back to article US telco: 'Public broadband is illegal'

Like dozens of other communities across America, the tiny town of Monticello, Minnesota wants to build a fiber-optic broadband network. In September of last year, its citizens approved the project via referendum, with 74 per cent of voters giving the nod. But thirteen months later, its fiberlicious dream is still on hold, thanks …

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monticello to pigopolists.....

Your shipment of fail has just arrived. If you just like ot pick it up from reception.....

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The great American free competition system..

....works great until someone tries to actually implement it.

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Say

Say , was this not the very same telephone company's General Manager that told the towns resident delegation in no uncertain terms if they wanted faster and better internet services that fibre optic cable can offer to literally "take your A***e out of this office and put your head in it as we have no intention to offer any expensive equipment upgrades at this point in time .

Sounds like a good case for "quid pro quo" .

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What a bunch of c*nts

I hope everyone in that town decides to change telco provider to show them how unimpressed they are.

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Sad, very sad

Can I just say, with sadness not with malice, that you have a very, very strange country indeed.

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I do hope...

that TDS get their corporate arses well and truly kicked over this abject nonsense. So much for the 'free market' values in the US.

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Pirate

Incentive?

Sounds like a good incentive scheme here: let everybody know that you're gonna build your own network and you can almost guarantee that it'll annoy an incumbant enough that they'll start work right away! Everybody get's the cable network and the city gets a big lump of cash!

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Get gun, take aim at big toe

They have certainly pissed off enough people that a lot of potential customers will avoid them like the plague.

No doubt the next step for the telco to do what a certain "low fares" airline does and undercut until their competitors have gone out of business and then jack up the prices.

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Unhappy

But the telco has the head start

As pointed out the telco now has successfully delayed the public project while it gets on and lays the fibre. Hopefully the citizens will be happy to wait and use the public initiative rather than the telco one because once people have signed up to the telco offering they are unlikely to switch to the public one.

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Joke

I wanna....

....go to Escrow. There seems to be alot of stuff waiting there

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Unhappy

gah!

By the time the appeal chain is run out, the telco will have completed enough fibre laying that they will be able ot take out a new suit that argues publicly-funded internet access is not necessary.

Presumably they'll bag all the best cable runs, so the Municipal project will overrun on costs.

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Why don't they

Just withdraw all of the offending company's construction permits? Oh, I'm sorry, you can't put fiber in the ground there, you seem to not have a permit. Now maybe if you dropped that lawsuit we could sort that little problem out.

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Flame

Just another proof

The public copper/fiberoptic networks, built for taxpayer money, should be confiscated by authorities worldwide. Today, this network is a necessary part of public infrastructure, and as such should NOT be in the hands of blackmailers trying to extort as much money as possible from them.

And it's also a proof USA has too many lawyers (we're starting to get the same problem here)

//Svein

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Alert

wouldnt it be good if

The government built a comms network for the good of the people, same with things like water, gas and electricity what about a public transport system that runs on rails and goes under the ciry...... oh hang on............curse those Victorian geniuses...and damn those who flogged it all off.

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Save the blacksmiths!

Ban the railway now!

Substitute whatever the latest incumbent being threatened by new technology may be.

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Maybe they have a point

No intention of using tax dollars? How will they redeem the bonds?

So it's still tax. And it's still stealing from the people who voted no. And government projects always cost more than private ones anyway.

You might ask why the telco doesn't build a fibre network if so many people want one. But there will be obstacles: planning regulations and the risk that some government scheme will build an alternative and undercut them spring to mind. And a telco's profits get taxed, so their financial risk from developing infrastructure is higher, thanks to the same government that seems oh so generous in this story.

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Unhappy

@ wouldnt it be good if...

and damn all the sheeple who bought the shares (in something they already owned), then sold them on for thirty pieces of silver to the big corporations who really wanted them, but couldn't have bought them openly from Maggie without the shit hitting the fan, big time.

Undoubtedly one of the biggest cons ever perpetrated.

And still we're blinded by greed (look at what's happening around us now).

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Anonymous Coward

eh?

I can see the point the first time a telco tried, and maybe even the second time.

But nowdays shouldn't the telco file the thing and then it goes in the bin becouse the case holds about as much water as a sivve? I mean there's no point in trying the case if the answer is going to be the same "yes the council can do it, and so can anyone else if they can afford to."

Am I being naive here?

