TDS Telecom, a telco with 3,500 employees and a presence in 30 states, is suing the town of Monticello, Minnesota, for trying to put in a fiber optic network of its own. Why would a company try to prevent a town from building itself a faster network? TDS tells us that it's really just looking out for the taxpayer (and its own infrastructure investment).
Not satisfied with the current DSL and cable offerings, 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. After a vote on the measure passed overwhelmingly last year, Monticello moved to break ground and was promptly sued by the local telephone provider, Bridgewater, a unit of TDS.
We've already covered the legal filings in that case (which is ongoing), but were also interested in hearing from TDS. Fiber backers see the lawsuit and a recent announcement to install a TDS-built fiber network in town as strategy designed largely to prevent the Monticello experiment from being repeated across Minnesota ("See, you'll get sued, and neither of us wants that! Also, we're already building fiber networks, so no need to do it yourselves! Please stop thinking about it!"). But TDS insists it's in the right.
Andrew Petersen, the director of legislative and public relations for the company, told Ars in an e-mail that the company's "first" reason for filing the lawsuit was because such projects have failed in other communities and "we're hoping to prevent the citizens of Monticello from becoming the shareholders of a $25 million tax burden." Second on the list was the company's desire to "protect our corporate assets and investments in Monticello," and TDS believes that the city has crossed legal lines in starting the project.
When I spoke to Petersen by phone, he stressed that TDS was committed to its local communities; when it heard the voice of the people, it took action. Just as the city prepared to begin digging in May, TDS announced that it would wire Monticello for fiber and would do it by the end of the year. Given that the city had embarked on a multiyear process, at significant expense, to investigate and then approve such a project, why did TDS wait until all that time and energy had been invested in the idea before suing? Petersen says it's because TDS didn't yet know that people really wanted fiber; once the referendum was a success, the company moved quickly to give people what it now knew they wanted.
I asked Petersen to speak more generally about his company's objection to the city's plan, which would have kept the network open for hookups to any private ISP that wanted to provide service. But Petersen says that's not an attractive offer; a company like TDS really wants to own (and control) its own network so that it's certain of the network architecture and can address last-mile complaints from subscribers. Municipalities are better at "streets and snowplowing," Petersen says, than at highly technical network design and maintenance.
TDS has nine crews in town right now to build the 100-mile network; 20+ miles have already been laid. Meanwhile, the city has hardly been pleased with the entire process, and seems determined to pursue its original plan. While the main residential buildout is on hold during the court case, Monticello broke ground last week on a smaller fiber ring and an interconnection point for the network. This more limited project will link local government facilities.
In an August proposal, the city had asked TDS to partner on the work. While both entities were building their own networks, it hardly made sense to do the most expensive, most labor intensive work twice—tearing up the ground, inserting ducting, and running fiber. TDS said no, alleging that such cooperation could be anticompetitive, though it did offer free fiber links to all government buildings and redundant fiber links to schools (which are already served by a state system).
So the parallel fiber buildout goes on apace even as the parallel legal teams battle it out in a Minnesota courtroom. Such battles are being fought around the country, and most boil down to the limits of municipal services in each state. Has broadband become a utility service, so indispensable to the public that a city should at least have the right to offer it to everyone who pays taxes?
Christopher Mitchell, who works for the Institute for Local Self-Reliance and has been heavily involved in the Monticello fiber issue, argued in a piece for the local paper on July 31 that broadband is a utility and that local communities should be involved in providing it. "TDS, a phone company headquartered in Madison, has filed a complaint with the laughable charge that the fiber network is neither a 'utility' nor 'public convenience,'" he wrote. "Minnesota’s legislature has explicitly listed telecommunications and 'cable television and related services' in its definition of public utilities. Everyone who has ever used the Internet knows it is a public convenience.
"TDS cannot win this case, but it can stall Fibernet Monticello's start-up to buy time for its own hasty upgrades and attempts to lock subscribers into long-term contracts. The City must stand strong during these trying times. The landslide network referendum was not merely about having a faster network. It was about a faster network featuring local services and accountability to the community."
TDS, for its part, says the fiber build out shows its own accountability to the community, and Petersen argues that TDS isn't some unaccountable, much-loathed corporation. It has "extremely high customer satisfaction in all of our markets," he says.
You can read more from a pro-fiber perspective at Monticellofiber.com