Round 1 to the little guys. A Minnesota court of appeals has ruled the internet is a public utility, so communities can indeed float bonds to finance a municipal service.
However, the local phone company has used the interlude provided by the lawsuit to roll out optical fiber, the lack of which got it into the pickle in the first place, the cagey bastids.
Now it's off to the Supremes, I suppose. Whichever way it rules, the situation will probably be moot for Monticello. It'll be hard to justify gov't expense if a commercial structure already exists... unless maybe the MN courts can process this case faster than they can seat a senator.
http://arstechnica.com/tech-policy/news/2009/06/monticello-appeals-court-win.ars