Forgot your password?
typodupeerror
Networking Businesses Communications

Telco Sues Municipality For Laying Their Own Fiber 408

Posted by Soulskill
from the we're-here-to-help-and-we-brought-lawyers dept.
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."
This discussion has been archived. No new comments can be posted.

Telco Sues Municipality For Laying Their Own Fiber

Comments Filter:
  • Craziness (Score:5, Interesting)

    by TheSpoom (715771) * <slashdot@@@uberm00...net> on Friday September 12, 2008 @09:28PM (#24986235) Homepage Journal

    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: (Score:3, Interesting)

      by erareno (1103509)
      I hope the town counter-sues with anti-trust suits just to screw with this company.
    • by Anonymous Coward on Friday September 12, 2008 @10:18PM (#24986599)
      Much of the populated areas of Monticello resemble an industrial park. Whoever is in control of that fiber is in for some serious cash from the plants that have setup shop there. This will be a damn interesting battle, the city will fight this tooth-and-nail.
    • Corporatism (Score:2, Flamebait)

      by Max Threshold (540114)
      And the neocons say unregulated capitalism isn't destroying our democracy. Eisenhower, how we miss thee...
      • Re: (Score:3, Interesting)

        by Anonymous Coward

        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:Corporatism (Score:5, Insightful)

          by plasmacutter (901737) on Saturday September 13, 2008 @01:53AM (#24987933)

          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.

          sorry, wrong.

          I live in the southeast.

          Whenever a hurricane hits the gas prices shoot up a buck because the republicans killed off the regulations on oil speculation, and refuse to punish oil cos when they go-a-gouging.

          The last time we had "unregulated capitalism", snake oil salesmen made people wary of medication, meat was as hazardous as nuclear waste, and we had a stock market crash that put 30% of the populace into hoovervilles.

          The correct answer is "proper regulation".. the kind that places big business and the government at loggerheads.

          When big business and government fight each other making no gains, the little guy wins.

      • Re:Corporatism (Score:5, Informative)

        by megamerican (1073936) on Friday September 12, 2008 @11:36PM (#24987043)

        And the neocons say unregulated capitalism isn't destroying our democracy. Eisenhower, how we miss thee...

        What you don't realize that every city in the United States is ran like a corporation!

        Every city/county/state/school district must publish a Comprehensive Annual Financial Report (CAFR), just like every corporation must publish and Annual Financial Report and send it to their stockholders.

        Here is Monticello, MN CAFR [govoffice2.com]. They have $37.8 Million in cash assets alone. Simply google CAFR and any government institution to see how much money they're hiding from you (its in the open but kept separate from their annual budget).

        • Re: (Score:3, Insightful)

          by Max Threshold (540114)
          Your point? How corporations keep their books is not the characteristic that makes them a threat to democracy.
    • Re: (Score:3, Informative)

      by scottrocket (1065416)
      And disengenous to say that they are saving the city from themselves. After 10 years, Here's [ashlandfiber.net] how some citizens get their choices, to the chagrin of Charter.
    • Re: (Score:3, Interesting)

      by digitalunity (19107)

      If I were a citizen, I would countersue the company by demonstrating future harm.

    • by Anonymous Coward on Saturday September 13, 2008 @02:38AM (#24988175)

