Once Again, Telco Told That It Can't Stop Muni Fiber

from the how-dare-they-want-competition dept

Fri, Oct 10th 2008 4:11pm — Mike Masnick

Telco monopolists really are amazing sometimes. For years, we've been seeing them abuse their monopolies, offer poor (and expensive) service thanks to a lack of competition -- and then freak out, when they're actually challenged in the marketplace. And, of course, nothing gets them more worked up than the threat of some sort of "municipal" competitor. Time and time again, they go to court to block any muni-fiber offering, and time and time again they lose. The latest is TDS Telecom having its case dismissed in Monticello, Minnesota, where voters have approved a bond issue to set up a municipal fiber network. Such networks have been tremendously successful elsewhere.

TDS, of course, claims that it should be illegal for the government to compete with them, but they leave out many of the details. First, they have no real competition, because the government granted them a monopoly. So they're already in many ways the beneficiary of a gov't program. To claim that no one else can benefit from the gov't is simply anti-competitive and ignores the monopoly they themselves received. Second, since this is a bond issue, there's no taxpayer money at issue -- and the citizens of the town approved it. Finally, perhaps if TDS didn't rest on its monopoly laurels, it wouldn't now be facing competition. All this has made clear was that TDS failed to deliver what the town wanted, so the town got together and came up with a solution. Good for them.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: minnesota, monticello, muni fiber
Companies: tds

17 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 10 Oct 2008 @ 4:52pm

Wish Seattle would get some fiber. Tilec here is Qwest, the shittiest telco company in the US who is putting in FTTN. When? No fucking clue. How fast? No fucking clue. How much? Probably too expensive.
[ link to this | view in thread ]
Lucretious, 10 Oct 2008 @ 5:11pm

Here in RI they were talking about border-to-border broadband but that was a couple of years ago. Given the (utterly corrupt) politics of RI I'm sure someone got greased and made that idea go away for the time being.
[ link to this | view in thread ]
exitstageleft, 10 Oct 2008 @ 5:26pm

I live in Monticello, MN.
The only problem here is that TDS 'suddenly' decided to lay the fiber themselves. I have a feeling that TDS is going to rake the city over the coals if the city wants to lease the already laid cable.
We just got done repairing the front lawn from TDS digging it up. I really cannot see the city digging up the lawns again to just lay their own cable (right next to the DS fiber).
[ link to this | view in thread ]
Yankee Infidel, 10 Oct 2008 @ 5:58pm

Even when they lost, they still won
Ars had an article detailing the circumstances surrounding the aftermath of the lawsuit, and now the municipal network will be delayed for several months more while TDS has the opportunity to "compete" with the government network.

"In Mitchell's view, this was the only point of the lawsuit; even in defeat, Bridgewater has tied the project up for six months and delayed it into next year. TDS, for its part, insists to us that it simply wanted to protect taxpayers from covering an expensive system that TDS itself could operate more efficiently."

http://arstechnica.com/news.ars/post/20081009-city-owned-fiber-network-a-go-as-judg e-tosses-telco-lawsuit.html
[ link to this | view in thread ]
Dan, 10 Oct 2008 @ 6:44pm

Now the town folk get to vote with their wallets, then the issue will be resolved.
[ link to this | view in thread ]
Anonymous Coward, 10 Oct 2008 @ 7:11pm

"All this has made clear was that TDS failed to deliver what the town wanted, so the town got together and came up with a solution. Good for them."

HUZZAH!
[ link to this | view in thread ]
Anonymous Coward, 10 Oct 2008 @ 9:13pm

Re:
[ link to this | view in thread ]
Greevar, 10 Oct 2008 @ 9:17pm

Re:
We have Qwest laying the same bullshit on us here. FTTN? WTF? We were supposed to have FTTH with speeds averaging 45Mbps today. Instead, I pay $45 a month for 1.5Mbps. The only other game in town is Comcast and I don't need to explain why I won't deal with them.
[ link to this | view in thread ]
Greevar, 10 Oct 2008 @ 9:26pm

