01-13-26 City Council Workshop Packet

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10/ Municipal Lawyer Broadband cont’d from page 9 would be receiving $750 million in feder- al and state broadband grant funding and was requesting additional public benefits for the industry. Instead, the industry claimed that franchise fees will impact low-income residents with higher broad- band costs. No credible information was submitted in support of this claim. On the other hand, local governments testified in support of the Equal Access to Broadband Act that local franchising au- thorities stood up for subscribers in terms of digital discrimination and fair pricing. Impact on Buildout. The broadband industry testified that allowing franchising will slow down the build out of broadband and that they would not build to cities that chose to require a franchise. Given the pending billions of dollars of state and federal funding at stake, the argument lacked veracity. The expenditure of $42 billion of taxpayer dollars would be irrespon- sible without protecting the long-term interests of residents. Local franchising will encourage and promote more equi- table broadband deployment - not less. Only local governments through cable franchising have been able to demand buildout maps and ensure full build out to every neighborhood, home and apartment. In other words, franchising promotes equal access to broadband. Preemption. Industry opponents claimed that fed- eral law would preempt the proposed Minnesota Equal Access to Broadband Act. First, the industry claimed the bill would be preempted by the Internet Tax Freedom Act (“ITFA).62 The ITFA allows fees for the conveyance of privi- leges. A franchise grants the privilege of use of the public right-of-way. There is no preemption. Next, industry claimed the bill would be preempted by the FCC’s Small Cell Order.63 Since the bill excluded small cell wireless facilities, the Small Cell Order would have no preemptive effect on the bill. Finally, industry opponents claimed preemp- tion by the FCC’s Mixed-Use Rule.64 The Mixed-Use Rule has a somewhat tortured history. The original order preempted local governments from reg- ulating noncable services over a cable system.65 The legal reasoning behind the Mixed-Use Rule was largely rejected on appeal and the court ruled that regu- lation of non-cable services of a cable operator is allowed if it is consistent with the federal cable act.66 This was also addressed in the bill amendments. Conclusion The goal of equal access to broadband is not controversial. The way to obtain the goal is through franchising broadband service providers. Municipal franchis- ing is the best path forward to ensure buildout, quality of service, customer service, privacy protections, fair pricing, and public benefits to address digital adoption and education, all of which residents want and expect. Municipalities have a successful franchising history. Local governments without current statutory or home rule authority should seek legislative change to allow municipal broadband franchising or risk their com- munities being less competitive and un- derserved. Franchising is the future and the way to equal access to broadband. Notes 1. See, e.g., City of Minneapolis Dig- ital Opportunity Plan Comments and Qualitative Data to the Minnesota Office of Broadband Development (June 30, 2023). 2. See Broadband Equity Access and Deployment Program – Overview, https://broadbandusa.ntia.gov/fund- ing-programs/broadband-equity-ac- cess-and-deployment-bead-program (last visited Oct. 30, 2024) (“The Broadband Equity, Access, and De- ployment (BEAD) Program, provides $42.45 billion to expand high-speed internet access by funding plan- ning, infrastructure deployment and adoption programs in all 50 states, Washington D.C., Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands”). 3. See In re Implementing the Infra- structure Investment and Jobs Act: Prevention and Elimination of Digital Discrimination, Report and Order, 89 Fed. Reg. 4128, GN Docket No. 22-69, 2023 WL 8614401 (rel. Nov. 20, 2023), appeal docketed, Minn. Telecom. Alliance v. FCC, No. 24- 1179 (8th Cir. 2024) (the “Digital Discrimination Order”). 4. See Mozilla Corp. v. FCC, 940 F.3d 1, 80-81 (D.C. Cir. 2019) (per curiam) (“Not only is the Commis- sion lacking in its own statutory authority to preempt, but its effort to kick the States out of intrastate broadband regulation also overlooks the Communications Act’s vision of dual federal-state authority and cooperation in this area specifical- ly;" Ohio Telecom Ass’n v. FCC, Case No. 247000, Document: 51-2 (6th Cir. 2024) (FCC’s 2024 Title II broadband reclassification order Editor’s Note: On January 2, 2025, the Sixth Circuit released Ohio Telecom Ass'n v. FCC, 2025 WL 16388, ___ F.4th ___ (6th Cir. 2025), setting aside the FCC's 2024 Safeguarding and Securing the Open Internet Order that reclassi- fied broadband internet access service as a Title II telecommunications service subject to FCC common carrier regu- lations and net-neutrality restrictions. Citing Loper-Bright and the demise of agency deference, the court held that the FCC's reclassification order exceeded its statutory authority and that based on a plain reading of the statute broadband internet access service is a Title I informa- tion service. The Court similarly rejected the FCC's reclassification of mobile broadband. This development makes state initiatives regarding equal access and broadband franchising, neither of which are preempted by the Act or by the Sixth Circuit decision, even more significant.