      I Live in Monticello, Mn. and have been following this for some time. I'm fully in favor of this and believe it's in the best interest of the community. It'll benefit home users, but it's even more critical to attract big business and help grow the town.
      Just a couple of things I want to set straight.
          First, Monticello is being sued by Blackwater Communications (TDS) for using bonds to pay for the city fiber network. They can't stop the city from putting it in, but they're trying to make it painful. Originally it was to pay for itself and not cause additional taxes. The mayor has now openly said it may take taxes to do it, but the city will see it through.
          Second is that several years ago, TDS, as well as the local cable co. were approached by the city to partner in this effort. Both flat out said no.
          Third, only after the city was about to break ground did TDS decide to put in there own fiber network. Which by the way, I don't believe is truly fiber all the way to the wall. Seeing that the cities network fails is the only way to control pricing as the city had already stated what services would cost and trust me, it blew TDS out of the water!
          Fourth, TDS has also begun a misleading campaign calling local residents, including myself, telling them about how the cities network will be under par and how business services are superior. Funny, cause I work in IT and am pretty technical; BS always smells! It's all about what "Joe Schmoe" doesn't know and how they usually believe what they are told. Oh ya, and the idiots accidentally called the mayor pitching the bull; oops! They've also started blanketing the neighborhoods with 1-year free broadband offers. Read the fine print cause if you bite your screwed! It's another way to lock things up by removing potential customers for the cities network. I get these adds in the mail literally every couple of days. I'm so sick of it I'm considering calling them and telling them not to mail me.
          Personally I can't stand TDS anymore and won't even consider using them for anything EVER again. My land line with them has been dropped, my internet switched to cable (until the cities fiber is available), I use my cell and Skype. This is a prime example of corporate greed hurting the community!

    • Re:Craziness (Score:5, Interesting)

      by pruffin (1363141) on Saturday September 13, 2008 @05:52AM (#24988969)
      I live in Monticello and know how TDS has been strangling our town with high telephone rates and extremely terrible service. I have no love or loyalty for TDS. For example if you live in Minneapolis you can call Monticello free of charge. To live in Monticello you are forced to pay a toll charge or buy a more expensive phone package to get access to 612, 651 or 952 exchanges. People in Monticello have been forced to pay for service at rates and fees far above what all our surrounding neighbors have to pay. The real interesting thing about this situation is that the choice to put a city owned fiber loop and allow the city to compete with TDS was voted on by the residents of our city. We democratically voted for the city to compete against TDS. The majority of people in Monticello do not like doing business with TDS and when given the opportunity to choose another service provider we did. We do not need to be saved from ourselves as TDS would state but from the high costs and poor service from a company who has really overstayed their welcome in my town and used their monopoly to rape our pocketbooks. It is interesting that TDS did not start trying to upgrade their services or attempt to bring the population of Monticello any REAL modern services until the city started to make their move to bring fair and honest services to our community.
  • by unity100 (970058) on Friday September 12, 2008 @09:31PM (#24986247) Homepage Journal
    please someone tell me that this is a f@ckin joke.
    • by Anonymous Coward on Friday September 12, 2008 @09:57PM (#24986431)
      Well yeah it's a fuckin' joke, just not the "ha ha" kind.
      • by _Sprocket_ (42527)

        Oh. I get it. Less like a rubber chicken and more like rubbing a chicken.

        I'm not sure how that applies to the telco. But I suspect it does.

    • Re: (Score:3, Informative)

      by Tmack (593755)

      "they only sued to save Monticello from itself"... please someone tell me that this is a f@ckin joke.

      The town should look up Dalton Utilities [dutil.com], Dalton Ga. for some good legal fodder. Back in the late 90's when I was still there working as an engineer in a carpet mill over the summer, they were deploying fiber while pulling new power lines to the mills, mainly for their power monitoring systems. Thus they had a fiber backbone across most of the city before the dot com boom/bust. Using this as a starting point when the internet took off and people started demanding faster broadband, they started deploying FT

  • I read TFA and I still have no idea what the legal basis of this claim is. Does anyone have any idea on what grounds they are suing?
    • Re:what? (Score:5, Informative)

      by Anonymous Coward on Friday September 12, 2008 @09:38PM (#24986293)

      I read TFA and I still have no idea what the legal basis of this claim is. Does anyone have any idea on what grounds they are suing?

      On the basis that any suit will cost the town more than it will the telco, if not in dollars then in time. The article explains this quite clearly (make sure you read both relevant Arsicles).

    • Re:what? (Score:5, Informative)

      by Red Jesus (962106) on Friday September 12, 2008 @09:44PM (#24986335)
      FTFA:

      Bridgewater Telephone argues that the city cannot use tax-exempt bonds to "enter into direct competition with incumbent commercial providers of telephone, Internet, and cable television services."

