But Wait, Wasn't Muni-Fiber Supposed To Take Away Incentive For Private Fiber?

from the caught-in-a-lie dept

Over the past few years, there have been numerous lawsuits by telcos against various municipalities that have decided to launch municipal fiber broadband projects. Most of these lawsuits have failed -- but the main argument from the telcos is that it's unfair to have to compete against the government, and it would take away incentives for the telcos to actually invest in infrastructure to provide for those towns. Of course, that doesn't make much sense. That would mean that any competition would decrease incentives to invest. One of the nastier legal battles took place in Monticello, Minnesota, where the local telco TDS fought hard (and lost) its battle to stop muni-fiber from showing up. But, now, suddenly TDS is announcing its own fiber broadband, giving people 50 Mbps service for $50/month. What's the likelihood that TDS would have done this if it didn't have competition from muni-fiber? The reason municipalities look to muni-fiber is because there isn't enough competition and the telcos aren't investing in infrastructure (or really serving customer needs). So the end result here is that by introducing more competition, consumers and citizens are better served. So what's the problem with it again?

Filed Under: broadband, competition, muni-fiber
Companies: tds

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  1. identicon
    Pierre Guillery, 31 Oct 2009 @ 1:51am

    Telcos need a nudge, dont they? See what happened in France

    What has happened in the USA in Chattanooga, Lafayette, Dalton, and again in Minnesota, is exactly what happened in France (this socialist country Americains love to hate!) since 2004. Between 2001 and 2003, we asked politely the incumbent (France Telecom) to do something about ADSL. They lied, lobbied, threatened, stalled... Then in 2004 a law was passed that allows municipalities to build their own networks when private carriers won't. Guess what happened since? France Telecom (and a few others) compete with muni-owned networks, and 98% of the poupulation has access to a minimum of 1.5Gb for 30 euros a month. Now that the 2004 law is firmly in place, the same is about to happen with fiber. Everywhere around the world, telcos need a nudge...

    Another thing: something as important to our country's competitiveness and growth and to our fellow citizens' education and well-being, shouldn't be left solely to "competitive forces". Because it is real clear by now private firms work for their shareholders, not for the public good - meaning they won't invest where it doesnt make economic sense to do so. We shouldn't hold it against them, that's the nature of the system. But let's stop fooling ourselves: fiber development is "regional development planning," and can't be left to market forces, because RDP is not what markets do.

    Shouldn't it be clear to all of us by now that private forces left to themselves will sometimes create serious trouble?

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