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."
Free markets (Score:5, Interesting)
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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...
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That's too bad, I was looking forward to reading about successful municipal broadband projects.
Fail? (Score:5, Insightful)
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)
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)
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:4, Insightful)
For a project like municipal wifi, where you could have significant swaths of people who neither use nor benefit from it in any way, I submit that the percentage probably ought to be 100%.
i guess you'd have to take a look at what exactly constitutes a benefit. if the competition from the municipal system causes broadband rates to be lower across the board, then the beneficiaries of the system are more than just those who use it. everyone in the town with a broadband connection benefits, and the number of people with broadband connections will increase, that number probably being larger than those who will connect to the municipal broadband.
of course, I'm kind of hardened in this case, since qwest recently told me that i could only get the 7mbps service out of the remote dslam i'm connected to if i use qwest.net as an isp, instead of the third party dsl isp i'm using [the-four-horsemen.org]. nevermind the fact that if i were able to receive a connection direct from the co, i'd be able to choose my isp.
Re:Fail? (Score:5, Insightful)
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.
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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
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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)
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.
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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
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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)
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)
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.
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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.
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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
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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
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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
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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?
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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
You're confusing yourself (Score:2)
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
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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
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Evolution of technology from a tethered limited device to a wireless version does not a failure make.
As to your water -- I hope you did some research and purchase water that doesn't just get bottled right from a municipal tap, as is the case with much of it...
Electricity -- I've never lived in an area where the city controlled it. It's either been a regional commercial provider or a local co-op...
Telephone ... Being replaced by commercial cell towers.
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Electricity -- I've never lived in an area where the city controlled it.
I do - Santa Clara, CA
http://www.siliconvalleypower.com/
Cheaper than the regional commercial provider, PG&E. And when PG&E had to implement rolling blackouts a couple of years ago, SVP did not.
Interestingly, the city is also now provider of free wifi internet access.
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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)
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.
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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
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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)
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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.
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Re:Free markets (Score:5, Insightful)
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!
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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.
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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)
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.
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Re:Free markets (Score:4, Informative)
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.
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I feel like "no new taxes" and "not paid for with your taxes but with [insert another source of presumed governmental income]" is always stated as the funding for any government project. I don't know how they can say that with a straight face when most states' budgets seem to already be in a budget deficit, not to mention an actual funds deficit.
But then, I'm a fiscally conservative Californian and likely just bitter with the last "hey look, we fixed the budget!" statements from the legislature.
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Then the taxpayers pay through the nose. Much like we're paying through the nose for a lot of failed businesses anyway.
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No, you misunderstand how bonds work. If there are no profits, the bondholders lose. Once the money is borrowed, and collateralized by the profits, it's no longer the responsibility of the tax payers.
-t.
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And the city's credit rating goes down, and it has to pay higher interest next time it needs to borrow. And it ends up raising taxes to meet its interest payments on the next loan.
Re:Free markets (Score:5, Insightful)
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?
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when you are business class customer they will do everything short of giving ya BJ cause you pay 2x price for the service compared to home service. as for free market, you look at sweeden, their city fiber network if i remember correct is government owned and leased to the telco's and they offer something like 100mbit for 20euro's. i could be little off on my info.
A fight (Score:5, Insightful)
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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)
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.
Re:public broadcasting (Score:5, Insightful)
It already is, goto a public library and access the WWW.
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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.
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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.
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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.
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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?
Re:public broadcasting (Score:4, Insightful)
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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.
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Uhhhh... also assumes every American has a computer.
???
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Assumptions are all there really is. If there is nothing to assume about a situation then it has already happened. Even then you assume your details of the situation are correct.
Also (Score:5, Interesting)
TDS (Score:2)
Is there an opinion to read on a denied appeal? (Score:2)
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?
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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.
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Not to worry! (Score:3, Insightful)
TDS tactics work! (Score:5, Insightful)
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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:TDS tactics work! (Score:4, Informative)
That would be precedents. Very different thing than precedence.
