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Fiber-optic network vote fails in North St. Paul

A proposal to make North St. Paul the owner of its own fiber optic network was nixed by voters.

By JEAN HOPFENSPERGER, Star Tribune

Last update: February 24, 2009 - 10:20 PM

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North St. Paul's attempt to become the second Minnesota city with its own fiber-optic network was overwhelmingly defeated by voters in a referendum Tuesday.

The proposal was rejected 67 percent to 33 percent, with 2,047 no votes and 1,009 votes in favor of the measure.

City officials had argued that bringing state-of-the-art technology to all homes and businesses there would give the city a competitive edge in attracting economic development. The referendum asked voters to approve a plan that would have made North St. Paul the owner of the network, thereby receiving financial benefits from the network.

However, opponents, led by local telecommunications providers, charged that a $18 million city-owned utility was risky business and that property taxes would be raised if the city couldn't meet its needed customer base. They launched an aggressive campaign to halt government control over the information superhighway.

On Tuesday night, they said the opponents said they were pleasantly surprised by the margin of victory.

"We think this shows that voters don't want to risk higher taxes to get services from the government that are already being provided,'' said Mike Martin, executive director of the Minnesota Cable Communications Association, active in opposing the measure.

But Connie Hoye, a North St. Paul resident who oversaw the Vote Yes campaign, attributed the defeat to "corporate businesses with lots of money and their scare tactics.'' She said much misinformation had circulated in recent weeks.

"We hope this was a vote on how the project was funded, not that the project wasn't a good idea,'' she said. "We know this is a great opportunity for the city. We're very disappointed.''

Hoye said the city will continue to pursue the project, perhaps using a different financing model.

Only one other Minnesota city -- Windom -- has a city-owned fiber-optic network The city of Monticello passed a referendum similar to North St. Paul's in 2004. However, it was sued by a local telecommunications provider, which charged the city couldn't use bonds to finance the project. A lower court ruled in favor of the city. That decision has been appealed.

Jean Hopfensperger • 651-298-1553

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