Telcos go to court over municipal fiber.

 The city of Monticello, Minn., wants an FTTH network to help attract new residents and businesses. So it went to its local telco, Bridgewater Telephone, and asked them to build one. The answer? No.

So, the city decided to go it alone. It held a referendum on the issue, got the support of 74 percent of the townsfolk for the $25 million project, and lined up the municipal bonds it needed to move the plan forward.

Then, it ran into a roadblock: Bridgewater sued to keep Monticello from building its FTTH network, saying issuing bonds for the proposal would be illegal. It’s an argument other telcos are trying to use to block muni-FTTH, so far with little success, which bodes well for Monticello.

Telecom service providers have gone on the offensive in a broad effort to stop–or at least delay–municipalities planning to build public fiber optic networks to compete for Internet, telephone and cable dollars.

“It’s a national playbook,” says Patrick Ottinger, general counsel for Lafayette, La., where the city has had to buck two lawsuit filed by BellSouth and Cox Communications in its effort to build a $125 million broadband system. “The longer they delay things, the better for them.”

Telecoms, meanwhile, say municipalities have an unfair advantage with access to public monies and no need to return a profit.

“You can’t use your powers as a city to create an uneven playing field,” said David Goodnight, who’s represented Qwest in fights with numerous cities.

Legal Technology: Telecoms Sue Over High-Speed Links.

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