      The city decided to lay cable. Bridgewater Telephone interrupts, "Too bad, because that would put you in direct competition with our cable. The word `incumbent' is probably the reason this argument won't work. Bridgewater's cable did not exist at the time of the city's decision and, in fact, it does not exist now. But according to TFA you say you've read, that's the legal basis of the claim.

    • Re:what? (Score:5, Informative)

      by Sun.Jedi (1280674) on Friday September 12, 2008 @09:59PM (#24986449) Journal

      Revenue bonds.

      The telco is saying that the town would not be able to -even- -think- about building a fiber network if it was taxpayers money footing the bill(many of whom may not utilize the service).

      Because bonds are being used, and the business model pays for itself with little financial risk to the town, the telco is saying its an unfair business advantage.

      Imagine that... a town with the intellect and means to provide a service the people actually want, and are willing to provide it the way the people actually want it.

      suddenoutbreakofcommonsense

      I hope the town wins. Hard, and fast.

    • Re: (Score:2, Informative)

      by mysidia (191772)

      Except you can't sue the government. Federal and State governments have sovereign immunity: they cannot be sued, except on the basis that they have explicitly allowed.

      This doesn't apply to city governments though. Residents of Monticello should be expressing outrage with their state legislatures and getting them to pass legislation that will stop the Telco in their tracks.

    • Re: (Score:3, Insightful)

      by MichaelSmith (789609)
      Where I live you have to have a telecommunications carrier license to provide telecommunications services across property boundaries. I used to work for the state road authority and we laid fibre along freeways because we owned all the land. I could get in trouble over this for letting neighbors use my wifi.

      Maybe the municipality needs to get a license to lay the cable? They might be okay along road alignments they control but they may be crossing property boundaries at some point.
  • Phew... (Score:3, Funny)

    by introspekt.i (1233118) on Friday September 12, 2008 @09:33PM (#24986261)
    If only we had more good corporate neighbors like this that solved our own problems and did our thinking for us so we don't have to.


    Good lookin' out, TDS. Cough.
  • Inane (Score:5, Insightful)

    by runlevelfour (1329235) on Friday September 12, 2008 @09:36PM (#24986277)
    In a nutshell the telco is suing the city with the justification that they are protecting the city from itself? I think I would have a lot more respect if they just came right out and said they didn't want the city as competition. If you're going to be a greedy soulless corporation then be one for crying out loud. Knock off the fake altruism because no one is buying it. And I recommend they hire a better legal team. Every soulless corporation requires a top notch crack team of lawyers to distort and manipulate the law in their favor. "any utility or other public convenience from which a revenue is or may be derived." I know next to nothing about law but even I can see this is cut and dry. The city raised bonds to provide what is definitely a public convenience, yet the telco sues anyway. Unfortunately I think their tactic is to try and get an injunction then keep the case in court for the next two decades.
    • In a nutshell the telco is suing the city with the justification that they are protecting the city from itself? I think I would have a lot more respect if they just came right out and said they didn't want the city as competition.

      In the same statement they said that was the SECOND reason for suing the city.

  • So Just.... (Score:4, Insightful)

    by mikerubin (449692) on Friday September 12, 2008 @09:38PM (#24986289)

    How do towns set up a municipal electric service without being sued?

    More importantly, how many speeding/parking/jaywalking tickets does this Telco plan to get when passing through town?

  • by mrbah (844007) on Friday September 12, 2008 @09:41PM (#24986319)
    Why let a town build a network with taxpayer money when you can build a network with that same money, then charge them again for using it? It's the classic telco business model.
    • by mcrbids (148650) on Friday September 12, 2008 @10:07PM (#24986513) Journal

      Why let a town build a network with taxpayer money when you can build a network with that same money, then charge them again for using it? It's the classic telco business model.

      I think you are missing a very key point, here. It's true that telcos were paid government funds to build a significant part of the telephone network. But it's also true that in the vast majority of cases, those parts are the UNPROFITABLE parts.

      Let's say you have a water pumping service, doing business in town, and you're making whatever profits you are making. For this example, we'll ignore the fact that most communities have community water. Business is good, you're expanding to cover more and more houses, starting with the most profitable ones first. (densest neighborhoods)

      But then de gubbmint comes in and tell you that you have to do a bunch of stuff in order to continue to do business, because of the benefits to the general health of the community or whatever. For example, since you provide water to some houses in your town, now you have to provide water to ALL houses in your town.

