When Competition Threatens, Try Throwing a Tantrum

Maximum PC Staff

There’s a definite object lesson here, but I’m not sure what it is. It could be that competition is a good thing. It also could be that monopolies don’t take kindly to threats to their turf. What is obvious, however, is if you need your local cable provider to do something you got to be prepared to poke them in the eye (preferably with a sharp stick).

The suburban hamlet of Monticello, Minnesota, just outside of Minneapolis, had a hankering for fiber optic cable for all its residents. The town approached it’s regional telco, TDS Telecommunications, with the request and was rebuffed. TDS didn’t see the need to make such an investment in Monticello now or any time in the foreseeable future. In response, the citizens of Monticello passed a referendum to build their own fiber optic system, which would compete with TDS’s cable service to the town.

That didn’t sit well with TDS, which promptly sued Monticello. Minnesota law sides with the city in this case, and as the lawsuit progressed through the courts the city kept winning. TDS’s intent wasn’t to block Monticello’s efforts, only to delay them. While the lawsuit was underway the city was prevented from starting construction. TDS, however, wasn’t, and began to install its own fiber optic system. When completed, TDS crowed about the technological improvements it rendered in Monticello, saying “TDS is working incredibly hard to deliver the faster speeds customers want.”

TDS wasn’t done there. It also openly questioned Monticello’s decision to build it’s own fiber optic system: “In view of TDS' development of a robust broadband platform in Monticello during the past year, it is questionable whether or not the City's feasibility study supporting its own fiber project, which was premised on no broadband competitors and on which the revenue bond purchasers relied when they secured the bonds more than a year ago, is still accurate, and whether the city fiber project is feasible today.” Way to stay classy TDS.

So why all the rigmarole, why didn’t TDS just build a fiber optic system when first asked by Monticello? Nate Anderson, of Ars Technica, reports TDS’s director of legislative and public relations said TDS wasn’t “really, really sure” the residents of Monticello wanted fiber optic. (TDS hasn’t heard of market research?) Passage of the referendum is what changed their minds. That, and the fact TDS would have a fiber optic competitor.

Anderson suggests the object lesson to be for municipalities to build their own cable networks. (Or, at the very least, inject competition into the system). Everyone in Monticello got their broadband speeds doubled: from 25Mbps to 50Mbps, without seeing a rise in rates. Similarly, the town of Lafeyette, Louisiana has managed to keep cable rates down because it offers competition to Cox Cable. And, if you are jonesing for real broadband, the city of Wilson, North Carolina has a municipal system that offers 100Mbps (while Time Warner Cable is still knuckle-dragging at 10Mbps).

Image Credit: Gen Pren/flickr

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