Posted by: Costas Troulos | July 30, 2008

Municipal Networks sued over funding rules

I was browsing my (annoyingly huge) pile of Google alerts on fiber* issues when I spotted this article: Telecom sues Monticello over city’s plan to build its own high-speed network.


In summary, TDS Telecom, the chief phone and cable provider of Monticello sued the city over its planned fiber access network. For almost a year, both parties have been fiercely deploying FTTH and the city, of roughly 11,000 inhabitants, is about to become one of a few, if not a unique locale (at least as of present day), where public and private sector are competing so directly over paying subscribers.

In the law sue, TDS questions whether Monticello can use revenue bonds to create fiber-optic networks, something that the city did to finance network deployment. Essentially, TDS questions the compliance of a public project’s financing rules with the project’s objectives and social necessity.

What’s important in the story is that publicly funded fiber projects are very susceptible to interpretations of their funding mandates. In Europe (i.e. Greece, Ireland, Spain) many municipal broadband networks are financed by EU Structural Funds under rules for fairness, openness and other principles. Cities might want to be cautious when crafting business models and strategy since failure to comply with these rules may result in unpleasant arrangements especially if competing interests emerge in their locale.


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