      Now, it's not as though you wouldn't love to serve all the houses in the town, but some of those houses are over a mile apart! Just the cost to dig the pipes out that far will cost you over $10,000 per house! Since you are charging $50/month for water service, it's going to take almost 20 YEARS before you even break even on the base cost, nevermind the finance charges you'd incur to borrow the money to deliver the service the gubbmint requires!

      And you can't charge the homeowners, either - they aren't buying anything, they didn't ask for it, and making them pay would be onerous on them, too.

      So, in circumstances like these, it's very typical for the private company (your water company) to ask for funding to assist in the problem areas. It often comes as a sort of deal: Your water company enjoys a monopoly status, subject to various regulations that you have to perform, in exchange for funding to cover the plumbing for the unprofitable areas.

      So the net effect goes something like this:

      1) Your company is now a monopoly that must turn in a Profits and Loss statement, along with proof of regular water testing to the city council every month or so. You cover 100% of the houses in the community, and you have no effective competition. One of your concessions is that the municipality can levy taxes via your bills. You have to calculate this bill, and turn over the tax money to the city quarterly.

      2) The city has now satisfied its goal of everybody having 100% availability to clean drinking water. It's paid for costs of plumbing by taking out a bond, secured against a tax raised against people's water bill.

      3) Everybody who lives in the community now pays a 5% monthly tax on the water bill to cover the cost of plumbing outlying areas. Financially, it's a raise in your bill if you were already contracted with the water company when it was all private, it still brings benefits such as improved local economy resulting from the improved infrastructure.

      • Re: (Score:3, Insightful)

        by baffled (1034554)

        It often comes as a sort of deal: Your water company enjoys a monopoly status, subject to various regulations that you have to perform, in exchange for funding to cover the plumbing for the unprofitable areas. ... The city ... paid for costs of plumbing by taking out a bond, secured against a tax raised against people's water bill.

        How is enjoying a monopoly an exchange for receiving tax dollars to build out your infrastructure?!

        • Re: (Score:3, Interesting)

          by rho (6063)

          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: (Score:3, Interesting)

          You get the tax dollars to subsidize the cost of supporting those outliers; the monopoly is natural and is frequently accompanied by regulated profits.
          • Re: (Score:3, Interesting)

            by baffled (1034554)
            It is not an exchange.

            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
          • by mrchaotica (681592) * on Saturday September 13, 2008 @01:58AM (#24987949)

            ...is frequently accompanied by regulated profits.

            DING DING DING! WE HAVE A WINNER!

            See, that's the thing that people don't seem to get: these telcos got the tax dollars, but aren't being subject to regulations, which is the entire problem!

      • Re: (Score:3, Interesting)

        by LordLucless (582312)
        The thing is, once those pipes are dug, the outliers are just as profitable as the town center (on a per capita basis anyway. The outlay is a once-off cost, but the monopoly lasts forever. Neither of which matters in this case, because it sounds like the telco hasn't even bothered building the infrastructure, it just plans to in the future.
        • Re: (Score:3, Insightful)

          by Burdell (228580)

          Of course, because pipes never break, get dug up, etc. If you have 5 times the pipes, you have something like 5 times the cost of maintaining them.

      • Re: (Score:3, Interesting)

        by HiThere (15173)

        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.

      • by Reziac (43301) * on Friday September 12, 2008 @11:02PM (#24986831) Homepage Journal

        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: (Score:3, Insightful)

          by evilviper (135110)

          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.

          It's not like it's just a handout.

          If you're pumping ground water, you're drawing down the water table. If more than a few people are doing this, the water table then has to be replenished regularly.

          Individuals that have drilled their own wells aren't going to pay to replenish their

          • Re: (Score:3, Interesting)

            by Reziac (43301) *

            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

      • Re: (Score:3, Interesting)

        by rolfwind (528248)

        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.

