Minneapolis has taken a big step toward becoming a city with two cable TV providers.
Members of the City Council's Ways and Means Committee on Monday recommended allowing CenturyLink to compete with Comcast for customers.
Council members who voted for the new cable franchise say they hope competition between the two companies will mean better service and lower prices for subscribers. But it's not a done deal just yet.
Under a five-year franchise agreement, CenturyLink will make the service available to at least 15 percent of city households in the first two years. However, if CenturyLink succeeds in signing up a certain percentage of eligible households as customers, it will have to increase its minimum coverage area by another 15 percent.
Council Member Andrew Johnson said he would rather see CenturyLink agree to a more expansive initial coverage area.
"I am a little disappointed that we started at a 30 percent rollout," he said.
Tyler Middleton, CenturyLink's vice president of operations, said the company needs to gradually add customers because expanding the company's existing phone and Internet system to include cable television is expensive.
"That's why the language is all built around market success," Middleton said. "So that as we make the investments, we start enabling households and as we have success in the marketplace then that fuels continued investments and broader enablement."
Under terms of the franchise agreement, the initial cable coverage will have to include households in every ward and include a "significant number"of lower-income households.
Comcast officials have said all competitors should play by the same rules and be required to cover the whole city. Comcast spokesperson Mary Beth Schubert said the agreement raises several concerns.
"So we continue to review the proposed franchise agreement with the city of Minneapolis to ensure that it does comply with state requirements that all residents have equal access to the same competitive offerings," she said.
Schubert declined to comment on whether Comcast will take legal action.
Ways and Means Committee Chair John Quincy said the agreement includes protection for the city just in case Comcast takes the matter to court.
"Comcast could challenge that, I'm sure," he said. "And that is part of the important element of the franchise agreement that we wanted to be indemnified from any lawsuits."
Quincy added that CenturyLink could have sued the city had it decided to reject their bid for a cable franchise. Barring any legal action, the full City Council is expected to vote on the franchise agreement next month.
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