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Minn. Supreme Court Upholds City's Right To Build Own Network 252

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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Minn. Supreme Court Upholds City's Right To Build Own Network

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  • Free markets (Score:5, Interesting)

    by dburkland (1526971) on Monday June 22, 2009 @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)

      by Red Flayer (890720)
      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...
      • by roc97007 (608802)

        That's too bad, I was looking forward to reading about successful municipal broadband projects.

    • Fail? (Score:5, Insightful)

      by copponex (13876) on Monday June 22, 2009 @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, 2009 @04:02PM (#28428853)

        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 [] or $20 million on an empty performing arts center which is in danger of losing over $1 million this year []), 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, 2009 @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, 2009 @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.

        • Well, see it like this: At least with government, there is a chance that you won't completely get screwed over, and that they will do something *for* you. A company by definition tries to take as much from you as possible, while giving back as little as possible.
          Also, at least in theory, you can fire your government, and vote another one in place. Try that with a company.

          I see todays companies more as feudalistic empires than as anything else. Including the all-powerful king, his knights, the castle, the pe

      • Re: (Score:3, Insightful)

        by jonbryce (703250)

        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, 2009 @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.

          • by Z34107 (925136)

            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?

            It may only cost the for-profit ISP $50, but it might cost the public ISP $100 for the same hook-up. At least if the cost is too high, it doesn't sound like anyone will have to move - if they actually make a profit and pay back their bonds.

            You say they'll have "no incentive to s

          • by kimvette (919543)

            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?

            It depends. Do the fees paid for the service get deposited to the general fund, and do(es) the cost(s) of those services get paid for out of the general fund? If so, then the

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

          by Hurricane78 (562437) <> on Monday June 22, 2009 @04:40PM (#28429491)

          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, 2009 @04:53PM (#28429709) Homepage

          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.

          • by jonbryce (703250)

            Comcast reduces their price to $65 per month to grab a load of AT&T customers.

            AT&T reduces their price to $60 per month to get customers back off Comcast.

            And so on down to $30 per month.

            That's what happens in a genuinely competitive market place.

            • by dkleinsc (563838)

              Except that they don't actually do that under most conditions.

              Let's say that the market is divided with about 3500 of A subscribers at $75/month and 6500 C subscribers at $70/month. If A reduces their price, they can swipe 30% of market share from C, but that will start a price war with C reducing the overall price to 30 (the actual cost to provide a month's worth of service). Since A knows this, and it is more profitable to have 3500 of the market at $75 than it is to have 6500 of the market at $30, they w

      • 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.

        What? Are we living on the same planet? The government and efficiency are essentially contradictory terms. The private companies don't want to compete against the government because the government does not go away even if it loses money on every transaction. It is not a fair competition and the consumer is the big loser since public money goes to fund a service that will be worse than the private service, yet paying for it is not optional for those who choose not to use it; sort of like the situation with p

        • by copponex (13876)

          Just a few points.

          Public education is doing poorly because the US ended trade skills training and tries to force everyone into college, and because it's low on our list of spending priorities. Education spending has been stagnant compared to the spending on imprisonment, the military, and transportation.

          If you think that Blackwater or other private contractors in Iraq provide better service for less money than the US military, you're delusional or misinformed.

          The Soviet Union imploded because of corruption

        • by AK Marc (707885)
          I defy you to name one government program that has provided better quality, cheaper access, and more efficient service than comparable private sector businesses

          Social Security. There exist no private invenstment firms that have a money market mutual fund with overhead as low as SS. None. For the management per dollar for a minimally-managed investment account, SS beats all private firms. Oh, and have you compared the cheapest USPS rates with everyone else? What's the percentage difference?
      • Are you completely ignorant of economics, or just trying to pick a fight?

        The suggestion that the government is more efficient than private enterprise is laughable. The issue is that private enterprise cannot compete with an agency that can tax and that has endless guaranteed reserves. When the "price" is a forced fee, regardless of whether the service or product is consumed, then the consumer might as well consume, right? Further, if they pay $x already for service from taxes, then they'd have to come up wi

        • No one is saying that every person should be forced to pay for internet service. Small local governments have a long track record of running utilities effectively. If you don't want county water or sewer, you don't have to pay for it, but then you won't get service. The same thing can be done for internet service.

          My suggestion is what it is: a well run, policed, open, self-supporting internet utility is not a bad thing, especially when the local community wants it.

          If you think public universities are doing

          • If it is truly not funded 1 penny by tax dollars, then I am all for it.

