The town of Monticello, Minn., won a key legal victory supporting its right to use municipal government funds to build a muni-broadband network, a ruling could further cloud the municipal broadband issue, and possibly by extension some aspects of the broadband stimulus process. Revisiting a controversy from last summer, local telco Bridgewater Telephone, a TDS Telecom affiliate, had sued Monticello over its plan to fund the network with city revenue bonds because the Internet network would not be considered a public utility service covered by such bonds.
This week, a Minnesota Court of Appeals ruled, however, that Internet service provided by the city is a public utility, and turned back the Bridgewater lawsuit (Bridgewater had appealed after an earlier district court dismissal). It's not clear yet if Bridgewater may appeal to the Supreme Court. What's also not clear is how this ruling might affect a nation full of potential small town municipal broadband projects at a time when some of those projects could become eligible for federal broadband stimulus funds.
Tell me if I'm using faulty logic here: Could towns elsewhere in the U.S. gain confidence from the ruling, and decide to build their own networks. Could they add a pile of new requests to the broadband stimulus program? Instead of using their own bonds--or in addition to them--perhaps they could pitch the federal government the "woe-is-me" argument that they don't have the money to support one of their public utility services. How might that in turn affect the potential for nearby rural telcos to gain their own chunk of the stimulus package?
Ars Technica has this post
Bridgewater and Monticello tangled in court last summer
A district court judge dismissed the lawsuit last October