01-13-26 City Council Workshop Packet

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Continued on page 10 JANUARY/FEBRUARY 2025 / VOL. 66 NO. 1 / 9 ments and Reply Comments were cited throughout the FCC’s final Report and Order.50 Municipalities have also par- ticipated in the development of state Digital Equity Plans.51 These efforts show that municipalities will protect all residential consumers through broadband franchising. Municipalities have an undeniably successful record of using its franchising authority to protect consumers. Public benefits. Receipt of public benefits is anoth- er valuable function of franchising. Broadband franchising will allow cities to continue to fund access television and to address other digital adoption and equity programs.52 The CEDC rec- ognized this principle, finding that “the privilege of using public assets comes with an obligation to provide a benefit to the public, which includes ensuring that all members of the community have equal access to broadband… .”53 For cable franchises, important services, such as public, educational and government (PEG) access pro- gramming in local franchises to ensure access to local news, information, pub- lic meetings, high school sports and events, and more.54 Local broadband franchising will allow local govern- ments to negotiate public benefits to help promote equal access to broad- band and to eliminate digital dis- crimination. Some examples of these public benefits could include computer centers, training on the use of digital services, the next generation of access television, and consumer protections. The Minnesota Equal Access to Broadband Act In 2024, the state of Minnesota began exploring the role that franchising can play in ensuring equal access to broad- band for all Minnesotans. The Minne- sota Equal Access to Broadband Act, HF 418255/SF 4262,56 was introduced in the 2024 legislative session. The bill authorized cities to franchise broad- band providers, which would ensure that all their residents will receive the same broadband. It would also allow cities to receive other public benefits such as access TV and promote digital equity. Through an amendment during committee hearings, the bill capped fees to mirror cable fees. While the bill did not pass this year, it generated significant legislative support. The bill was heard multiple times in the House of Representatives and ultimately added to the House Commerce Policy Omnibus Bill,57 which passed out of committee to the House floor where it received its Sec- ond Reading on April 4, 2024. The bill was also heard by the State and Local Government Committee in the House and laid over for possible inclusion in the State and Local Government Omnibus Bill. The Equal Access to Broadband Act enjoyed widespread support from the League of Minnesota Cities, MACTA, NATOA, ACM, the League of Women’s Voters, and others, but was opposed by the cable and phone associations and the state Chamber of Commerce. While the Minnesota Equal Access to Broadband Act is fairly technical and Minnesota-centric, it could be a starting point for drafting model broadband franchising legisla- tion for use throughout the country. Challenges to Municipal Broadband Franchising The broadband industry raised several challenges to the Minnesota Equal Access to Broadband Act, most of which were self-serving with no factual or legal basis. Franchise Fees. Rather than recognizing the valu- able special privilege of enjoying access to the public rights-of-way to conduct their business, the broad- band industry opposed the Min- nesota Equal Access to Broadband Act claiming franchise fees were taxes amounting to a “slush fund” for cities. As shown above, fran- chise fees are the consideration for the special privilege to use the public right-of-way for private profit.58 It is a very valuable privilege that few companies enjoy. Without this privilege, communications companies could not operate their businesses in a cost-effective way. The fran- chise fees allowed by the Minnesota legislation mirrored the fees currently paid by cable operators. As the Texas Court of Appeals recently recognized, public property – the right-of-way – should not be given away below its fair market value.59 No government should give away public property for nominal or no consideration and it is fundamentally fair to require all users to pay franchise fees, not just some. Stacking. Opponents to the Equal Access to Broadband Act claimed fees on fran- chisees would be unfairly “stacked” on providers. One claim was that multiple governmental entities could require a broadband franchise, thus forcing a pro- vider to obtain multiple franchises for the same area. No reasonable reading of the Equal Access to Broadband Act could support that argument. Neverthe- less, the bill was amended to clarify that there is one local franchise authority in each city, so there would be no so-called stacking. Secondly, opponents claimed that fees would be stacked on multiple services provided by individual providers, such as cable and broadband. This stacking argument fails to recognize the valuable privilege of using the public right-of- way.60 In rejecting a similar stacking ar- gument, the Texas Court of Appeals held such an argument “would do violence to the concept of consideration, and we are directed to no authority that would compel such an anomalous result.”61 Impact on Low Income Residents. The broadband industry presented no solutions to lowering rates for low-in- come persons, even though the industry