01-13-26 City Council Workshop Packet

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6 / Municipal Lawyer This is the Way: Equal Access to Broadband Through Municipal Franchising T he goal of equal access to broadband is not controversial or partisan. Most agree that citizens should have equal access to the same quality of service to broadband; that broadband net- works should be built out to serve all citizens over a reasonable time; that there should be reasonable customer service and consumer privacy protections; and price protections.1 The importance of ensuring equal access to broadband is particularly relevant today as federal and state governments are making historic public grants to improve broadband networks throughout the country.2 Surprisingly, despite historically high public investments, there remain no long-term guardrails to ensure resi- dents receive equal access to the same quality of service, pricing, and consum- er protections. While the FCC enacted digital discrimination regulations,3 the FCC likely lacks express authority to implement additional broadband rules.4 In an effort to presumptively assert additional regulatory authority over broadband, the FCC reclassified broadband earlier this year.5 While this reclassification would have arguably allowed the FCC to develop addition- al broadband rules, the Sixth Circuit stayed the reclassification, which fore- casts the reclassification will likely fail. Regardless of the outcome of the appeal, local governments are in the best position to ensure equal access to broadband through franchising. If available, local governments must use their existing home rule or statutory authority to franchise broadband.6 If necessary, state laws must be amend- ed to clarify municipal authority to franchise. Broadband is the future of municipal franchising. Local franchis- ing is the way to ensure equal access to broadband. A Valuable Special Privilege Generally, a city has the sovereign pow- er delegated by state law to grant a fran- chise to convey a highly valuable special privilege to corporations to use the scarce public right-of-way to deliver ser- vices to a city’s residents.7 A franchise is a special privilege that allows a franchi- see to profit from the use of the public right-of-way in a manner not generally available to the public as a common right.8 Without question, broadband providers must have this privilege in or- der to access the public right-of-way to cost effectively (and profitably) deliver services. Franchisees, in return for this valuable special privilege, pay franchise fees, which is essentially the rent for the use and occupation of the public prop- erty.9 While organizations like the Free State Foundation suggest that fees are the only policy benefit of franchising,10 they ignore the value of the privilege to use public rights-of-way11 or how local governments require franchisees to comply with requirements benefiting citizens, as discussed in detail below. Source of Municipal Franchise Authority The source of local franchising author- ity arises from a number of sources including, but not limited to, state law,12 state constitutions,13 municipal charters,14 and state common law, including state statutory and common law recognition of local authority to manage the public rights-of-way. Local franchising is a sovereign power that resides in the states and is not derived from federal law, including the Com- munications Act.15 To the extent the Communications Act does not lawfully restrict or address a particular service, a local government may regulate the service as state law provides.16 To that end, courts recognize that the Communications Act creates a dual federal-state regulatory structure.17 Today, broadband is classified under federal law as a Title I information service.18 Title I does not preempt local franchising of broadband,19 just as it did not preempt local franchising of cable service when cable service was an information service prior to the passage of the federal Cable Act.20 Earlier in the year, when attempting to reclassify broadband, the FCC once again recognized the dual federal-state regulatory system over communica- tions networks and made it clear that MICHAEL R. BRADLEY, Partner, Bradley Werner, LLC, Minneapolis, Minnesota