  • by treeves (963993) on Friday September 12, 2008 @09:41PM (#24986321) Homepage Journal
    ...the municipality is unprepared for the onerous costs of maintaining such a network, and would lack the expertise to do so

    It was right magnanimous of 'em to sue.

  • by Auckerman (223266) on Friday September 12, 2008 @09:44PM (#24986337)

    How is this any different than a town building a road. A solid internet infrastructure is just as important to city/state growth as a the transportation system. It's just simple.

    "No fair, I can't compete with the state." is not a good enough reason for me to care about your problem. Things like this would have been used to stop building the Interstate system in late 50s. Reasoning like this has allowed the infrastructure of the US to suffer, because someone companies are magic beings that solve problems and the government just ruins your life.

    • How is this any different than a town building a road. A solid internet infrastructure is just as important to city/state growth as a the transportation system. It's just simple.

      Actually, a better analogy is the power transmission industry. This is exactly what happened in the early days of electric power, with power companies suing cities and trying to lobby to pass laws and bribe officials to prevent cities from rolling their own... even when those same power companies were unwilling to invest in serving those cities.

    • Have you forgotten that the government is a MONOPOLY? That governments get to take your money whether you want to pay it or not? Contrast that with competing companies that have to persuade you to part with your dollars.

      Yeah, competing companies are magic beings (although of course they don't mean to be) and the government just ruins your life )when it tries to do more than keep the peace).

  • Freaking retarded (Score:5, Interesting)

    by afidel (530433) on Friday September 12, 2008 @09:45PM (#24986351)
    My boss lives in a town that has had their own utilities for over a century and they have stellar service and prices are lower than the crappy monopolies provide. It started with their own power station and over the years they added phone, cable, and fiber internet services. If they need service they get local people that actually care about fixing their issues and local students can get internships that teach them marketable skills. All this and they pay much *less* than the government granted/privately run monopolies in most surrounding areas. A good example of the non-financial benefits this has provided include the fact that they were one of the few communities to have power during the great NE blackout of 2003. Basically it comes down to the fact that there is a certain cost of building and maintaining the infrastructure, and if you let a monopoly private business run it you have to pay those costs over time plus the profits that are expected by the owners of that company.
  • Madness! (Score:5, Funny)

    by bogaboga (793279) on Friday September 12, 2008 @09:49PM (#24986381)

    ...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...

    So the company loves the city more than the city loves itself?

    How ironic! This sounds preposterous to me.

    These United States never cease to amaze.

  • by absent_speaker (905145) on Friday September 12, 2008 @09:54PM (#24986413)
    From what I understand, maintaining fiber networks isn't all that hard. In many cases, it's lower maintenance than existing infrastructures.

    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.
  • What a load (Score:5, Insightful)

    by FranTaylor (164577) on Friday September 12, 2008 @09:57PM (#24986433)

    Towns already run their own water pipes, sewer pipes, fire alarm systems, roads, etc. What is one more cable?

    I call BS if you say running fiber takes more expertise than running water and sewer pipes. Electrons can go uphill of their own accord, water needs help.

  • apparently feeling that the municipality is unprepared for the onerous costs of maintaining such a network, and would lack the expertise to do so.

    Ptttht....if the telco really feels this way, I tell them "here, drop the lawsuit, and if we truly can't match par with your network, we'll sell the line to you guys and admit we were wrong."

    Would the telco take them up on this? Shah right...
  • by corsec67 (627446) on Friday September 12, 2008 @09:58PM (#24986441) Homepage Journal

    Monticello hatched an ambitious plan to wire up its entire town with fiber, build an interconnect station, and allow ISPs to link up to the site and offer Internet access over the city-maintained fiber links.

    Since the fiber plant is going to be a monopoly, this is how internet access should be sold: have the part that is going to be a monopoly be regulated, and then allow competition where that is easy.

    The only trick is not allowing the people in charge of just the fiber to interact with the data running over that fiber, as the Canadians are discovering with Bell [arstechnica.com].

