A lawsuit against the city of Monticello contesting its plans to create a high-speed fiber-optic network has been dismissed.

The suit had been filed by Bridgewater Telephone Co., also known as TDS Telecom, one of the leading telecommunications companies in the country.

The company and the city have been arguing for more than a year over TDS building a fiber-optic ring or upgrading its existing system to provide high-speed access to residents, businesses and city offices and agencies.

When the company hesitated, the city moved to create its own system, which should be completed next year and would compete with the company.

The city conducted a referendum in which about 75 percent of those voting approved spending $25 million in revenue bonds to create the city-owned system.

The company now is upgrading its system, but also filed suit contending that Monticello was illegally using the revenue bonds to finance its project.

Revenue bonds are traditionally used by communities to pay for public infrastructure or community improvements, such as a new swimming pool, if the projects are considered a convenience for the public. They are sold to investors after being approved by voters in a referendum.

The company's argument was dismissed this week by Wright County District Judge Jonathan Jasper, who ruled that the city has the authority to use the money for public services such as a high-speed network.