I live in St. Paul MN
I envy your forward-thinking community, but not your circumstances. I wish more municipalities would stand up to these greedy corporate ISPs so that we all get the high speed networks we were promised when the government gave them so many tax incentives 18 years ago.
[ link to this | view in thread ]
nasch, 11 Oct 2008 @ 7:48am

No tax money?
Don't the taxpayers pay the interest on the bonds? That's much less than just funding the project directly, but it's still some tax money involved.
[ link to this | view in thread ]
Another Anonymous Coward, 11 Oct 2008 @ 1:38pm

So an article from 2003 by Lessing that mentions that Burlington is building a network becomes, in 2008, proof that such muni networks are "tremendously successful elsewhere".....

How about some links showing what the experience has been like?
[ link to this | view in thread ]
Mark Ward, 11 Oct 2008 @ 2:42pm

Power to the People in Monticello
Years ago I had phone service with 'Said' phone Company in Monticello.Month after month I took a soaking on just common household phone service. I'm not even talking about long distance either.Kuddos to the citizens of Monticello who put their foot down and voted in a fiber network. For cryin' out loud, if 'said' phone Company had their way, we'd still be living in the dark ages. I believe most people are aware of the excellant inexpensive online phone options they will be able to select from when the Monticello Fibernet is finished.Thanks again Monticello citizens and Mayor AND City Council Members!
[ link to this | view in thread ]
Ricardo, 13 Oct 2008 @ 7:21am

In France pay 30euros, around 45 usd
And I get 20mbps, tv, unlimited worldwide phonecalls. By the end of the year i'll have fiber for the same price.
[ link to this | view in thread ]
christopher (profile), 13 Oct 2008 @ 7:36am

Re: I live in St. Paul MN
There is a group of folks in St. Paul that is organizing to bring high speed fiber to St. Paul.
[ link to this | view in thread ]
Anonymous Coward, 13 Oct 2008 @ 11:44am

Re: No tax money?
no the interest is paid to the investors out of the revenue that the network will generate.
[ link to this | view in thread ]
TravisO, 13 Oct 2008 @ 12:20pm

Government owned wires = Pandora's Box
This is a Pandora's Box issue:

While I'm against the Cable & Telco monopolies in place, they're still better than government owned lines. At least when the private sector owns the lines, you can sue them for crippling or blocking service, but with government owned, they gan begin blocking and censoring all they want.

First it will begin innocently, blocking illegal porn sites and hate sites, then overseas gambling and slowly things get blocked as they see fit. Of course by then the commercial lines have gone out of business and you have nobody to turn to but your own censoring government, and guess who wins that battle?

And even if you can live in that world, the fact that the government takes away YOUR paycheck to start commercial business that competes with it's citizen's tax paying employees is dirty as well. Government has NO place in the business world, especially when they regulate it. At least in the commercial business world people are actually held accountable for running their business poorly, a government ran business can simply throw more tax money at inefficient business models and/or embezzlement.
[ link to this | view in thread ]
AGE, 30 Oct 2008 @ 1:07pm

Re: Re: No tax money?
No. The interest gets paid to the folks who buy the bonds that float the funds to build the network. This interest comes from the ability of the fine folks of the Municipality to pay their property taxes. Revenue generated from the sale of services will go to operate the highly expensive equipment to provide the services that are demanded.

Here is where it becomes very tricky... In 18 short months, the City of Monticello will be faced with a great dilemma. What happens when the customer wants "more?" You want to provide video over the network? Well, there are a variety of ways to do this and all are going to start at over $1 million for basic infrastructure. Maybe deliver "redistributed" content? Well, that will be only a small fraction of what is available -- less than basic cable and will be very complex in what is allowed, what is not, and at what cost (ESPN will charge over $3 for every home passed... not served).

What the City is giving is Internet access at fast speeds, not services. Wholesale services will cost money, are complex, and require great deal of capital to buy with a limited and confined customer base. It all looks good on paper and will give everyone a headache in two years.

The incumbents won't look so bad in 2011 after all.

AGE
[ link to this | view in thread ]