    • Re: (Score:3, Interesting)

      by witherstaff (713820)

      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

  • Simple Economics (Score:3, Insightful)

    by s0litaire (1205168) * on Friday September 12, 2008 @10:01PM (#24986471)
    How much does it cost to lay, install and Admin a fibre network for the city?? Say $30 million (rough, plucked out of thin air made up figure). TDS come along, and being the concerned citizens decide that the Fibre network is too much for the city so they sue them for $28 million. City settles for $15 million. So now TDS has been given a $15 million discount on setting up the Fibre network... = Profit....
  • like someone wiping their corporate ass.
  • 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.

    I, for one, am deeply grateful to our corporate overlords for saving the population of Monticello from themselves.

    Way to go!

  • Yes and no (Score:2, Insightful)

    by Brandybuck (704397)

    Governments should not be competing with private businesses. It's not their role. Monopolies aren't fun, but government run monopolies are downright depressing. Even if the government allows competition, how do you compete with an entity that has the power to tax or borrow against taxes?

    Much of the current "problem" is due to previous government created monopolies in local telephone and cable. The solution is not more of the same intervention.

    At the same time, I think the lawsuit is misguided. If I were a s

    • You say that like it's true.

      Your devotion to your ideology is religious. Judging by your sig, I guess there's not much I can say to change your mind. But just for kicks, I want to say this: I think you may be well-served by entertaining the possibility that your heroes could have been wrong.

      Just sowing seeds...

    • Re:Yes and no (Score:5, Insightful)

      by afidel (530433) on Friday September 12, 2008 @10:29PM (#24986661)
      Fiber to the home is what is known as a natural monopoly, there is an (essentially) fixed cost for deploying and maintaining such a utility and it is extremely inefficient and cost-ineffective to have multiple providers of the same service. The most efficient way to address this is to do exactly what the city set out to do, have a government run entity maintain the physical plant and allow competing private business to provide products over that plant. If you allow a monopoly private business to maintain the plant you simply increase the subscribers costs by the profit of the private business (baring any economies of scale enjoyed by the company operating a business larger than the incorporated area, but history has shown this is generally minimal and far overshadowed by the profit costs)
  • How do we prevent more of these pesky lawsuits?

    My only idea is we increase penalties so parties like this telco can be ordered to build out the network for free or some major penalty.

    Now that would be justice!

  • by Ungrounded Lightning (62228) on Friday September 12, 2008 @10:04PM (#24986497) Journal

    I recall, decades ago, when Ann Arbor was about to repave Division street - the main north-south drag for the core city. They were going to do it up properly so it would last.

    They'd had a lot of trouble with utilities tearing up the roads to work on their underground stuff, then not restoring them adequately. (In southern Michigan winters this resulted in frost heaves that soon tore the road back open, resulting in the need for more repairs - sometimes over and over. By which time the information about which utility had torn it up originally had been lost.)

    They couldn't really ban them from digging up the street to work on their stuff.

    So they passed a new ordinance that would result in a MAJOR cost for any company that tore up the street AFTER it was redone, for a decade or so, and gave 'em some large number of months to get their underground installations fixed up and upgraded before the repaving. (I think they imposed some "fee" - read "fine" or "tax" - but don't know the details.)

    That street was dug up all summer as the several utility companies rebuilt everything under it and installed new conduit and manholes for future expansion. (Better to get it in now, while there's no special issues on doing the work, than take the chance that the city's post-repaving gotchas would stick in court - or cost more in court fees to get them struck.)

    And that road surface stayed pristine for years.

    Now it seems to me that, if this telco wants to play hardball, this municipality could find similar stuff to do to them. B-)

    Granted that the courts might eventually strike down whatever the city does as unfair competition, too. But it would still cost the telco more money to get that to happen - and tit-for-tat is well recognized as a very successful strategy.

    Downside is it needs to be done in a way that doesn't end up stalling both projects while the citizens sit on their thumbs waiting for an internet connection.

    = = = =

    Also: Didn't a federal court just strike early-termination fees for cell phone providers? Might be possible to go after that if the telco does a long-term contract lockin to try to keep the citizens on their net once the delayed city net is live.

  • by zymano (581466) on Friday September 12, 2008 @10:13PM (#24986555)

    The Telco's have no rights to force people to buy their goods.

    I might add that CABLE TV SUCKS too. There is no variety or quality.

