Interesting story reported by Arstechnica concerning the town of Monticello, Minnesota’s attempts to lay fiber optic cable. The town asked Bridgewater Telephone to lay a fiber optic network to homes and businesses in the municipality. The telecommunications company declined. So, the town proceeded to pursue a plan to lay its own network; issuing bonds for the project. The day before they were to close on the bonds, Bridgewater filed suit to stop the project.
Bridgewater argues that the project impermissibly allows the town to use tax exempt bonds to compete with Bridgewater and that the bonds will be used for “current expenses.” I don’t know Minnesota law, but it’s not unusual for bonds to be prohibited as a source of money for current operating expenses as opposed to capital expenditures. From the article, it sounds like Bridgewater is stretching on its “current expenses” argument and is characterizing what are really capital expenditures as current expenses.
On the unfair competition angle, it does not sound like Minnesota law actually prohibits this, and the argument becomes even less tenable when you consider that Bridgewater declined the town’s request to provide the service.
In any case, I think it’s forward thinking of the municipality to recognize high speed connectivity as necessary infrastructure. Whether they’re implementing their vision in the best way, I couldn’t say; but I think they are correct that the Internet connectivity is going to be akin to roads, water, and electricity in terms of necessary infrastructure for municipalities in the future.
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