
Under the agreement, the company must provide service to at least 15 percent of the city within the next two years. That is a step down from earlier expectations that the company would reach 30 percent of the city within that time frame. But starting next year, CenturyLink could be required to expand service further if it proves popular with customers.
At a news conference following the City Council meeting, a CenturyLink official said prices for its cable service had not yet been finalized.
"I think you'll find them to be very competitive," said Tyler Middleton, vice president of operations for CenturyLink in Minnesota. "Because we are coming on the market with zero customers, we're going to have to do something that's a compelling financial opportunity for buyers."
Competition has led to better prices for consumers in such markets as Omaha, Neb., and La Crosse, Wis., where CenturyLink is competing for cable customers.
Comcast, the largest cable provider in the Twin Cities, has a franchise agreement with Minneapolis that expires at the end of 2021. Its agreement requires the company to make its cable service available to every home in the city.
Comcast officials have argued that CenturyLink should be required to immediately provide its service citywide, like the cable giant does.
"We are disappointed that CenturyLink is not being held to the same terms and conditions as our existing agreement with the city, contrary to Minnesota state law," said Mary Beth Schubert, Comcast's vice president of corporate affairs, in a statement Friday. "We will continue to review our options in light of today's City Council vote."
Minnesota law prohibits cities from giving new franchises with conditions that are "more favorable or less burdensome" than those issued to other franchise holders. State law also has specific rules for how quickly franchise holders must build out their systems.
However, the Federal Communications Commission ruled that new entrants into a market shouldn't be forced to begin with a fully constructed system.
Low-income advocates have warned that the CenturyLink plan could mean that the company excludes the city's poorest areas in the initial rollout. But as part of the agreement, the CenturyLink rollout must include a significant number of households below the median income of the city.
Council Member Elizabeth Glidden was the only dissenting vote Friday and argued that the agreement terms didn't guarantee CenturyLink's additional build-out.
"In the end, I think that competition by itself is not enough," Glidden said.
Nicole Norfleet • 612-673-4495
Twitter: @nicolenorfleet
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