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Comments: 252 +-   Minn. Supreme Court Upholds City's Right To Build Own Network on Monday June 22, @03:30PM

Posted by timothy on Monday June 22, @03:30PM
from the looking-forward-to-state-run-gun-stores dept.
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BcNexus writes with news from Minnesota that may have significance for cities around the US where municipal networks are either in place or planned: "Here's the latest development in a fight pitting a telecommunication company against government competition. The telco, TDS, took its fight all the way to the Minnesota Supreme Court because it thought the city had no right to serve people's internet, voice and television needs with its own network, but has failed." Also from Minnesota today, BcNexus writes "The State of Minnesota was the first to blink and chose to avoid a court showdown when it dropped its attempt to block online gambling sites."
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  • Free markets (Score:5, Interesting)

    by dburkland (1526971) on Monday June 22, @03:33PM (#28428259)
    I'm all for free Markets but the current Internet situation in Minnesota is pathetic. If the people want better service and are willing to fork out the dough let them however this project (if it gets off the ground) has a huge chance of failing like the many other attempts at Municipal Internet.
    • Re: (Score:2, Insightful)

      I was going to craft a well-thought out response regarding the difference between an ideal free market and Free Market Idealism, and point out that governments can be actors in a free market, and then I was going to dig up links to a couple of very successful municipal broadband projects.

      But then I thought to myself, "Looks like high schools have let out for the summer".

      I think it's time for a hiatus for me for a while...
    • Fail? (Score:5, Insightful)

      by copponex (13876) on Monday June 22, @03:44PM (#28428493) Homepage

      Will it fail just like municipal electric, water, sewer, and telephone?

      At some point I thought all of these private corporations suing the government because they can't compete with the government for efficiency would cause some light bulbs to go off. As long as it's implemented and controlled at the county level, doesn't prohibit the existence of private offerings, and pays for itself, what exactly is the problem?

      Do you really want to choose the tyranny of Comcast or AT&T over that of a local city or county meeting?

      • Re:Fail? (Score:4, Insightful)

        by garcia (6573) on Monday June 22, @04:02PM (#28428853) Homepage

        Do you really want to choose the tyranny of Comcast or AT&T over that of a local city or county meeting?

        I have no idea how private companies run their business meetings or make decisions but I do know how my local cities do and honestly, based on how they choose to spend MY money to support the various overreaching services they already do ($5 million on a new LEED certified municipal liquor store [lazylightning.org] or $20 million on an empty performing arts center which is in danger of losing over $1 million this year [lazylightning.org]), I have to say that I'd prefer that these ventures remain at the private level where my tax dollar input is minimal and generally only if I choose to subscribe to the service myself.

        We really don't need yet another venture owned and operated by the city (in one way or another, whether that be through a third party management company or not) that loses money because they are operating a service that they really don't know how to.

        • Re:Fail? (Score:4, Informative)

          by Volante3192 (953645) on Monday June 22, @04:09PM (#28428969)

          Except if the city's residents vote overwhelmingly to build their own fiber network, well, at some point democracy needs to kick in.

          (What was the number again? 75%? We can't get politicians elected by that wide a margin unless they're unopposed...)

        • Re:Fail? (Score:5, Insightful)

          by copponex (13876) on Monday June 22, @04:17PM (#28429107) Homepage

          Those are unfortunate, but good examples of what to privatize and what not to. I don't think utilities and liquor stores and performing arts centers are apple to apple comparisons.

          How does your city do with utilities? If they were owned by a private corporation, do you think you would have more or less influence on them? Would they be more or less expensive? Are these good or a bad things for your community? Those are the important questions to ask.

      • Re: (Score:3, Insightful)

        If it is a choice of Comcast and AT&T vs a local city or county meeting, then I'll have Comcast and AT&T.

        If it is a choice of Comcast or AT&T vs a local city or county meeting, then I'll have the local city or county meeting.

        Private monopolies are generally worse than government monopolies, but private competition is better than both of those.

        • Re:Fail? (Score:5, Insightful)

          by copponex (13876) on Monday June 22, @04:39PM (#28429483) Homepage

          I really don't agree. When a locally controlled government operates a utility, it's not really a monopoly, is it? The job of connecting people to the internet goes to a more open and transparent organization of people that will probably to the same quality of work, but have no incentive to screw a person over for money.

          On a more practical level, what's the incentive for a county level internet provider to charge $100 for installation if they only need $50 to cover the cost? What's the incentive for a for-profit organization to do the same thing? Is that money likely to be used to improve your installation or give the boardroom another bump in bonuses?

          If you feel the county charge is too high, you can complain to someone who can actually change things instead of getting bounced around a call center in India. You can get your friends to attend the committee meeting, sue the government, and even demand to see their books to see if they are charging a fair rate. If it's AT&T you're just shit out of luck.

