History of Monticello and TDS: Be Wary of Incumbent Providers

Date: 26 Dec 2011 | posted in: MuniNetworks | 0 Facebooktwitterredditmail

I recently stumbled across some interesting pieces of information between Monticello and telephone-incumbent TDS when the Minnesota City decided to build a city-owned next-generation FTTH network after TDS refused to upgrade its services.

I found a pdf of a flyer that community-broadband supporters used in support of the referendum mandated by Minnesota state law because Monticello would be offering telephone services. The city needed the support of 65% of voters, a unique barrier in Minnesota not found in other states.

The city did go on to win the referendum on September 18, 2007, by a significant margin despite some opposition, much of it based on lies and wildly inaccurate claims. However, Monticello did not see as much opposition as others, like Longmont in Colorado.

After the City began moving forward with the network, TDS filed a frivolous lawsuit in 2008 to delay the project for a year while it began significant investments in its services to ensure it could compete with the new publicly owned network.

Despite being sued purely for anti-competitive reasons by TDS, the City nonetheless reached out to its soon-competitor to cooperate by sharing conduit in some places in town. Such cooperation would lower the costs of both parties and TDS had previously stated it wanted to cooperate with the City where possible.

City Administrator Jeff O-Neil sent a letter to TDS asking if it would cooperate [pdf]. A snippet:

At its July 14 City Council meeting, the Council authorized Monticello City staff to actively seek opportunities to work with TDS in development of cooperative, time-saving strategies for installing fiber optic lines in the City right-of-way. We believe there are opportunities to significantly reduce costs for both FiberNet Monticello and TDS by installing portions of the two systems on a joint basis, involving common conduits rather than separate conduits. Moreoever, at certain locations, space in the right-of-way is at a premium. By merging installation, more space would remain available for future use, and there would be more "elbow room" for maintenance and report of all utilities in the vicinity.

The City Council is optimistic that TDS will also see the value of this approach. That optimism is based in part on past statements by TDS or those working for it. This opportunity had been discussed at the the engineering level by the system designers of TDS's system and City staff and consultant. TDS has recently made public statements that it would like to work with the City in a cooperative fashion.

FiberNet Monticello

TDS ignored the letter, leading to a followup letter from the Mayor [pdf], which reminded TDS of one of its past statements:

We remember the statement that TDS made to the City when responding to the City's Request for Proposal, that "TDS Telecom always welcomes the opportunity to work with other utilities or the city during the construction process to share space in buried facilities to minimize costs, disruption, and deployment timeframes." TDS' refusal to even respond to precisely that kind of proposal from the City certainly contradicts that assertion. It also calls into question the sincerity of the statements made by TDS officials and public-relations representatives about their interests in working cooperatively with the City. It also provides a clear answer to members of the community about which entity is responsible for the inefficiencies that will result when both TDS and the City end up unnecessarily digging up the same asphalt, grass and soil twice.

But, as reported by the Monticello Times, TDS declined to cooperate [pdf]. TDS claimed that to cooperate would be "anti-competitive and likely raise significant antitrust law and substantive policy issues." This is an absurd claim -- but no less absurd than the grounds for their lawsuit against the city. TDS goes on to encourage the City to give up on its FiberNet Monticello plans, as if TDS would continue investing and keeping rates affordable in the absence of competition that only the City was interested in providing.

The lesson for communities is clear: you can try to work with big absentee-owned incumbent providers, but don't be surprised when they lie and obstruct what is best for the community rather than cooperating. They exist to pull as much revenue out of the community as is possible and have no interest in doing anything that could result in more competition for residents and local businesses.

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Christopher Mitchell

Christopher Mitchell is the Director of the Community Broadband Networks Initiative with ILSR. He is a leading national expert on community networks, Internet access, and local broadband policies. Christopher built MuniNetworks.org, the comprehensive online clearinghouse of information about local government policies to improve Internet access. Its interactive community broadband network map tracks more than 600 such networks. He also hosts audio and video shows online, including Community Broadband Bits and Connect This!