Lessons from Sun Prairie Utilities: Balancing Public Vision with Private Capacity

Sun Prairie, Wisconsin, with a population of approximately 33,000 at the time, launched a municipal fiber network in 1999 through Sun Prairie Utilities (SPU). By 2016, the system had reached only 513 residential customers and 47 businesses, leaving the utility with limited revenues and about $2.7 million in debt. City officials concluded that expanding the network citywide would cost an estimated $25–30 million, a burden they argued would pose unacceptable risk to taxpayers.

Sun Prairie Utilities

Launched in 1999, the Sun Prairie Utilities project was one of Wisconsin’s first municipal broadband systems. By 2016, however, it had signed up just over 500 residential customers and fewer than 50 businesses. Facing unsustainable debt and limited adoption, the City Council approved the sale of the network to TDS Telecom in April 2016 for $2.88 million. The transaction paid off SPU’s remaining $2.7 million debt and shifted expansion responsibility to a private provider.

The sale was finalized in 2017, and TDS reports it has since invested more than $15 million to expand its Sun Prairie fiber network, completing citywide coverage and offering multi-gigabit service.

Failure and Transfer to Private Sector

Sun Prairie’s municipal network ultimately failed because the city could not achieve the scale or financial stability required for long-term success. Officials acknowledged that a citywide buildout under public ownership would have required tens of millions in new debt and exposed taxpayers to unacceptable risk. The sale to TDS provided a way out. It eliminated SPU’s debt, avoided new borrowing, and ensured residents would still gain access to fiber. The sale was finalized in 2017, and within a year TDS invested more than $15 million to complete citywide fiber expansion, later announcing multi-gigabit upgrades for the community.

Impact Areas

The Sun Prairie’s municipal network case illustrates several key challenges for municipal broadband:

1. Structural Scale Limits – SPU’s network never reached enough households or businesses to support itself financially, demonstrating the challenges of scaling municipal broadband. This limited adoption meant the utility could not generate sufficient recurring revenue to cover operating costs or finance needed upgrades. Without scale, the system struggled to compete with private ISPs, which spread costs across larger customer bases and invest in marketing and new technology. The Sun Prairie case illustrates how small subscriber numbers can create a structural ceiling on municipal broadband sustainability, regardless of initial vision or infrastructure investment.
2. Private Sector Advantage – With greater resources, TDS expanded the network far faster than SPU could have, bringing citywide fiber and multi-gigabit service to Sun Prairie within a year of the sale. This contrast underscores how private ISPs are often better positioned to more rapidly deploy scalable, consumer-facing broadband networks.
3. Fiscal Risk Management – By approving the sale, city officials avoided taking on an additional $25–30 million in debt, which they had estimated would be necessary to finance a full citywide buildout under public ownership. This outcome illustrates how municipalities can mitigate fiscal exposure by transferring operational responsibility to private ISPs while ensuring community benefits are preserved.

Takeaways

The Sun Prairie case illustrates the difficulty of sustaining a municipal broadband system. By transferring ownership to TDS, the city ensured that residents received the advantages of a modern, citywide fiber network while shielding taxpayers from escalating costs.

Arianna Roberts is a 3L at New York Law School.