        • Re:Fail? (Score:4, Informative)

          There is no either or. You can have Comcast, AT&T, the local city, AND some others. This is more or less what we have here in cologne. And the EU is suing Germany, because the Telekom (ex-government) did not open up its net for others.

          The result is, that I can have a 10 Mb flat (and I mean a real flat, without an invisible cap, where your contract is terminated.), with digital TV and phone flat, for 25€.
          Or a 100 Mb flat with a phone flat for 35€
          I call that a pretty fair price. :)

        • Re:Fail? (Score:5, Insightful)

          by dkleinsc (563838) on Monday June 22, @04:53PM (#28429709)

          What if the choices are:
            Comcast - offers you Internet service at $75 / month
            AT&T - offers you Internet service at $70 / month
            Municipal system - offers you Internet service at $30 / month (which is enough to pay for the system)

          Private options in a competitive market can be beaten in all senses by public options if a few conditions are met:
            1. The public organization has to be accountable to their customers via an electoral process.
            2. The public option is required to break even (over a period of time).
            3. The people who go to work for the public option do so because they genuinely want to do a good job. That includes management.

          Something that you need to be very aware of is that oligopolies (e.g. you're left with a choice between Comcast and AT&T and no other options) do not behave in the same way that competitive markets (e.g. lettuce at your local farmers' market) do, because each seller in an oligopoly has a significant amount of pricing power. For instance, airlines used to regularly raise their fares on Friday at 4:45 PM to give all their competitors time to follow suit before Monday morning when the travel agencies opened.

          • Re: (Score:3, Informative)

            Electricity -- I've never lived in an area where the city controlled it.

            In Austin, TX the city runs the electric service. The residential rate is 3.5 cents per kwh for under 500 kwh, and 7.5 cents per kwh over 500. Providers adjacent to Austin average about 10 cents per kwh. Near Dallas (no city power company) the average is about 15 cents per khw.

            Keep in mind that Austin Electric transfers about 10% of their revenue to the city's general fund. The service is good and the rates are significantly less, even

    • Re:Free markets (Score:5, Interesting)

      by fuzzyfuzzyfungus (1223518) on Monday June 22, @03:46PM (#28428529) Journal
      Most of the failed Muni internet setups have been attempts at wide-area wifi. I'd be more inclined toward optimism when it comes to fiber deployments. Wide-area wifi is, unfortunately, a huge pain in the ass. The idea is attractive; but making the tech actually work is a serious headache, at best. Fiber, on the other hand, works pretty well.

      I'm not especially interested in having the government be my ISP(once you get to the peering point, let the market sort it out); but I'd love to seem them handle the "last mile" part of the connection with the same efficiency that they've handled my current municipal utilities.
    • Re: (Score:3, Informative)

      Our electric company (CWLP) is city-owned, and we have the cheapest electricity in the state, and far better service and uptime than any corporate utility in the state (possibly in the region or country). If the city can run a power company, why can't it be an ISP?

      Oh yeah, I guess beciase we're not Minnesota. Different state, different laws, different constitution. The city planned on a high speed internet here, but somehow it never hapopened. I suspect it's because it IS in Illinois and ComCast bribed the

    • Re:Free markets (Score:5, Insightful)

      by Runaway1956 (1322357) on Monday June 22, @04:05PM (#28428917) Homepage Journal

      Yeah, free market is good. And, when there is no market, the city should be allowed to enter the market. That sounds pretty free to me!

    • Re:Free markets (Score:5, Interesting)

      by poetmatt (793785) on Monday June 22, @04:44PM (#28429571)

      They have this pretty damn well planned. I would not assume this will die especially with the competitive pricing they were originally talking about. It was like $100/mo for a triple-play at 100MB/s or something if I recall correctly. Also they have plenty of the smart enterprising type (ones with actually ethics to boot) behind this whole thing.

      You can tell that this has great potential from 2 things:

      1: the doublespeak from the non-muni: "The lack of judicial action on the part of the (Minnesota) Supreme Court will likely discourage other private enterprises from doing or expanding their business in Minnesota".

      Anyone who screams about lost business when the only lost business is their own, is full of shit.

      2:supreme court basically just nullified any potential to enforce a franchise agreement here, and didn't buy the telco BS.. That is huge for good business and this case will expand far outside the state (and has a lot of coverage at the top of google results today too). I guarantee you this has an enormous country-wide impact.

    • Re: (Score:3, Informative)

      Minnesota already has several successful municipal internet stories. The city of Chaska comes to mind off the top of my head.
      • Re:Free markets (Score:4, Informative)

        by compro01 (777531) on Monday June 22, @03:39PM (#28428399)

        Actually, according to all I've heard about this, this will not have any tax dollars put to it. It's financed off non-government bonds, which it will pay back through its own profits.

