PUC Gives Lake Communications Authority to Offer Broadband on Minnesota North Shore

When last we looked in on the Lake County FTTH project connecting rural areas north of Lake Superior, the County had just ditched its original management team and Mediacom started trying to derail the project.

The County went on to hire "Lake Communications," a two man firm created for this project, while Mediacom presumably returned to quietly scheming against the introduction of any competition on their turf. Lake Communications has received authority by the Minnesota Public Utilities Commission to provide broadband in their target territory.

Kevin O’Grady, a staffer for the Public Utilities Commission, called Thursday’s 5-0 vote “uneventful.” He said that aside from a protest from the Minnesota Cable Communications Association that was withdrawn just before the vote, the application was “nothing out of the ordinary.”

The cable association, which faces competition from the fiber project, had complained that the county, without a public vote, couldn’t be the legal authority to provide telecommunications services under Minnesota law. The commission, responding to the complaint, said the authority would be granted to Lake Communications, which it deemed had a proper relationship with the county in providing the service.

The county plans to build the network and lease the lines to Lake Communications for revenue. In its original response to the cable association’s complaint, the state commission said Lake Communications’ application “complies with the requirements typically applied by the commission to applications” across the state. It also stated that Lake Communications’ financial statements were “sufficient and consistent with the financial information filed by other applicants for authority.”

Remember that Minnesota law requires a supermajority vote of 65% before cities and counties provide telephone service. In this case, Lake Communications will be offering the services on infrastructure owned by the County. If there is any sliver of a doubt about the legality of this arrangement, we can expect Mediacom or the Minnesota Cable Communications Association to file suit.

But now is probably not a good time for them to sue. Most of the time, the point of lawsuits against community networks is not about winning the suit, but rather delaying and disrupting the project. So one would expect a lawsuit to occur much closer to the ground-breaking. Why risk suing now, when the lawsuit could be resolved over the winter, when little work is being done? Better to wait and hope the suit takes much of the construction season away from the potential competitors.

We hope this is too cynical a reaction, but watching some of these lawsuits play out leads one to such suspicions.

This is yet another reason the Minnesota Legislature should make it very clear that local governments have full authority to bond for, finance, build, operate, and own these networks -- preferably with no more barriers than are common for other significant public expenditures.

Without this project, much of Lake County and the nearby areas also served by this project will simply not have fast, affordable, or reliable access to the Internet. Let's hope the anti-competitive desires of a few companies in portions of the county do not derail it for everyone.