Monticello’s revenge

Monticello, Minnesota is the poster child for what happens when monopolies are in danger of losing their monoplies.

The Web site Ars Technica has the story of TDS Telecommunications’ announcement that it will soon provide 50Mbps Internet service over fiber optic cable, becoming one of these cities to have screaming-fast access. The company will also provide a free upgrade for those now on 25 Mbps service and the entire shooting match will go for $49.95.

Writer Nate Anderson has the story behind the story:

But the entire congratulatory press release glosses over a key fact: the reason that Monticello received a fiber network was the town’s decision to install a municipal-owned fiber network to every home in town… spawning a set of TDS lawsuits that went all the way to the Minnesota Supreme Court, which ruled in favor of the town.

The saga began in 2007, when the town passed a referendum approving the city-owned fiber network. The city says that it had approached TDS and was told that no such system would be installed in town in the near future, so it went ahead with its own plans.

After the referendum, the city was sued by the telco just before groundbreaking began. The suit didn’t seem to have much of a chance under Minnesota law, and indeed judges at multiple levels ruled for Monticello. But in the meantime, TDS rolled into town with nine crews of its own and began installing–you guessed it–fiber to the home.

Supply your own comparison with the concept of government competing with insurance companies here.

(h/t: Jon Gordon)