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
    fishbane, 3 Nov 2009 @ 7:38am

    Re: Re: It's perfectly fair, they just don't want to

    We actually have an empiric test of the theory here. If this were so completely unfair, then one would expect TDS to make an economically correct assessment and choose not to compete in that market. (Isn't that what we usually hear - that government will crowd out private investment?)

    It turns out that this did not happen.

    I think it is useful to remember that, especially at a local level, "teh government" is made of people. Telcos, more so than many other industries, are rather good at recognizing that and creating rules under which they thrive. Bitching about it and then essentially shooting their own argument in the head is absolutely their right, but I can't summon up much sympathy.

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