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@ Rob Fisher

"... stealing from the people who voted no." Well, majority rule is considered fair, especially 72%of the town's voters said 'yes'. The minority is disppointed and things are done against their preference, but it's not stealing, it's just the way things work. In ancient Athens, the democratic vote had to be unanimous or it didn't happen, but that was found to be unworkable over time, thus the current system.

Not getting your way in a vote is not a crime done to you. To characterise it as a crime is then to justify you in using whatever means possible to get your way. That's when some folks take the go-postal route.

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Paris Hilton

just goes to show

That idiots rule the world. I keep banging on about the "Internet, Internet, Internet" to paraphrase our beloved former Prime Minister, "You gotta have internet", then there's an about turn by the same organisations, in us Brits case, "Ooh, hang on think of the children". Right hand Internet, left hand, No internet. What's it to be? Either we have it or we don't. As Svein says, access (disregarding content) is now part of the economy whether governments telco's, etc. etc. as *they* made it that way.

Paris, as even she has good infrastructure.

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@Hollerith

"majority rule is considered fair" until the sheep are in the minority and the wolves are voting on what to have for dinner. A crime is a crime whether or not the majority voted for it. And it's not "using whatever means possible to get your way" to suggest that people might prefer to *voluntarily* pay for services they want from those voluntarily offering to provide it.

The best thing a small town can do to improve network infrastructure is offer tax breaks to any company in that business and get planning regulations out of the way. But that doesn't create many jobs for politicians.

I find it odd that Reg readers are so critical of government IT schemes like ID databases but now want the same people to be building our network infrastructure.

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Pirate

last mile

I've always been of the opinion that the "last mile" from punters' houses to the local exchange should be owned by the punters themselves (whether individually or as part of a community/commons ownership scheme), rather than having to pay for "line rental". I know this would upset the telcos (a bit of an understatement), but it's not as if they would be put out of business... they've still got the expertise in laying and maintaining comms cables, and can still fight it out amongst themselves to provide you with access to data and phone networks in the server room (though LLU is still more myth than reality in many cases). In short, let competition take place at the edges, but let the users own their edges.

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Col

@Rob Fisher

Revenue bonds are "...a special type of municipal bond distinguished by its guarantee of repayment solely from revenues generated by a specified revenue-generating entity associated with the purpose of the bonds." (Wikipedia) The people who voted no, or didn't buy bonds, can still pay to use the resulting fibre, but naturally they won't receive a dividend. They won't, however, be losing out. And to say that anyone voting against something is being "stolen from" when it is implemented is disingenuous.

And the telco is building a network. The court case is a transparent attempt to delay the municipal scheme so the telcos fibre will be in place first - because in America, first you get the lawyers, then you get the power, then you get the commercial advantage and step on peoples faces. Or something.

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@ Rob Fisher

"... stealing from the people who voted no."

by that logic I can ignore all laws passed by this goverment who I did not vote for if you lose the vote you lose the vote you had your say now shut up

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@Col

My reference to stealing was regarding the tax that would have to pay off the bonds. If you're right and they are paid off solely from the profits from the resulting network then the situation is somewhat different. It sounds more like the government is *becoming* a telco.

I'm still not very happy, though. How can a government telco fairly compete with a private telco when it has the power to set whatever regulatory hoops it wants for its competition to jump through? If people complain about big companies having too much influence over governments they should complain even more loudly when the big company *is* the government.

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Linux

@ wouldn't it be good if....

Remember old SuperMac's quote about "selling the family silver" - even old Tories knew it was wrong. That & the unfettered "Right to Buy(then sell to Rachman-alike private landlords)" any & all social housing stock are the roots of any "broken society" that exists now.

We're bang in it now.....

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Col
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@Rob Fisher

From my admittedly pefunctory reading of the details available at www.monticellofiber.com, the government has indeed set up a telco - of sorts.But being majority owned by the people who will be benefiting from its product, rather than money-oriented shareholders, likely means it'll be a far more pleasant experience dealing with it than any other telco you could name.

It'll still have to jump through the same regulatory hoops as it's privately owned partner: in fact, chances are it'll be far more stringently audited cos you'd better believe that the "competition" will be keeping a damn close eye on them for any infractions.

