Minnesota court: Internet a utility - FierceTelecom

June 5, 2009

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.