OTHO - Otho will be without cable television service starting May 1, and it will also have fewer Internet options.
Lehigh Valley Cooperative Telephone Association, which had Otho's cable and Internet franchise, announced this month that it is no longer feasible for it to provide those services, said Otho City Clerk Glenda Rasmussen.
"We talked to Webster-Calhoun (Cooperative Telephone Association) and they're in the same boat. They can't provide us service," Rasmussen said. "We've talked to Mediacom, and we're waiting to hear back from them."
Phone and DSL Internet are still available from Frontier Communications, she said.
But the only option for TV will be satellite.
Jim Suchan, Lehigh Valley chief executive officer, said the co-op is in negotiations with a potential buyer which would provide service to Otho, but he declined to comment further. He said more information should be available within the next few weeks.
In a letter to Otho customers, Suchan said the infrastructure upgrades needed to continue serving Otho were too costly.
The company transmits its Internet and TV signal over a 100 percent fiber-optic network, Suchan wrote.
"The cost to plow fiber optics to the residents of Otho was a little over $1 million, and with only 103 TV customers and 44 Internet customers the board of directors has decided to discontinue service."
The company gave its customers 30 days notice and said it would not charge customers for the month of April.
Frontier Communications will not be going anywhere, said Greg Hinz, Frontier's general manager in Fort Dodge.
"We're going to be here for the long run," Hinz said. "We don't plan on leaving any of our exchanges, of which there are 36 that we serve in the state of Iowa."
Frontier continues to make investments in Iowa, he said, including $2.2 million in 2013.
It offers Internet speeds ranging from 1.5 to 6 megabits per second in Otho. Though it doesn't offer cable TV, the company is a licensed reseller of DISH video services and has various service bundles including DISH.
The situation in Otho is common, said Des Moines-based Mediacom Communications Director Phyllis Peters.
"I know there have been communities in Minnesota and Illinois that are similar in size to a lot of the communities we have here in Iowa," she said. "Every year, in recent years, there have been communities who ask for Mediacom to be the provider for digital cable television services and especially for high-speed Internet."
Peters didn't have any specific information regarding Otho.
Large companies like Mediacom are constantly reinvesting money in their infrastructure to keep up with the increasing demands on the network, she said.
"It's increasingly hard for smaller communities, or systems that are standalone type of systems, to keep upgrading with the technology," she said.
Tough to survive
"It's becoming a much tougher industry to survive in," said Dave Duncan.
Duncan is CEO of the Iowa Communications Alliance, which represents small cable, Internet and telecom companies. He said there are some "real threats" to small cable TV providers.
The rates cable companies have to pay for content keeps going up, he said.
"You had disputes going on around the country," he said, between content providers and cable companies, "who are unwilling or unable to pay these increased prices, or unwilling or unable to pass them on to their consumers.
"As you think about a small cable company like Lehigh Valley, or dozens of others across the state, they don't have the purchasing power of Charter or Time Warner or some of the big multi-state or national companies, so they're not able to get preferred rates for the content.
"When we talk about the content, we're talking about groups of channels. Some owners of the groups of channels have been significantly raising their rates to cable companies."
Cable access doesn't get the government attention that high-speed Internet does, Duncan said.
"You've heard about what's going on with the broadband side, to try to get more high-speed Internet out to areas that don't have that," he said. "But on the cable TV side, there are really no programs like that."
Cable TV, Internet and voice each have a different business plan, he said.
Improving broadband Internet was one of Iowa Gov. Terry Branstad's legislative priorities this year, Duncan said. He said an act may still pass this year.
The Connect Every Iowan initiative includes incentives for broadband providers to reach unserved and underserved areas. The Iowa House and Senate each have a version of the bill, but have not yet produced a final version.