• by Wendy Davis  @wendyndavis, June 23, 2009

The state's highest court declined to review an appellate ruling, issued earlier this month, saying that broadband service is the type of utility that can be financed with bond revenue. Monticello administrator Jeff O'Neill said he expects the city will begin construction on a new fiber network within two weeks.

The ruling is a blow to local telecom, TDS's Bridgewater, which had sued to stop the town from moving forward with its planned fiber network. Drew Petersen, TDS director of legislative affairs and corporate communications, said in a statement that the court's refusal to allow an appeal "will likely discourage other private enterprises from doing or expanding their business in Minnesota."

Two years ago, residents of the small town of Monticello, population 11,000, voted to build a fiber network that would provide TV, telephone and high-speed broadband access. The city sold $26 million in revenue bonds to finance the project, but had to put the initiative on hold last May, when Bridgewater filed suit. Bridgewater unsuccessfully argued that the city could not finance the project with revenue bonds because broadband service isn't a utility.

While the case was pending, Bridgewater upgraded its system in Monticello. The telecom now says that every resident of the city can access the Bridgewater fiber network, which offers speeds of 25 Mbps.

But despite Bridgewater's upgrade, Monticello's O'Neill says the city believes the initiative remains feasible. "We think there's sufficient market out there to keep our system healthy," he said. "Our mission is not to make a big profit."