Telco Sues Municipality For Laying Their Own Fiber 408
unreceivedpacket writes "Ars Technica reports that a company called TDS Telecom is attempting to sue the town of Monticello, Minnesota for deploying their own fiber network. Shortly after the town voted to lay the fiber, TDS Telecom filed suit and notified the town that they would be deploying their own fiber network. The telco has recently responded to Ars Technica, saying they only sued to save Monticello from itself, apparently feeling that the municipality is unprepared for the onerous costs of maintaining such a network, and would lack the expertise to do so."
Craziness (Score:5, Interesting)
Expect to see the telecom draw out this lawsuit as long as they can possibly take it (think SCO here) and deploy their own network in the meantime, then sue the town again if they try to lay their own network thereafter for tortious interference with business practices or other such legal BS (IANAL and don't know what statutes they could use).
Craziness. I hope a judge knocks this down quick, but I'm not optimistic.
It's basically the company telling the town, "Stay the fuck out of our business or it'll cost you dearly. It's our monopoly, dammit."
Re:Craziness (Score:3, Interesting)
Freaking retarded (Score:5, Interesting)
Maintenance Cost of Fiber are Actually Lower (Score:4, Interesting)
Switching from copper to fiber is a big deal in heavy manufacturing and especially in electric plants. Most electric plants are heavily wired with copper. Problem is that copper is more prone to interference. When copper fails, it can be quite difficult to isolate the failure. Copper is also several orders of magnitude lighter (weight wise) than copper and a lot less bulky. Vendors usually quote a "50%" cost reduction from copper.
In the building trades, fiber only construction saves a good amount of space and labor. I've read that medium size office buildings can sometimes shave $300,000 off their construction costs.
I can't recall exactly, but I believe most new airplanes are being built with fiber. It's much easier to install and maintain than the copper it replaces. I remember reading years ago that some lab at MIT (I believe) developed a device to allow fiber optic cable to directly replace the copper wiring coming out of the instrument panels. I am afraid I can't remember reading if this was ever implemented.
I'm not an expert, but I think the rational for this lawsuit is rather weak. I don't know what else their town is working on, but I doubt they expect their parks and recreation staff to maintain their fiber network. They'll hire a subcontractor, probably the same people the telcos were going to hire and be done.
Good for them.
From a former TDS employee... (Score:1, Interesting)
Most people at TDS are reasonable. They're the Dilberts, not the PHBs. The problem is that management in the organization simply doesn't understand competition. They fear it like a vicious dog clawing at their corner office window. Here's an example.
After the Telecommunications Act of 94 (I think that was the year), it opened the door to other telco competition. Their answer was to form another company, TDS Metrocom, to compete primarily against Ameritech. The result was astounding. Instead of one cohesive structure, we ended up with two completely separate companies that didn't get along well. Not just physically separate (different headquarters), but even technically segmented.
Another entertaining example was one of the products I was working on. The proof of concept was showing red flags at every turn. The idea was just plain stupid, but management thought it was going to "revolutionize everything". During a meeting with my Bosses, Bosses, Bosses Boss (i think there were a couple more layers to go above that even), the guy asked me about the product. I could almost hear the sphincter of his direct report slam shut from across the room, and I started speaking the Truth. Hey, I was barely a year out of college, what did I know? After about 5 minutes of explaining in minute detail about how this product was a bottomless pit of time and money, the meeting was abruptly cut short.
So fellow
Re:Support The Municipality (We're Onto You) (Score:3, Interesting)
Re:Corporatism (Score:3, Interesting)
You don't have unregulated capitalism. That would actually be a good thing. While there is a government there is no unregulated capitalism. without a government this wouldn't even be an issue.
Re:Support The Municipality (We're Onto You) (Score:3, Interesting)
They took the damn money, so they ought to build the network. If they don't, then they shouldn't only allow others to do their job, they should be forced to return the money.
And they haven't been doing the job that they took the money to do.
Re:Craziness (Score:1, Interesting)
town doesn't have money to keep fighting legal battles.
Re:Corporatism (Score:2, Interesting)
Re:Support The Municipality (We're Onto You) (Score:3, Interesting)
Because otherwise it wouldn't happen?
Or maybe you'd like to be out there digging ditches and laying pipe for free. Sounds to me like you're willing. You should start cold-calling mayors.
Re:How ISP should be run (Score:3, Interesting)
That was one of the big issues of the - now repealed - '96 telco reform act. Each incumbent local exchange carrier (Monopoly) would have to give access to their network. However there was no guideline that they couldn't give themselves access also.
The problem was that they would always find ways to sell the service to themselves far cheaper than any competition could get it. It was impossible to compete against say Verizon DSL by buying wholesale access to Verizon networks and rolling out your own DSL.