      • Re:Free markets (Score:5, Insightful)

        by LunaticTippy (872397) on Monday June 22, @04:32PM (#28429391)

        Trouble is, I'm sure there's some bit of our tax money being used to make this failnet, whether or not we as citizens use it.

        Oh good god. There are steaming piles of tax money in the telcos and cablecos, not to mention their monopolies. Tough titties if they can't deal with a little competition.

        If you want to be an idiot at a city council meeting, maybe you should bitch about all the wasted billions we've paid for telecom infrastructure that is now falling apart?

  • A fight (Score:5, Insightful)

    by DaMattster (977781) on Monday June 22, @03:35PM (#28428303)
    If the telecom companies are unwilling or unable to fork out the cash to build a high-speed, fibre optic network, than they have lost their chance! The whole point of a municiple one is because the telco companies put up such a fight against doing it. Now that the city is undertaking the project, suddenly there is an uproar. Too late .... a day late and a few dollars short.
      • Do you think this will foster any improvements from telcos? Somehow I doubt it.

        It seems to me (and I'm neither an economist nor an evolutionary biologist), that competition works on companies much the same that natural selection and competition works in evolution on species: it often doesn't improve either, it kills off the weaker one. TDS isn't going to compete here at all, and that's a good thing.

        Of course, I don't see this replacing telecos everywhere.

  • public broadcasting (Score:5, Interesting)

    by sgt scrub (869860) <saintium@yaho o . c om> on Monday June 22, @03:35PM (#28428327) Homepage

    Public access to the WWW should be a part of the public broadcasting system for the same reasons information should be freely available to a free people. This, of course, assumes that citizens of the U.S. are still a free people.

    • by FireHawk77028 (770487) on Monday June 22, @03:39PM (#28428401)

      It already is, goto a public library and access the WWW.

      • Re: (Score:3, Insightful)

        It already is [free], go to a public library and access the WWW.

        A public library where the internet is provided by a telecommunications company. I think GP wants a Public Non-profit Telecom.

    • by Mordok-DestroyerOfWo (1000167) on Monday June 22, @03:57PM (#28428747)
      I agree completely. Basic connectivity should be considered a necessity in today's world. I would be perfectly okay with my tax dollars going to subsidize a program such as that. If an individual wants more speed, a static IP, no caps (that'll be the day), or some other more advanced features then they are still perfectly able to pony up the money and go with a commercial ISP.
  • Also (Score:5, Interesting)

    by DaMattster (977781) on Monday June 22, @03:38PM (#28428385)
    Even if the Minnesota Supreme Court had ruled against a city-owned and run network there are other ways around it. Be clever, start a non-profit ISP and have them build out the network. Fund it through the ubiquitous government grants that the Obama Administration is giving out towards increasing broadband penetration. Also, fund it through city "Technology" grants. The neat thing about legal loopholes is that they sometimes backfire against those that exploit them.
  • TDS often fails. A lousy service provider with lousy techs. One of their number came into my building a few years ago. They managed to take down two Ts and left before I noticed a third was down. Brilliant.
  • Is there an opinion or some other sort of official documentation to read? Or when they deny an appeal, do you just get a "No" without explanation for why is was denied?

  • Not to worry! (Score:3, Insightful)

    by elrous0 (869638) * on Monday June 22, @03:49PM (#28428611)
    Now the telco's will just buy up some legislators to pass a law against it.
  • TDS tactics work! (Score:5, Insightful)

    by Locke2005 (849178) on Monday June 22, @03:53PM (#28428707)
    TDS knew they were never going to succeed in blocking this, but they DID succeed in delaying the cities roll-out by a couple years! So, the company lawyers have achieved their objective.
    • And they set precidence in the rest of Minnesota for other cities unhappy with their TDS service to proceed with their own networks.

      Win, win!

    • Re: (Score:3, Informative)

      Qwest did the same thing to UTOPIA in Utah and delayed construction for 18 months. They thought they could assert ownership over the power company's poles and refuse to allow UTOPIA to use them. (Yeah, I can't explain the "logic" either.) In the end, they lost the case and won some of the war by forcing UTOPIA to refinance their bonds and put them in a situation where they'll have to call city tax pledges anyway. UTOPIA will still be able to make bond service in a few years, but now they have the PR black e
  • Good (Score:5, Informative)

    by DnemoniX (31461) on Monday June 22, @03:58PM (#28428787)

    I live in Minnesota and worked in Government IT for a decade. I have to say that the state of broadband is sad. The consumers lack the freedom of choice in most areas of the state. Comcast and Quest in the Twin Cities and Charter almost everywhere else. There are a few smaller providers here and there with a minimal market share. The large companies have a monopoly in their respective territories. Although they deny this fact at every turn. A perfect example of this is Charter, in towns where they are the only player you will be charged at a rate that is much higher than in a city where they have direct competition. When this is pointed out they deny the fact and claim the difference in cost is due to the "cost of doing business in that town". Please. A few years ago in Rochester, MN the Public Utility (RPU) decided they wanted to test ethernet over power lines. As soon as word got out Charter had a melt down and had reps at all of the city council meetings crying unfair competition. The phones at city hall rang off the hook and the behind the scenes threats were made. The project was killed. You figure it out...

