Internet as a Utility
Score one for the consumer! There have been a couple cases in the last year where a telephone company has taken on a local community over the privilege to provide Internet access to their residents. Time Warner Cable and Embarq (formerly Sprint High Speed) sued the city of Wilson, NC because the town started their own ISP. Why were TWC and Embarq upset over this? Because they can’t compete on price with a utility company that isn’t interested in making profit, only in providing good service.
The latest case comes from Minnesota, where TDS Telecom sued Monticello, MN over installation of their own fiber network. TDS used a different tactic, stating that it was illegal for Monticello to use city bonds to provide Internet service because Internet service is not a utility. TDS claimed that Internet service cannot be a utility because it does not have “near universal usage”. Fortunately the court of appeals does not agree with TDS, and stated it was illogical to determine utility status simply based on how many people use it. Monticello also went ahead with the fiber installation anyway, without using bonds, since the lawsuit was just over whether or not bonds could be used to pay for it. I think it is also important to note that Monticello setup an interconnect station so that other ISPs can use their fiber, so it’s not like they are completely locking everyone else out of the Internet business in the area.
TDS can still appeal to the state Supreme Court, which would be very inconvenient for Monticello but could turn out better for everyone in the long run. If the Supreme Court rules against TDS, it sets an important precedent that other towns can use to start rolling out their own fiber networks for their residents. This also changes the network neutrality game, where common carrier status assigned to utilities could completely negate the “tiered Internet” approach that large ISPs are pushing.
