Thanks to Lynne Dahl-Fleming for sending me the following update on the Get Broadband project in Monticello. It will be interesting to see what happens with the lawsuit. Things have gone so well in Monticello that I’m sure this will be just a pebble on the path to broadband – and hopefully an opportunity for other communities to learn how to handle the situation as lawsuits from incumbents seem to be on the rise.

(There have been some nice articles in the Monticello Times on this story – but unfortunately they’re not online yet. Update: thanks to Lynne for the link to the stories, which are now online! I really enjoyed the editorial (I’d include the link when/if I can – again thanks to Lynne for the udpate link!) from Mike Shoemer who while clearly a fan of TDS calls their lawsuit and accelerated plan for FTTH “shady”. Like many incumbents in other areas, TDS has taken a “wait and see” approach to network upgrades, letting the municipality do a lot of their business and market development and trying to take the lead once the municipality has already invested time and money into a public network.)

On May 21st the City of Monticello obtained commitments from private investors to purchase revenue bonds sufficient to finance the establishment of a city owned and operated telecommunications utility called “FiberNet Monticello”. Obtaining investor support for the FiberNet Monticello business plan is a true demonstration of the financial viability of the project and a key milestone in development of the system. An important factor in the success to date is the overwhelming support of the citizens as reflected in the 74% favorable vote In the September 2007 referendum.

On May 22nd the City Council was prepared to meet to vote on authorizing sale of the bonds. Less than 48 hours prior to that intended vote TDS Telecom through its subsidiary Bridgewater Telephone served a lawsuit against the City claiming that state laws do not grant the right to use revenue bonds for establishment of a telecommunications system, despite express language in the statute allowing revenue bonds to be issued for revenue based “utilities and public conveniences”.

The City is confident that it is well within its legal rights to use revenue bonds to build a municipal network and that it will prevail against the suit. The City will vigorously oppose the law suit. Defense of the lawsuit is partially afforded through the City’s membership in the League of Minnesota Cities Insurance Trust.

Both the timing and the grounds alleged in the suit lead to the impression that the suit was intended to interfere with the award of the bonds and create additional costs for the City project.

The City plans to move forward with the project and its bond managers will continue to prepare for the bond sale which will include a disclosure to investors of the existence of the lawsuit.

All other aspects of the FiberNet Monticello project have gone forward successfully on schedule including network engineering, construction planning and negotiating a management contract.

The goals of the FiberNet project remain the same: choice of service provider; competitive rates; local service; local ownership; economic development and economic returns to the community. We will need the continued support of the citizens of Monticello to overcome the legal obstacles TDS/Bridgewater Telephone is placing in the path of FiberNet Monticello.