Minnesota city fights for right to build broadband network

[from the Institute for Local Self-Reliance]

The City of Monticello, Minnesota has filed a motion to dismiss a lawsuit preventing it from building the fiber optic network 74% of voters supported in a referendum last fall.

TDS, the incumbent telephone provider in Monticello, rebuffed solicitations from the City to build a fiber network before filing a complaint to prevent the City from building its own network.

Minnesota Statute 475.52 gives cities the right to bond for a variety of projects, from public buildings to sidewalks to wastewater treatment plants. The language is quite broad, granting bonding authority “for any utility or other public convenience from which a revenue is or may be derived.”

“TDS wants the court to believe that a fiber optic network offering telephone, Internet access, and cable television is neither a utility nor a public convenience,” says Christopher Mitchell, Director of the Telecommunications as Commons Initiative for the Institute for Local Self-Reliance (ILSR). “Incumbent providers across the United States file these frivolous lawsuits to prevent communities from breaking their monopoly.”

The second piece of the complaint alleges that part of the bond will be used to pay ‘current expenses.’ MN statute proscribes bonding for current expenses. The city of Monticello has responded that it will be well within the law when using bond proceeds.

“Consider a community using revenue bonds to build a swimming pool. The community must hire employees before it generates a dollar of revenue,” Mitchell continues, “these startup costs have never been considered ‘current expenses’ and Minnesota Supreme Court has said as much.”

Mitchell researches publicly owned broadband networks nationwide, and has followed in the Monticello lawsuit from the beginning.

“If our ancestors accepted TDS’ position ­ and there were many companies making the same points 100 years ago ­ electricity would still not have reached many rural areas, leaving us much worse off as a country,” explains Mitchell. “We hope the court rapidly dismisses this frivolous lawsuit and allows the democratic process in Monticello to continue.”

About ILSR and the New Rules Project: Since 1974, ILSR has worked with citizen groups, governments and private businesses in developing practices that extract the maximum value from local resources. A program of ILSR, the New Rules Project focuses on local, state and national policies that enable that goal.

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