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Tom

@Rob Fisher

There are numerous examples of these sorts of enterprises, going under different names, I think the most frequent is co-op. So long as the co-op is distinct from the government, and so long as the co-op is regulated by the same rules as the commercial enterprise, there is no problem with fairness. The TVA is probably the most prominent co-op arrangement in the US. Many utility arrangements, especially water and sewer, actually fall under this aegis in the US, and most work pretty well. And almost all of them resulted from some moron at a commercial enterprise saying it was too expensive to take the chance of providing X service when X service was some new fangled "luxury" service. Generally speaking, I'm pretty much about as free market as you are going to find, and frankly, what Monticello is doing is fine by me, as long as both entities have to follow the same rules.

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Dead Vulture

@Rob Fisher

I think you might fundamentally misunderstand how bonds work.

In this case, the public are given the choice to buy bonds in the new cable endeavour, or not. If they do, they can cash in those bonds at any point for at least the original investment (they can then be bought by another member of the public).

If they don't buy bonds, they can still use the cable network, they just dont part own it.

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there are two sides to this story

As far as the whinging about the "majority vote"...that is somewhat problematic, since you always have the problem of an adolph or dubya being voted into office and running the country down a rathole.... hopefully there are other checks and balances in place.

As far as the whinging about city owned fibre...that is substantially less problematic as they city most likely runs their own roads, trash pickup, sewers, water system, etc. This is easily considered a "utility" for the public good that falls with the others. Your roads are connected to the state and federal roads; your fibre is connected to the telco fibre or available long distance carrier(s) or local ISP(s) or local "cable" provider(s). what's the problem here?

The problem is the local telco which was asked repeatedly to put in fibre and flatly refused to do so and only took action to delay or destroy the efforts to the near 3/4 of the populace who wanted fibre. the next step is to make the telco pay through the arse for what they have done.

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As usual...

The primary winners through all of this will be the lawyers.

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Unhappy

@Random Noise

It's a small town, so there's probably not another telco provider to switch to. Thank god for Dish Network, but they have a lot of issues too.

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Happy

Corporate crap

Delay tactic designed to slow down the creation of public fiber so that the telco fiber is up first? Wouldn't it be funny if the citizens refused to purchase service from the telco? LOL!!!!!

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J
Black Helicopters

"... stealing from the people who voted no."

Welcome to democracy, the dictatorship of the majority.

Now shut up and do as the majority decided.

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Anonymous Coward

@Rob Fisher

They town isn't providing internet access, just last mile physical access. Anyone can come hook up to the town's exchange and provide service- Thats why the AT&T(or verizon?) wholly owned incumbent is scared.

They are also using something like 9 teams to race and install this network which they in more then uncertain terms said no, we will never install it. Thats about 7 more teams than most much larger communities get. Wonder why.

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Who will suck more?

New "fiber" services in the US usually go along these lines:

Telco - 7Mbps, one dynamic IP address, 5 free webmail accounts, free Yahoo or Google account, PPoE, incoming traffic prohibited, filesharing prohibited, 1.5GB/mo bandwidth cap, bundled premium content SDTV, bundled phone and long-distance, bundled DRM music service, no QoS, web content may be monitored or altered for advertising, $195/month.

Local Government - Hiring more consultants to cope with project delays and budget overruns.

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our Fiber initiative in Lafayette

Yes, we were one of the first cities to try and build a fiber network and, so far, plans seem to be bopping along... the interesting bit was when we started.

BellSouth (prior to the AT&T accquisition) filed a suit, just like you would expect a Telco to do.

Cox Communications, on the other hand, decided to compete! I have cox at my house for cable, internet, and phone and... you would not *believe* the amount of advertising that cox does to its own customers! During almost *every* commercial break on almost *every* channel (that has commercials) there is a 30 second Cox ad that talks about Cox Advanced Fiber.

Additionally, at least once a show there is a 30 second Cox ad that talks about the DTV switchover and how "you" (the cable-viewing customer) doesn't need to do anything about it. They seem to be pitching themselves as the solution to the switchover, as there's no mention of the converter boxes to pull down the broadcast signals.

So... while Cox customers are always a little baffled when their rates go up 6 months after they sign up (didn't you know that was a introductory offer?), at least they're not lodging frivolous legal complaints to try and stop real progress.

:)

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Anti-government dogma detectors are high in this sector

Kevin McMurtrie elected to say:

"Telco - 7Mbps, one dynamic IP address, etc.."

vs.

"Local Government (will be) Hiring more consultants to cope with project delays and budget overruns."

You are comparing the end result of a project implementation with risks associated with project implementation.

So, what's wrong with local.gov implementing infrastructure? Nothing at all - especially if the local telco cannot be arsed to do it itself. And it's kinda easy, too. Just put out a call for tender at fixed (but reasonable) price, select the private company which will build your stuff, then follow the project closely and continuously.

