Small Minn. Community Rejects Overbuild

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Tele-Communications Inc. scored a big victory earlier this
month, when voters in a northern Minnesota community on the North Dakota border
overwhelmingly rejected a proposed municipal telecommunications network.

On April 7, voters in Breckenridge, Minn., voted 659-126,
or by an 84 percent margin, against building a city-owned network capable of competing for
a share of TCI's 1,200 local cable subscribers.

"That's a big win," said Mike Martin,
director of the Minnesota Cable Telecommunications Association.

The vote was also a victory for U S West Communications,
the state's dominant local-exchange carrier, which would have faced competition from
the network for local telephone customers.

Had the project been approved, Breckenridge would have
become the first Minnesota city to build a municipally owned telecommunications network.

However, the vote fell well short of the 65 percent
supermajority required under Minnesota law before a municipal government can get into the
local telephone business.

Breckenridge is the second Minnesota community that has
failed to get such a project off the ground. Moorhead, Minn., put a similar project before
its citizens in 1996, but it only managed 52 percent of the vote.

"Nobody has made that 65 percent hurdle, so far,"
Martin said of the voting requirement, which operators fought tooth-and-nail to preserve
during the recent legislative session.

Martin said Breckenridge city officials undermined the
project by refusing to conduct a feasibility study before asking for authorization to
build the network.

"That made voters uneasy," Martin said.
"They became skeptical and wanted to send a message."

Breckenridge Mayor Cliff Borth, who had indicated that he
was willing to consider a possible partnership with TCI, said municipal officials were
unable to convey the benefits of a high-speed fiber optic network to local residents.

"It's hard to educate people to make a proper
vote on something," Borth said.

Moreover, Borth said, the city was overwhelmed by a TCI
newspaper- and radio-advertising blitz designed to scuttle the project.

"A lot of cities are looking at getting into this sort
of thing, so they [TCI] were protecting their pocketbooks, which, I guess, is their
job," he said.

Nevertheless, Borth, who worried that local
telecommunications providers might not have had Breckenridge very high on their radar
screens, said the vote should be a "wake-up call to TCI and U S West to be more
responsive to our citizens."

"It's certainly not a dead issue," he said.
"We're going to look at other cities that have done this. And over the next two
years, we should get a pretty good read on whether to try it again."

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