            I can't answer your question about the UK system because I really don't know details about it. I can list out the reasons our public education system fails in the US, though. And I think it is clear that private education is superior, at least until 8th grade (I'm not so sure, once you get into high school where diversity in electives allows students to seek the path they wish -- but then again, the lack of such diversity in private scho

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

      by fuzzyfuzzyfungus (1223518) on Monday June 22, 2009 @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)

      by mcgrew (92797)

      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

      • by ericrost (1049312)

        Just be thankful every day of your miserable (but not so bad as mine) life that you don't have to deal with Ameren on a regular basis. (Also IL here)

        • Ameren is horrible. I remember a few years ago when they had the huge outage in the St. Louis area due to the freezing ice wrecking havoc on their undermaintained power lines (right after a summer of having the exact same thing happen during storms). During the winter, I was without power for about a week, and some were without longer than I was. I'm pretty sure people died during that. And what happened to Ameren you might ask? Some sort of sanctions or negligence charge or even an investigation? Oh,
      • by ArsonSmith (13997)

        Is it really cheaper though? How much of it is subsidized? Not just from city, but from federal funds that you may not ever see reported.

      • Re: (Score:2, Interesting)

        by kirillian (1437647)
        I work in Lincoln, NE. Fiber is offered - by Time Warner Cable only. However, 10 years ago, before Time Warner Cable even laid fiber line, another company LES (Lincoln's municipal electric company) already had a fiber network over the entire city and was planning to offer it to customers. Time Warner lobbied the state legislature to make the use of said fiber illegal. Now everyone is paying Time Warner's lobbying bill back since Time Warner's internet offers are the only viable options for the area...and th
    • Re:Free markets (Score:5, Insightful)

      by Runaway1956 (1322357) on Monday June 22, 2009 @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!

      • Absolutely. As long as I'm free not to choose not to pay for it and every citizen that chooses to pay for it pays the same.

    • by bahwi (43111)

      Hey, our Muni wifi is a success. A few friends use it(and love it) as they have internet all over the city. Some people don't like it(too slow, customer service). Those complaints make it a success since you can say the same for Comcast/Qwest very easily. Of course the muni wifi (it costs, by the way) came out and fixed my friend's internet for her when the modem was broken, rather than sending a package and hoping for the best.

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

      by poetmatt (793785) on Monday June 22, 2009 @04:44PM (#28429571) Journal

      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)

      by saleenS281 (859657)
      Minnesota already has several successful municipal internet stories. The city of Chaska comes to mind off the top of my head.
  • A fight (Score:5, Insightful)

    by DaMattster (977781) on Monday June 22, 2009 @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.
  • public broadcasting (Score:5, Interesting)

    by sgt scrub (869860) <saintium AT yahoo DOT com> on Monday June 22, 2009 @03:35PM (#28428327)

    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, 2009 @03:39PM (#28428401)

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

      • Re: (Score:3, Insightful)

        by Culture20 (968837)

        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 mea37 (1201159)

          More correct to say "a public library where the internet (access) is bought from a telecommunications company using public funds".

          This is the same as how libraries get their books - there is no government publication house stocking libraries with information. And before we start arguing details of how the analogy might be better formed, how about focusing on the important point: the governmetn's role is the same in both cases - it provides the funding, end of story.

          • it provides the funding, end of story.

            Provides... how about, appropriates. I'm not sure the government "provides" money. I'm fairly certain I "provide" the government with the money that it uses.

      • by iamhigh (1252742)

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

        If the medium used to gain information has changed radically, couldn't the means of delivery also change?

    • by Mordok-DestroyerOfWo (1000167) on Monday June 22, 2009 @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.
    • 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.

      1. Public Broadcasting? Like PBS? The government doesn't run pbs. It grants some funds to it. Otherwise, PBS is independent, and funded by viewers. Same for NPR. From what I understand, this story is about a government run network.
      2. Don't you worry that government run networks would be censored for political purposes?
    • Uhhhh... also assumes every American has a computer.


  • Also (Score:5, Interesting)

    by DaMattster (977781) on Monday June 22, 2009 @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.
  • by Stargoat (658863)
    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?

    • by danzona (779560)
      Typically, the SCOTUS does not comment when it denies a petition.

      But there is an opinion to read, that of the lower court which last heard the case. By denying, the SCOTUS is saying that the lower court got it right.

      Although I think that in this case you may have to recurse through several court levels to find one that actually rendered an opinion. I think that all of the appeals by TDS were just rejected as being a waste of everybody's time.
      • by danzona (779560)
        Sorry to reply to myself, but on further reading I realize that I should have said MSC, not SCOTUS. But I think the process is the same.
  • Not to worry! (Score:3, Insightful)

    by elrous0 (869638) * on Monday June 22, 2009 @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, 2009 @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)

      by ElForesto (763160)
      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, 2009 @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...

  • The Minnesota Supreme Court shouldn't be doing anything else but finishing their ruling on Coleman v Franken. It's been three weeks since they've heard oral arguments and over 8 months since the election took place.
  • by bzzfzz (1542813) on Monday June 22, 2009 @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, 2009 @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, 2009 @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.

  • looks like this submission is infested with astroturfers from various service providers, they can all go to hell, if a local government wants to offer internet it is a good thing,

"For the man who has everything... Penicillin." -- F. Borquin