Some Minnesota cities want to impose fees on internet providers; customers could pay the price

And city leaders don't hide that extra revenue is part of the equation, but many also maintain they are looking out for consumers and broadband equality.

Cities could negotiate to put regulations on broadband providers, ensuring more equal service across a city and other protections, said Mike Bradley, an attorney supporting the bill who works in telecom and cable cases. The fear is that providers now can cherry pick neighborhoods that could be more ripe with potential customers and therefore more likely to make the economics of expanding services feasible.

"Right now there's nothing protecting the residents," Bradley said.

The Federal Communications Commission adopted a rule last year meant to prevent discrimination of broadband access based on income, race, ethnicity and more, which has drawn lawsuits from the U.S. Chamber of Commerce and others.

Roseville Mayor Dan Roe has watched city fees on cable companies drop through the past half-decade as people switched to streaming services, slicing into PEG funding. He estimated franchise fee and PEG income has dropped 20% in the past five or six years.

Roseville is part of a nine-city consortium known as the North Suburban Communications Commission that uses PEG fees to fund the media group NineNorth. The nine cities in 2023 took in roughly $1.7 million from cable companies between the two fees, Roe said.

Concern for PEG fees isn't only in the metro. Itasca Community Television in Grand Rapids backs the new franchise fees in a letter to lawmakers, writing it had lost money in recent quarters, a problem for a public service that offers coverage of city, township, school district and county meetings.

And with community newspapers dwindling like the Lillie Suburban Newspapers chain, which closed in 2019, local residents have fewer local sources to rely on for news.

"It's anything from high school sports, or performing arts performances, city festival parades in the summer," Roe said.