In this case, local.gov should probably have sued the incumbent first for refusal to provide reasonable service, and THEN started building.

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Pirate

They blatantly admit their own guilt.

>"This decision does not impact our current work in the city of Monticello," the company says.

So, if it doesn't impact them one way OR the other, that's an out-and-out admission that their case was utterly spurious and without merit. Vexatious bastards. They can't have it both ways at once.

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Anonymous Coward

freeze the telco too

Why didn't the local government counter sue, seeking an injunction to prevent the telco from installing its own network until judgement had been reached on whether a local government network is legal. If that is not possible, it should be, I think it would dramatically reduce the frequency of Telcos using spolier tactics to maintain their monopolies.

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playing dirty

The city could refuse to issue dig permits. If the telco digs anyways , send the police to arrest the workers

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Anonymous Coward

BT

Public wi-fi networks, (free of charge?) I wonder how BT would react to that.

No need to endure the cost of laying down new copper. BT would panic if the public wi-fi concept took off here.

Perhaps wi-fi could be a solution to the crap data rates we get using BTs twisted pair copper loop infrastructure. About time they had some worthwhile competition.

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Anonymous Coward

RE: Hollerith

Hollerith wrote

"I find it odd that Reg readers are so critical of government IT schemes like ID databases but now want the same people to be building our network infrastructure."

Why do you find it odd? It's quite simple really. We do not want the ID database scheme mainly because of the privacy issues that it creates and the associated security risk.

(Yes, it likely to go way over budget and overrun and it probably won't work properly, that's government run IT projects for you.)

We do want new internet infrastructure because of the benefits that give us.

So, you see, it's nothing to do with who's doing what, it's to do with what the what is.

How else can it be any other way?

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Anonymous Coward

RE: Destroy All Monsters

Destroy All Monsters.

Nice post, but your final point is incorrect.

"In this case, local.gov should probably have sued the incumbent first for refusal to provide reasonable service, and THEN started building."

If a telco doesn't want to provide a service - for whatever reason - but let's say because they don't think it's commercially viable then they have the right not to implement the service. They can't be sued for it, unless there's been some previous agreement where they've said they will do it.

You can't force a commercial business to spend money providing services which they will knowingly lose money on, it's crazy - unless there is government legislation of some sort that says they must provide the service, even at a loss.

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Anonymous Coward

The whole picture

If you look at what's going on, the whole picture, it's pretty obvious what's happening. It's a delaying tactic being used by the telco whilst they make use of the time to lay down their own infrastructure.

Whether the local government can then implement their own network when there's already one provided - the justification for spending tax payers' money is weakened and who knows what's written into the rules of local government there - value for money etc.

The problem here is that, it's obvious what's going on, but you can't standup and say that in public, and the court cases are about individual specific actions taking place. What needs to happen is for a judge to look at the bigger picture, recognise what's really going on and put a stop to it.

If local.gov. were to turn down any planning applications to dig tunnels, lay cables, if local.gov were to refuse, the telco would then commence legal action against the local. gov, yet, we all know exactly what the telco is doing. It's trying to destroy the plans of the gov. to install its own network.

The courts need to look at the overall picture. But, no-one's going to be able to stand up in court and voice concerns about the strategy of the telco without having any hard evidence of what's going on. Having a suspicion of what the telco is up to isn't going to be accepted.

If I lived in that town I'd refuse to take up the new wi-fi service with the telco and encourage everyone else to do the same, to cause them to lose a lot of money.

It reminds me of a dirty tactic being used by a large supermarket chain here, having another company buying up premises on their behalf so the true nature of what was planned in the future wasn't clear and the supermarket chain keeping a low profile, the fact being if the supermarket bought the premises, the change of use application to the council would have been rejected. Underhanded tactics.

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I feel this will only shoot up costs of similar service & discourage competition

What I feel about all this:

If you only have 1 provider (and usually its the cable company) who can offer all 3 services, then I see your pain. They can pretty much charge what they want.

When there are 2 providers though, you now have it where they can make enough money to want to give you the best of everything cause with the money to be made, they don't want to lose you to the other. Can both competitors decide to charge the same thing, yes, but usually the only time they keep certain operative costs for service the same is if there is a justifiable reason for it. For instance, and this is just ficticious; carrier A charges $60/mo for 10/2 internet but carrier A says, hmmm, I can do that for $45/mo and pick up more customers, then carrier A lowers their price to match, but, if it cost both of them at least $40/mo in operative costs to deliver the service, neither will go lower cause its not good for either of them. This shows that 2 providers offer great packages at fair competative prices and if you want a perfect example of that, look at Long Island, NY, home to the competitors, Cablevision Optimum IO & Verizon FIOS. Both offer great packages with many HD channels, fast internet and reliable phone service for what is now, a fair price.

