Rural telco TDS sues Monitcello, MN for building fiber network

Recently, after years of sucking up USF and other government subsidies, the big 3 telcos have been selling off rural systems rather than making the improvements the subsidies were to have funded. This has brought about a small wave of Telco upstarts who now operate many of America’s rural systems. One of them is TDS.

While TDS has made some improvements since taking over, Monticello, MN citizens want FTTH service instead of the meager 3MBPS DSL TDS provides. True to telco monopoly form, instead of providing a fiber network, TDS sued when the city decided to build it’s own. Unlike many small cities who have buckled under the deep pocketed telco lawyering, Monticello is fighting back.

Quoting ILSR Spokesperson Brooke Gullikson:

Monticello has filed a motion to dismiss the 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”.

We enthusiastically support the citizens of Monticello in getting what most US broadband users only dream about, world class access. The presiding judge should throw out the TDS suit without delay.

editorial note: while we agree with the ISLR’s views on this issue, we do not endorse most of their policies or initiatives.