Re:TDS tactics work! (Score:4, Funny)
That would be precedents. Very different thing than precedence.
But the question is: If you have both precedents and precedence, in what order should they be considered? And are there any authoritative decisions on this matter which we could look to for guidance?
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Good (Score:5, Informative)
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...
Coleman v Franken (Score:2)
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And his math is bad. 8 months after November is July.
Broadband wireless starts to look good (Score:3, Interesting)
Internet connectivity in Minnesota is so bad that broadband wireless service, with its slow speed, download caps, and unpredictable coverage, is still an improvement.
Used to run an ISP in Monticello, MN (Score:5, Informative)
Television (Score:4, Interesting)
"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.
what a mess! (Score:2)
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Re:Minnesota doesn't affect me (Score:4, Funny)
Doesn't affect me either. I live in Kazakhstan, I don't even HAVE internet.
* Sent from my Blackberry wireless device
Massachusetts doesn't affect me (Score:2)
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What about Iocaine Powder?
Re:Wrong (Score:5, Insightful)
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)
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)
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).
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A municipality has no right to exist, much less to pile on debt that it will repay by stealing future residents.
?
So you want all those streetlights, roads, sidewalks, traffic lights and stop signs for free, right?
Municipalities regularly raise cash by bond issues. This lets you have the sidewalk TODAY. You could wait 25 years until the town has saved enough cash - but EITHER WAY you have to pay taxes. All bonds do is let you have your cake now, and transfer the RISK to the bond holder. After all, the owner
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So you want all those streetlights, roads, sidewalks, traffic lights and stop signs for free, right?
Well, it would be best if those things were paid for only by people who used them. But even if we concede that it's ok for municipalities to spend everyone's money on one thing with a simple majority, that does not necessarily mean that they have the moral authority to do so on any old thing.
Everyone benefits from roads. Even those who don't use them, because the roads allow the ambulance to reach them in time, or the fire department to extinguish the neighbor's fire before it affects your house.
The only
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No it became overvalued because people would pay for it. If people weren't willing to pay it would not have gone up. It has now dropped because people are no longer willing to pay that much for it.
Would you rather have government rationed housing. Sure it's all the same price, but you have to get on the waiting list when demand is high, even if you have extra money and are willing to spend it to get into a house sooner.
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except that in this case, 74% of the electorate in the city voted to authorize the construction of this network. in effect, creating a municipal internet service is not only the right of the city of monticello in this case, but its responsibility.
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so, the city council, having been duly elected by the citizenry of the city, not being encumbered (as others have pointed out) by a constitution limiting the power of the federal government or the state government, sets forth a referendum to the electorate of said city, presumably in accordance with the laws of said city, and the city overwhelmingly approves it. provided this action isn't limited in the city's charter how is this not within the law of that the city is allowed to do? it seems to me that cali
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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.
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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.
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Article XII
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.
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Article 1, section 8:
Section 8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
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I don't think muni internet falls into any of the Constitutional requirements or powers granted to the gov't by the people.
I don't think muni *anything* falls under the Constitution, which only outlines powers and restraints for Federal (and to some extent State) governments.
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So, yes, while the government did not win an affirmation of its rights in this decision, the People, acting together as a municipal governing body, preserved their right to establish and maintain infrastructure when no players in the market are willing to do so. TDS initially declined to build a fiber network in Monticello. Only after the city decided it would provide its own connectivity did TDS suddenl
how are private ISPs any better? (Score:3, Insightful)
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.
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If a city owns a citywide network it's a short step to implementing redlight cameras, surveillance cameras, facial recognition software, automobile tracking, etc.
Ah, so none of those things will happen if we nip this municipal ISP thing in the bud, right?
Given some of the content of the intertubes ... (Score:5, Funny)
We debated this back home in '63, but it was sewers instead of intertubes.
Given much of the content of the intertubes, perhaps it is still the same debate.
I love libertarians (Score:3, Insightful)
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.