City-owned fibre: new revenue stream?

I was reading this article on Ars Technica about the town of Monticello, MN, who had tried to build its own 50Mbs fibre network after TDS (the local cable monopoly I assume?) had done nothing. This story ends with (of course) TDS taking the city to court (incidentally, the city won at every level, all the way to the supreme court), and using that delay to place fibre itself. The citizens still won, however, as it was a free upgrade in speed for them.

Cities all over North America are struggling for new revenue streams. Vancouver itself has a huge shortfall, and is looking for new revenue sources. Additionally, Vancouver wants to be the “Green Capital” of the world. So why not run city-owned fibre throughout the city? Currently, people have a choice of Telus ADSL, or Shaw cable, and if you’re downtown, Novus. But the service is slow, it costs a fortune – and there’s no real incentive for either  Telus or Shaw to either lower prices or raise speeds, or generally, innovate – because they don’t really have any fear of competition (aside: Where Shaw does have competition from Novus, their price & service is great). So why doesn’t Vancouver roll out a super-high-speed fibre network itself across Vancouver? Revenue could then be handled one of 2 ways (there’s likely other models too – these are just the 2 that immediately come to mind): either lease the lines to private companies to resell (probably far easier to manage logistically), or sell directly to residents (or simply have residents pay a new annual levy on their taxes). Not only would this definitely make Vancouver an attractive city for business to come to (cheap high-speed internet, yes please!), it would also promote telecommuting, remote work, etc. I would argue this falls in line with the goal of being an “Open City” too – broadband for all makes information more easily accessible to end-users.

Would the initial investment be large? Yes. But I suspect it would pay for itself quite quickly – I certainly don’t, and I suspect that most of my fellow Vancouverites have zero loyalty to their internet-access provider (aside: everyone I know who uses Novus loves it – those who use either Shaw or Telus seem to tolerate it, viewing it as the least-bad option between the two). I also think that this sort of urban infrastructure development is exactly what federal stimulus money is good for (although clearly, this does not count as “shovel ready”).