Article also mentions Wilson, NC Greenlight system

          Want 50Mbps Internet in your town? Threaten to roll out your own
          ISPs
may not act for years on local complaints about slow Internet—but when
a town rolls out its own solution, it's amazing how fast the incumbents
can deploy fiber, cut prices, and run to the legislature.
          By
          Nate Anderson
          | Last updated October 27, 2009  9:40 PM CT

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Regional telco TDS Telecommunications last week issued a press
release announcing a major milestone for the company: 50Mbps service
over fiber optic cable to residents of Monticello, Minnesota. The
Minneapolis suburb became one of the few non-FiOS communities in the
country to experience full fiber-to-the-home deployment, and
subscribers will all receive a free upgrade from 25Mbps service to the
new 50Mbps tier.

Even better is the price, which starts at $49.95 a month for 50Mbps fiber service without the need to buy other services.

TDS is thrilled. "This is a huge first for TDS," said market manager
Tom Ollig. "TDS is working incredibly hard to deliver the faster speeds
customers want."

But the entire congratulatory press release glosses over a key fact:
the reason that Monticello received a fiber network was the town's
decision to install a municipal-owned fiber network to every home in
town… spawning a set of TDS lawsuits that went all the way to the Minnesota Supreme Court, which ruled in favor of the town.

Screaming to be heard

The saga began in 2007, when the town passed a referendum approving
the city-owned fiber network. The city says that it had approached TDS
and was told that no such system would be installed in town in the near
future, so it went ahead with its own plans.

After the referendum, the city was sued by the telco just before
groundbreaking began. The suit didn't seem to have much of a chance
under Minnesota law, and indeed judges at multiple levels ruled for Monticello. But in the meantime, TDS rolled into town with nine crews of its own and began installing—you guessed it—fiber to the home.

Monticello had just become one of the only US cities in which twin,
parallel fiber networks were being built at the same time. Backers of
the muni fiber plan were outraged; not only could TDS build a modern
fiber network on a moment's notice when it wanted to do so, but the
lawsuits prevented the city from doing much of its installation even as
TDS moved ahead.

We spoke to TDS about the situation
last year, and its director of legislative and public relations told us
that TDS didn't act earlier because it didn't actually know that people
really, really wanted fiber; once the referendum was a success, the
company moved quickly to give people what it now knew they wanted.

After delaying the town's deployment through lawsuits and rolling
out fiber service of its own, TDS issued a statement in June 2009 in
which it then called the whole rationale for the government project
into question.
"In view of TDS' development of a robust broadband platform in
Monticello during the past year, it is questionable whether or not the
City's feasibility study supporting its own fiber project, which was
premised on no broadband competitors and on which the revenue bond
purchasers relied when they secured the bonds more than a year ago, is
still accurate, and whether the city fiber project is feasible today."
Now, it has upped the ante by doubling everyone's speeds. The moves
all seemed designed to keep the idea of a muni-owned fiber network from
spreading, but they might well have the opposite effect; one takeaway
from the entire saga is that trying to build a muni fiber network is an
excellent way to "encourage" investment and innovation from regional or
national companies that might not otherwise have your town's own best
interests at heart.

Such stories aren't limited to Minnesota suburbs, either. Just last month Telephony Online ran a piece on how Cox cable prices had "dropped considerably" since Lafeyette, Louisiana lit up a fiber system of its own.

"Cox froze the cable rates in Lafayette, and they didn’t freeze the
rates in other areas," said Terry Huval, director of the muni project.
"We figured our citizens saved over $3 million in cable rates even
before we could offer them service."

Competition

This shouldn't be a surprise, as it's really just a classic case of
direct competition—something not seen often enough in the wired
broadband market. Unfortunately, getting high-speed Internet to your
town isn't always as simple as threatening to start a municipal
network. Many times, incumbent providers simply file lawsuits while
keeping speeds the same.

If your town is really unlucky, the incumbent will just head right
to the state legislature, seeking to pass laws constraining the
practice. That's what happened to Wilson, North Carolina, which runs a
moderately famous 100Mbps system known as Greenlight (which just happens to be the fastest ISP in the entire state).

When Time Warner Cable (which still tops out at 10Mbps and no DOCSIS
3.0) was asked why it had not stepped up to meet the city's demand for
faster access, a company rep told TechJournal South that it hadn't actually heard a citizen outcry over the issue—or it would have acted.

Wilson's Internet manager is having none of it. "We don’t want to
run anyone out of business," he said, "but we also don’t want to take
the leftover table scraps. If they had offered us what we were asking
for, next generation good service, we would have happily stepped aside."Source:

          http://arstechnica.com/tech-policy/news/2009/10/want-50mbps-internet-...