Of course the best part was all the large ILECs simply stopped having the infrastructure available to even offer broadband. Then their argument, which eventually won the repeal of the '96 reform act, was 'why should we build out a broadband network that we don't make any money at. Repeal the law about us having to share and we'll gladly give broadband to everyone'. The government repealed the law that gave competition at least a ghost of a chance in order to help the common person get broadband, don'tchaknow.
That was the official line that Fred Upton, then chair of the House subcommittee on telecommunications, gave me when I asked him why he wanted to repeal the '96 reform act. Years later and Fred's own district still has horrid broadband connections [216.17.87.52] (Sorry, the local paper herald palladium has a bad online presence).
I'm usually against as much regulation as possible but to level the monopoly playing field your suggestion is spot on.
Re:Craziness (Score:5, Interesting)
Re:Support The Municipality (We're Onto You) (Score:4, Interesting)
It works rather differently here in outlying parts of Los Angeles County, and I'm sure this isn't unique:
The local water companies charge $15k to hook up to the water network, plus a monthly usage bill.
However, they've lately taken it a step further: If you live within one of these private water districts, drilling your own well is now prohibited (even in very rural areas). In fact, if you have an existing well and it is shut down for ANY reason (even something that would normally be temporary) -- you are prohibited from restarting your well, and you MUST hook up to the water company's system.
Needless to say, this gov't-enforced enhancement of their busines model makes the little local water companies delerious with joy.
Now, if you're starting from no water at all, they're not a bad deal compared to a well -- their water usage rate costs about half what pumping it yourself does, and the hookup cost is about 1/3rd of the price of a new well. But if you have an existing well, and are forced to switch over, you just got robbed of the $40k+ it cost you to drill it, plus the $15k charge for new hookups.
(And no, this isn't hearsay; it's straight from a conversation I had with the president of a local water company.)
Re:Support The Municipality (We're Onto You) (Score:3, Interesting)
Re:Thanks, but no thanks (Score:2, Interesting)
When's the last time you saw a chain gang laying some asphalt?
Re:Support The Municipality (We're Onto You) (Score:3, Interesting)
The company receives additional customers, satisfies the government's requirement of supporting all citizens, is granted a monopoly, *and* receives capital to do it all.
What's wrong with forcing the company to either pay for the construction or stop expanding their network in the area. There just might be another company willing to make the investment to capture the rest of the region's customers.
If tax dollars are going to go toward this construction, then these portions of the network can be owned by the government and leased to the company.
Re:Craziness (Score:5, Interesting)
I too hate an extra layer for the user to resolve problems...but, in this case...I think it might be justified to give the user the best service for his $$'s, and to also keep the govt. out of the regulation of said service.
Re:Craziness (Score:5, Interesting)
town doesn't have money to keep fighting legal battles.
Not True. According to their Comprehensive Annual Financial Report [govoffice2.com] (CAFR) they have $37.8 Million in Cash Investments alone. That should get them some decent representation.
Google any your city plus CAFR and see how much money your city/county/school district/state is hiding from you.
Re:Craziness (Score:3, Interesting)
If I were a citizen, I would countersue the company by demonstrating future harm.
Re:Support The Municipality (We're Onto You) (Score:3, Interesting)
You are the one missing something - the monopolies were the ones paid years ago to provide the country with fiber (by congress) and they haven't built anything yet.
It seems to me, they haven't fulfilled their part of the contract and thus forfeit their monopoly status by not providing service. By now, no one should have be using dial-up service anymore.
This is one huge ego contest. (Score:2, Interesting)
I'm a resident of Monticello, and I'm shaking my head at what is going on. The city has spent over $1 million to research etc. whether the city will be better off with fiber. Meanwhile TDS has gone ahead and is laying fiber throughout the town.
The question is. Would TDS have done this if the city hadn't pushed their buttons? The town's population is only 11,000. Yes, just eleven thousand!
As an aside, the company TDS hired to drill/lay the fiber has proved their ineptness, cutting numerous telephone cables (whole areas of the city cut off, and at least once penetrated a main gas feed.
Then make the largest raceways possible. (Score:5, Interesting)
If it were up to me, municipalities all over the place would be putting in precast, modular component tunnels [uvauburn.com] under major streets that would be big enough to stand inside and to carry telecom lines, electrical lines, gas lines, and so on, all on top of water and sewage lines. This would cut monopoly power waaay down and massively decrease the cost, likelihood, and problems related to breakdowns, not to mention make things like greywater processing much more practical.
I see lots of unknowns here. (Score:4, Interesting)
Now, if we're thinking about this as a business, which is a distortion but I'll run with it, it's normal for telecom companies to spend as much as a couple thousand dollars to acquire business customers. So if we assume five hundred businesses, then we're talking about just acquiring that business being worth about a million of that money. If we assume 700 children of school age who would use that service, well, buying computers for that many kids would last nowhere near as long and would cost over a million bucks, all things considered.