  • Great news! Now to get my municipality to vote to build their own fiber network, and Verizon will run Fios.

  • As little as possible should be done by the government — that's the principle.

    Having them provide Internet service is like running word-processing in a kernel.

    • by Fulcrum of Evil (560260) on Friday September 12, 2008 @10:57PM (#24986799)
      this is a town trying to build out infrastructure to support its residents; it's certainly something within their purview. Personally, I think this is a better setup than letting the telco own the lines, since there's no incentive to gouge, and this sort of thing can work out just fine.
    • by PacketShaper (917017) on Friday September 12, 2008 @11:00PM (#24986821)
      Sorry, wrong. The *federal* government should do as little as possible. Regulate interstate commerce, defend our borders and coin money, specifically.

      This is a perfect example of something a *local* government should do, if the local populace votes and approves of it.
      • Re: (Score:3, Insightful)

        by gregbot9000 (1293772)
        The problem with that is a "local" community has a lot of trouble dealing with an "International" corporation that has a lot more money. Especially when it's the federal government who signs away legal rights the community has to the highest bidder. So many people talk the talk of smaller federal govt. but don't acknowledge the greater protection of individual rights that would be needed for it to work. Though that isn't really the case with this lawsuit.
  • by dont_forget (71107) on Friday September 12, 2008 @11:27PM (#24986975)

    I live in Big Lake, MN which is just a few miles away from Monticello, MN. The story misses a few things. First of all Monticello approached the Bridgewater to build the fiber network, and Bridgewater decided not to. So Monticello went ahead and decided to do itself. The second thing people should know is that Monticello does not have a normal small town finance system. Monticello Nuclear Generating Plant provides a huge cash influx to the city, allowing it to pursue large projects.

  • Protection racket (Score:5, Insightful)

    by Duncan Blackthorne (1095849) on Friday September 12, 2008 @11:29PM (#24986989)
    Knowing how most telecoms seem to operate in this country (Comcast, AT&T, Verizon, etc) I seriously doubt they're suing "for the benefit of the community". More likely it's "Aww, you hurt our feelings by leaving us out of the loop, so we're going to send over the firm of Guido, Guido, and Guido, Attorneys at Law, to have a little 'talk' with you about it -- in court". I imagine if that doesn't work, they'll resort to the time-honored methods of burglary, arson, and assault to "get their point across".

    *spits on ground in disgust*

  • by Skapare (16644) on Friday September 12, 2008 @11:35PM (#24987037) Homepage

    ...would be to build as just a foundational infrastructure. It would be fiber all the way from each home and business to the various connection points. These would be buildings, not little pedestals. These fibers would then be leased out to any company wanting to provide services over them. There would be 4 actual optical fibers to each home and business (more for special cases), so it would be possible for "light up" providers to offer only one type of service, and customers could get their phone, TV, and internet, from different providers if they so choose. Or people and businesses could lease them directly to have a very high speed point to point service wherever they want.

    It's not competing against the telco ... it's providing them with a fiber based infrastructure they can use. It's not competing against cable TV ... it's providing them with a fiber based infrastructure they can use. It's not competing against broadband services ... it's providing them with a fiber based infrastructure they can use.

    It's just a road. The city and state generally build roads and let people use them. The directions the telcos and cable TV companies are trying to go is the equivalent to not only them building the road, but also them building all the vehicles and allowing no other vehicles on the road, and them restricting what parts of town people are allowed to even go to.

    Cities often provide public transportation. So some basic default services is not out of the question, anyway. But it might get structured so it is not a major competition. For example, it might provide connectivity only within the city itself and not to the world internet. It might carry only over-the-air TV stations, and not all those satellite based national channels.

    I'd bet a lot of business would love to jump in and provide services over an infrastructure they don't have to pay all that up front cost to build. Whether it's paid for by leasing the fibers, or by taxes, is something the city would have to decide.

  • by BcNexus (826974) on Saturday September 13, 2008 @01:24AM (#24987751)
    a series of tubes /
    made of many fiber strands /
    stymied by lawsuit

Serving coffee on aircraft causes turbulence.

Working...