  • by bzzfzz (1542813) on Monday June 22, @04:17PM (#28429117)

    Internet connectivity in Minnesota is so bad that broadband wireless service, with its slow speed, download caps, and unpredictable coverage, is still an improvement.

  • by phsonnek (1582785) on Monday June 22, @04:32PM (#28429377)
    I was taking business away from TDS, until they got the FCC to allow them to change their tariffs. T-1 circuits for an ISP more than quadrupled overnight. But only for ISPs. If you were the hospital and you wanted a T-1 you got the old rate. I did not have the finances to put up a legal fight; needless to say I was forced out of business. TDS is getting whats coming to them.
  • Television (Score:4, Interesting)

    by rm999 (775449) on Monday June 22, @06:17PM (#28431065)

    "it thought the city had no right to serve people's internet, voice and television needs with its own network"

    I think there is an argument to be made that the city shouldn't be serving television, especially anything public access. With internet and phone the user has full control over the service (assuming a non-tampered connection), but the choice of television stations is highly subjective and could be biased by politicians/bureaucrats. Because the city service will likely be (at least indirectly) subsidized by the tax payer, it may put companies that offer a less biased channel selection under a lot of pressure. This is a bad thing.

    • Re:Wrong (Score:5, Insightful)

      by langelgjm (860756) on Monday June 22, @04:04PM (#28428907) Journal

      The network will be paid with municipal bonds ($25M), these bonds will be paid by the tax money of future residents. This lowers the value of the real estate in the municipality.

      How, exactly? In my state, general obligations bonds are funded by the property tax, and it seems like property taxes go up regardless...

      A quarter of the voters rejected the plan, they are being looted.

      Is the idea that anyone who votes against participating in something shouldn't have to participate it when they are outvoted? Because that's not how government generally works...

      A municipality has no right to exist, much less to pile on debt that it will repay by stealing future residents.

      Why does it have no right to exist? Also, I assume you meant stealing future residents' taxes...

      This is wrong by practically any standard of morality, expect the one where you grant magical super moral powers to governments.

      It might be unwise, and you might disagree with the course of action, but why is it morally wrong, by practically any standard of morality? Considering the projects that many grants that are funded by bonds go to, I'd rather see GO bonds go to something that has broad appeal and use.

    • Re:Wrong (Score:5, Insightful)

      by sribe (304414) on Monday June 22, @04:06PM (#28428935)

      This lowers the value of the real estate in the municipality.

      Sure it does. Just like all the other taxes for all the other services. Police, fire protection, roads, parks, libraries. It's well know that funding any of these lowers property values. It's a fact. Go look it up.

      A municipality has no right to exist...

      Right. People have no right to form a local government in order to provide the amenities of civilization. Wait, you do know how municipalities come into existence, don't you???

    • Re:Wrong (Score:5, Insightful)

      by Abcd1234 (188840) on Monday June 22, @04:07PM (#28428953) Homepage

      A quarter of the voters rejected the plan, they are being looted.

      Wow, 75% of people supported the idea, and you're claiming it's somehow anti-democratic and immoral? Geez. I mean, if it had been 51/49 or something, I could see the issue, but a full three quarters of the population supported this measure. That's a mandate by any standard.

      Besides, if that 25% don't like it, they should move to a more conservative municipality. They voiced their opinions. They lost. I know, it's tough, but they should suck it up, leave, or fight to change the system through democratic means. That's the way the system works (well, save for things that are fundamentally human rights issues, in which case you have to balance tyranny of the majority against the rights of individuals... but this is definitely not one of those cases).

    • Re: (Score:3, Insightful)

      There's nothing in the Constitution that allows government to build roads and bridges, either - but I bet you're happy enough to use them.

      • Re: (Score:3, Informative)

        Please, review your copy of the Constitution. Article 1, Section 8: "To establish post offices and post roads"
        • Re: (Score:3, Informative)

          Please review your copy of the 10th amendment.

          The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

          So trotting out the federal constitution is not particularly relevant here, as this is a municipal project and a ruling (or lack thereof. They declined to hear the case) by the state supreme court. Look to the Minnesota state constitution.

    • Since companies like AT&T have already indicated their willingness to do unlimited surveillance for the government, even when it violates laws, I don't see how the situation isn't already how you describe.

    • Those guys are called telecom companies.

      Remind me, who was it that paid billions to build their infrastructures, give them right of way, and virtual monopolies?

      It rhymes with axeplayers.

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