It all comes down to numbers, though, doesn't it? Do we compare this to a sewage system, which will deliver value for a hundred years or more, or do we compare it to a wireless network which will need to be rebuilt every five years or so?
How many years of service would this proposal provide?
How much of this money goes for short-term equipment like routers and how much for long-term infrastructure like fiber and putting in channels?
Who will own that city-provided infrastructure?
How many customers will use this?
Of what types?
Will they billed for this and if so, how?
I don't know. And afaict, neither do you. You've got interesting and useful things to say about the contract type and such, for which I thank you. But as for total net value, unless you've got answers to most or all of the questions above, you might want to get off your high horse a bit and cut them a little more slack.
Re:Support The Municipality (We're Onto You) (Score:3, Interesting)
The ground water supplying private wells is 400 feet down. The water company wells go about 1500 feet. Both are fed by a very large underground river that originates outside this county, and which there are zero efforts to "replenish" by anyone. However, the water company (and ag wells, which are exempt from this forced monopoly) draw vastly more water than all the private wells combined. So your argument doesn't, uh, hold water :) nor to my knowledge has that argument ever come up. AFAIK, the only argument ever used was "we'll make more money (and contribute more to certain county commissioners' warchests)".
And being $60k out of pocket is a good deal more than irritating, I'd say. For most people out in this area, that's at least two years' wages.
"...require the government to spend money to replenish the supply (...of rain)."
Haha, that's a good one :)
Re:Corporatism (Score:3, Interesting)
Re:Corporatism (Score:3, Interesting)
If you don't regulate companies so that they can't take advantage of people and things, they will act in manors which destroy the middle class (the foundation of a good economy).
Can you support your assertion that the middle class is the "foundation of a good economy"? I'm not necessarily expressing disagreement; it just sounds like one of those random statements about macroeconomics that people so often throw out without really knowing what they're talking about.
And of course companies will try to take advantage of people. And people will try to take advantage of companies. That's precisely how capitalism works: "it is not from the benevolence of the butcher the brewer, or the baker that we expect our dinner, but from their regard to their own interest", as Adam Smith wrote.
Yes, there will be cases of fraud or abuse. But here's the rub: you are implicitly assuming that allowing elected officials to stick their noses in everything will help alleviate this problem, without causing more problems than it solves. Suffice it to say that is a matter of some debate.
Re:Craziness (Score:5, Interesting)
Taxpayers aren't necessarily good at taking a long-term view. Yes, the investment should benefit the taxpayer (investing in infrastructure, decent education - things that build up the society over the long-term) but should probably not go into the taxpayer's pockets. The recent US "tax refund" was no such thing, since everyone knew damn well the money would end up in the hands of merchants almost immediately. Most likely, the populace got nothing of any worth out of the deal - the amounts involved were far too trivial and Americans work on a debt culture not a saving culture. Pure bread and circuses. All illusions to make people feel better, without giving them anything worth feeling better about.
On the other hand, the sum total of cash was quite considerable. Had the same total amount been spent on, oh, debugging the US educational system, or getting Amtrak some more rolling stock, people may not have experienced the same peak level of happiness, but a whole lot more people would have had actual value added to their lives.
I know, I make a lousy American. Blame the British in me. But blame or credit, it is indisputable that Governments have the resources to invest in things that will have a longer-term benefit to many, individuals (barring the super-rich) barely have the resources to invest in things that will have any meaningful (ie: not bread and circuses) impact on even themselves. They certainly can't affect anything beyond the tiniest of microcosms in the macrocosm of an entire nation. That's why, tens of thousands of years ago, they figured out how to organize collectively to do such stuff.
Re:Craziness (Score:5, Interesting)
Broadband Cities (Score:1, Interesting)
There is an international organization called Broadband Cities that could help this municipality. The organization is a band of municipalities all the way from Iceland to Brazil that are bringing fiber to the home on their own. I was a speaker at one of their conferences showing off a IPTV solution our company makes for eGovernment and the consensus was that Telcos are actively ruining the adoption of fiber to the home. Either by obstructing the municipalities work like this or by limiting the data speeds so they can ramp up slowly and make consumers pay more and more for faster speeds.
This is much more serious than people here think because this is e.g. stifling a revolution in offsite medical care for example via HD video conferencing and stopping free speech as well because without the speed limitations anyone can open their own tv channel, schools etc...
This fight with the Telcos is also about the rural areas where they are not interested in connecting to high speed networks.
I happen to work with on of the largest Telcos and until recently it was their strategy to push ADSL rather than fiber to the home because it was cheaper for them even though the fiber is only a few meters away from the home.
Re:Corporatism (Score:3, Interesting)
There is more to economics than Ron Paul.
In your first sentence, you are saying that a True Scotsman's [wikipedia.org] capitalism would have prevented the collapse.
You have a minority view of the causes of the Great Depression.
There is no evidence at all for your statements about the New Deal (dogma notwithstanding).