3+ competitors.. bad idea.. more competition is not always a good thing cause if there is not enough to be made, then it doesn't pay to either, build out there, or offer great packages. Think about it, look at the previous example. If it costs $40/mo for me to offer the internet 20/5, im not going to offer it at a loss for $30/mo and most of the costs of the internet is the end fiber to the customer.

To summize, bad, bad idea to self build a fiber network unless it is part of a plan to hand it over, maybe, to the telco in return for free months of service to pay it back.. ok, non tax dollars.. whats going to pay for fibering to every persons home, the cost of the power to keep the signalling on, the cost of the equipment, the cost of fees to hand data off to other carriers, the sometimes astronimical cost of replacement and maintenance. Your going to tell me that none of this will cost a single tax dollar and if it didn't, would it be much different in the end in cost then the provider charges, I wouldn't think so. Also, thats just to get the internet, forget about the cost of reliable phone if power goes out or in terms of TV, content, franchises, settop boxes, flash upgrading, checking into issues and new innovation and i can go on but I think I made my pointI

A lot of people think that the internet can carry phone, voice, video.. be careful not to overload the net with fantastic responsability for which it wasn't intended for or downloads may drop to 1kb/s. The message I think your sending to them is, "telco, wherever your going to build to bring competition here, please leave us for last!"

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Stop

what about this idea, could this work....

Here's a suggestion..

I think this might be a middle ground that does work.. what about building the network & selling it to the telco. In return, every other month, the telco would pay the gov't back until they own the fibers purchased. Issues such as brand and installation would be determined ahead of time as well as a timeline, the telco would be responsable to maintain it from the start. The government & the telco should reach a video franchise agreement which would involve video and a schedule for when service will be delivered to different areas.

One of the problems too is smaller telco's also struggle for the monies for building the inside as well. The one Telco for the government to contact on this along with the local Telco would be Verizon. They already have a semi national network across many states that can handle triple play and getting franchises is nothing new to them.

If a deal could be worked out where the local Telco could somehow tap off Verizon's video network (of course, it would have to be worked out exactly what they can carry, where they can carry it and what channels they would be allowed to offer) and internet backbone to offer FIOS like service over the fiber network mentioned above. 60% of all the revenue would, in a fair fashion, be divided between the government to pay back the investment made to add the fiber, Verizon for extending the services to the local telco & paying the content providers on a per customer basis to be permitted to carry the content. 30% would go toward their maintenance costs both inside and outside as well as the cost of the ONT and the set-top box(es). 10% would be the revenue stream for the local Telco.

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Another government freebie.

Someone correct me if I'm wrong , but I think a revenue bond is an indirect tax as the bond eventually has to be paid by a taxpayer . Gov'ts should not be in any business if for no other reason they are in subsidized competition with taxed businesses ( Leave out for now the fact that businesses don't pay taxes) , and it will distort the market . Markets don't like to be distorted. ( See US mortgage scandal ) .

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@Hollerith

Poor beat up ole Rob Fisher. He must be one of the few not a socialist there. Soon he will really be lonesome as here in the USA we will soon be a full fledged socialist country too. Where is John Gault? ( Atlas Shrugged ). As for democracy , I'm sure the two wolves thought it was wonderful too when they and the one sheep voted on what to have for supper. You guys don't fret , soon we'll all be socialists and equal and all living at a much lower standard of living. Except for the rulers .

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Re: I feel this will only shoot up costs of similar service & discourage competition

There are lots of ways that a locally run data network could be implemented without locking private entities out of the market.

One example would be to offer wholesale access to the network to other parties. While the private telco might not originally have been willing to invest in creating a high speed network, they might have been willing to offer service over an existing network. Due to the lower start up costs, this would also make it easier for other companies to enter the market and service the entire community (I'm not sure why you see more than 2 suppliers as being a problem).

As for selling off the infrastructure, that seems to be a case of "privatising proffits while socialising losses". If the private entity didn't feel it was worth the risk to build the network, why should they benefit from its success? I assume you don't feel that private entity should pay if the project fails, right?

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